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Wine and grapes
OVERVIEW Wine and grapes
Resilience is now part of the grape-growing story.
Wine tourism in the Western Cape grew 16% in 2017 compared to 2016, according to a study done by Wesgro and Explore Sideways. This illustrates that the value of wine to the regional economy goes far beyond grapes and wine.
The study, which surveyed 40 tour operators responsible for 19 000 trips, also found that 99% of Cape Town-based itineraries include a trip to the Winelands.
A Vinpro report shows that wine tourism contributes R15-billion to the local economy. Local wine sales bring in R13.2-billion. Excise and other taxes paid by the wine industry amounted to R6.7-billion in 2017, up by 8% from the previous year, according to Koos Nel of Old Mutual Personal Finance.
Wine sales and exports are the most obvious economic contributors but in a broader sense, sectors such as agri-processing, tourism, hospitality, manufacturing, retail and trade are all affected by wine grapes in one way or another.
Nel has also drawn attention to how well the wine and grapegrowing sector is responding to prolonged droughts. Although the yield in 2018 was expected to be
SECTOR INSIGHT
Wine tourism contributes R15-billion to the regional economy.
about 15% lower than previous years, the harvest suffered a much larger percentage loss than that figure. Producers have invested in new areas, new cultivars and clones and started using new technologies to lesson the impact of climate change. The Wesgro study found that wine tourists tend to spend somewhat more than other visitors and that they wanted bespoke tours rather than “packaged” tours. An interesting finding was that many tourists are just as concerned about sustainability as farmers and producers are in the modern era. Fully 85% of wine tourists, when booking, mentioned sustainable issues such as biodynamic winemaking, carbon neutrality, organic farming and social equality. Other areas of interest that attract the most support from visitors, according to the tour operators, are food and wine pairings (68%), cellar tours (54%), meeting the winemaker (51%) and food and wine tasting events (49%). Tour operators are also branching geographically in terms of destinations. The Hemel-en-Aarde Valley (Hermanus) is growing in popularity, as are the Robertson Valley, Helderberg and the Swartland. Old favourites such as Stellenbosch, Franschhoek, Paarl and Constantia are still popular but the appetite for something different is increasing. The Cape Winemakers Guild meets regularly to discover new tastes from around the world and to try to expand members’ knowledge. Started in 1982, the Guild is made up of experienced winemakers who want to explore their chosen trade. One of the Guild’s respected veterans, Beyers Truter, believes that the best thing about the Guild is “the dissemination of knowledge”. The openness where one can talk about the good and bad things in wines encourages introspection and growth. As the founder of the Pinotage Association, Beyers is clearly a winemaker concerned about improving quality.
A Protégé Programme is offered to trainee winemakers and the Viticulture Protégé Programme, run by the Guild in conjunction with VinPro, offers a two-and-a-half year internship for newly graduated viticulturists in cultivation practices.
Exports of wine
Another way of countering the effect of smaller harvests has been to aggressively grow exports. Wine exports to Angola and China have doubled. In the four years to 2017, wine exports to China reached 18.2-million litres, an increase of 109%.
The Chenin Blanc Association of SA believes that the US is a ripe market for its wines. Financial Mail reported in 2017 that South Africa’s 17 799ha of Chenin plantings is greater than the rest of the world combined, and many of the vines are old, which creates better quality. SA currently exports 11Ml/year into the US, a small fraction of the 920Ml/year that that country imports.
In a recent development, wineries in greater Cape Town now have their own regional identity. The likes of Groot and Klein Constantia, Buitenverwacthing, Diermersdal and Cape Point Vineyards will from now on carry the label “Wine or Origin Cape Town”, linking them to one of the bestknown city brands in the world.
There is a move to try to shift South Africa’s focus away from bulk wine sales, to bottled wines. The website beveragedaily.com quoted the managing director of Origin Wines stating that for every 10-million litres of additional wine bottled in South Africa in 2016, additional direct income of R200million should accrue to the Cape Winelands.
The decision by Britain’s electorate to extract the country from the EU will lead to some complications, but the new situation could also lead to many new opportunities. The EU may push for the reduction in some of the figures set for imports (on the basis that a chunk of the allocation would be going to Britain), but Britain will surely want to negotiate a good deal with South Africa as quickly as
Cape Winemakers Guild protégés.
possible. France and Italy have shown a keen interest in strengthening ties with South Africa in the months since Britain decided to leave the EU.
