Sometimes you spend a few hours with people whose thoughts and ideas challenge you and open your mind to introspection and reflection. As in previous years, the 2023 SA wine industry’s Nedbank Vinpro Information Day, again left me with so much more to consider than grape farming, wine production and economic challenges. Three concepts seemed to be top of mind for the stellar line-up of presenters: Resilience. Responsibility. Revolution.
Almost all the speakers at the Vinpro Information Day referred to South Africans and / or the SA wine industry as resilient. I remember two posts I saw on social media at the beginning of the year.
“In 2023, I hope you find time to be happy, not just strong.” Louise Kaufmann
“I dream of never being called resilient again in my life. I’m exhausted by strength. I want support, I want softness, I want ease. I want to be amongst kin. Not patted on the back for how well I take a hit. Or how many.” Zandashe/Wordables.
Yes, it is a wonderful quality to be resilient, but I guess we do wish that we didn’t have to be so strong. How wonderful it would be to not always perform against the odds. To rather receive support and to blossom within a positive environment. To use your energy for more than survival.
Unfortunately, in the world we live in, to try and reach such a utopia (without any guarantees that you’ll get there), does require resilience. And for now, we need to be grateful that it is a quality we possess.
Vinpro Chairman Anton Smuts said that for us to connect and grow (the theme of the 2023 Vinpro Day), we need to be robust, agile, transformed and competitive. It is quite a tall order. This call for resilience was echoed by both Herman de Kock and Isaac Matshego from Nedbank.
Economic growth has been below 2% since 2013, recovery from Covid was slower than anticipated and not helped at all by the war in Europa, the resulting inflation and global economic downturn as well as of course, Eskom’s power supply crisis. “Ramaphoria made way for reality”, said Matshego. More than just our domestic challenges, we are also confronted with unfavourable global conditions. No two ways about it, we need to be resilient.
Are we resilient enough to win in wine? Vinpro CEO, Rico Basson thinks so. The SA Wine Industry performs very well internationally:
- The quality of our wines and our producers are acknowledged with numerous international awards.
- 11 local vineyards were listed among the World’s 100 Best Vineyards in 2022 (with 3 in the top 50!).
- Our technical expertise was acknowledged with Rosa Kruger being inducted into the Decanter Hall of Fame.
- Our Wine Tourism offering leads the way globally.
But, at the same time, he also lists our realities:
- Disruption to supply chain because of resources such as water and power as well as Transnet failures.
- Recession and the challenge to global trade.
- Anti-alcohol sentiments and health focus.
- Taxation and our struggle to move from regulations to enforcement.
- Sustainability in all aspects of the business.
- Transformation and moving the focus from farms to market.
- Research, innovation, business intelligence and people development.
- Sound business models.
- Focus with specialisation and less fragmentation.
- A strategy and clear message for the market.
Another concept, repeated throughout the various presentations, was responsibility / accountability. According to Basson, we are in a #Permacrisis and he lists the reasons as Brexit, Covid-19, Logistics, Climate Change, China/US relations, the Russian War, Energy/Costs, Unrest/Strikes. It’s almost too much to consider. Added to that there is a continued profitability decline at farm level with the net farm income significantly below what is required to farm sustainably. Only 9% of SA wine farms are at a sustainable level, 50% makes low profit, 3% breaks even and a worrying 38% operate at a loss.
How do we stay accountable when we are challenged by so many issues, out of our control? Who takes responsibility for our recovery? The way forward is together. We need consolidation and structural adjustment, we need the Wine Industry Strategic Exercise to be efficient and we need Government support. If we want a different result, we need to change how we do things. Another social media quote: “How do I break the pattern? Respond differently.”
While there are many outside challenges with labour, power, etc., it isn’t an excuse for a lack of introspection. We need to define the target market, simplify our message and stay accountable and transparent.
To help SA wine do just this, a new organisation, SA WINE NPC has been introduced to consolidate as many industry services as possible under one umbrella. The focus is on managing intelligence, innovation and communication. To ensure stakeholder engagement as well as enterprise, people and social development. Developing the local market and tourism, as well as ensuring financing and funding, are also on this jam-packed agenda.
Revolution as in Revolutionary. We have enough unrest and unease, but in this instance, revolution implies creative thinking and bravery. The challenge, according to Vinimark’s Helen Kock, is to “increase profitability and enhance creativity whilst limiting the cannibalism of the category.”
How do we get it right, consistently? We need the guts to simplify and the discipline to focus. We must step up and be honest with ourselves, be transparent and be accountable.
We have limited resources to market our wines internationally and that is why WOSA’s focus, although not necessarily a fit for all, is so important. Value focused growth as well as maintenance in established markets are of the utmost importance. So is supply chain. Think of the wine industry as the supply chain industry, says Seckford’s David Cartwright. “I have an obsession with availability”. I couldn’t agree more. You can have a magnificent product at a competitive price, but it only serves a purpose if it is available. If there is one thing, we should revolutionise it is logistics and supply chain!
Yes, the global economic outlook is dismal and it is easy to be depressed considering our domestic challenges. But if it is true that SA Wine is resilient, responsible and revolutionary, this quote by Nelson Mandela (borrowed from David Cartwright’s presentation), should keep us positive for the year ahead.
“I am fundamentally an optimist. Part of being optimistic is keeping one’s head pointed
towards the sun, one’s feet moving forward”. Nelson Mandela