There are over 3 500 wine producers in South Africa, with the large majority located in the Western Cape.
Wine is produced by estates, independent cellars and producer cellars or co-operatives. The Distell group runs five distilleries and seven wineries in the Western Cape, produces about a third of the country’s natural and sparkling wine and is ranked 12th in the world in terms of global wine volume sales.
The multi-brand KWV was sold in 2016 to consumer investment group Vasari. Wellington Wines is a new venture that arose from the merger of the Wellington Co-operative and the Wamakersvallei Cooperative. DGB is a large wine and spirits company that makes much of its own product at five famous wineries. These include Boschendal, Bellingham and Douglas Green. Edward Snell & Co is a wine and spirits wholesaler that also makes its own line of spirits. Fourteen brandy distilleries can be visited on the Western Cape Brandy Route and a further six on the R62 Brandy Route on the road east.
Table grapes
The South African Table Grape Industry Partnership (SATGI) is a partnership whose board membership represents every growing
ONLINE RESOURCES
Cape Winemakers Guild: www.capewinemakersguild.com Nietvoorbij Institute for Viticulture and Oenology: www.arc.agric.za SA Wine Industry Information & Systems: www.sawis.co.za South African Table Grape Industry: www.satgi.co.za Vinpro: www.vinpro.co.za Western Cape Department of Agriculture: www.elsenburg.com Wines of South Africa: www.wosa.co.za region. The industry’s contribution to the national GDP is estimated at more than R3-billion.
The table grape industry provided over 46 000 direct jobs during the 2015/16 harvest to the Western Cape. The Western Cape is responsible for 65% of total production volumes in table grapes.
There is also a significant contribution to downstream production income – R3.2-billion to other product input providers, R720-million to packaging material suppliers and R250-million to logistics suppliers.
On farms with black ownership, income of R183-million was generated in 2014/15.
Key industry figures for the annual national harvest: • more than 85 000 jobs • wages valued at R950-million • additional R600-million job creation by suppliers in the value chain.
Three of South Africa’s grapegrowing regions are located in the Western Cape: • Olifants River: the river flows from the Cedarburg Mountains westwards towards the Atlantic Ocean via Namaqualand. • Berg River: the Du Toitskloof
Mountains are the main geographical feature of this region named for the strong-running river which irrigates the fields of grape varieties such as Red Globe,
La Rochelle and Bonheur. • Hex River: the river runs past the
Matroosberg where snow falls are a regular occurrence. Popular varieties are La Rochelle, Sunred
Seedless and Barlinka.
The South African wine industry is on a growth path
Vinpro is a non-profit company which represents 2 500 wine producers, cellars and industry stakeholders.
The South African wine industry is entering a new phase of revival and reinvestment following a long and arduous cycle characterised by drought and ongoing profitability pressures. However, the industry has and will continue to adapt on all fronts. Not only to maintain a sustainable source of income, but to be able to nurture and grow its two biggest assets – its people and its vines.
South Africa is the eighth-largest producer of wine in the world and contributes 4% to global production. The industry contributes R36-billion to the country’s gross domestic product (GDP) and employs close to 290 000 people.
“The only way to a sustainable supply going forward is increasing the prices of our wines, so that wine grape producers have sufficient financial means to plant and renew vines, increase production, and are able to accelerate the already significant investment in socio-economic aspects including further training and upliftment of their people,” says Rico Basson, MD of the wine industry body Vinpro.
“It is encouraging to see wine grape producers now getting back to establishing, replacing or expanding existing vineyards,” says Rico. This growth comes after a five-year lag in investment due to profitability pressures.
An increase in sales, drop in production and stock levels reaching equilibrium implied a significant shortage of wine to service markets at 2017 levels. Local and global wine shortages resulted in wine prices inching higher.
Although producers are optimistic about the 2019 wine grape harvest following very good winter rainfall in most areas, they have also learned to adapt to climate change by making use of alternative practices and technology, investing in new, drought-tolerant clones and cultivars, continuously evaluating the financial viability of vineyard blocks and venturing into new geographical regions.
“Nearly five jobs are created for every R1-million invested in the South African wine industry. It is the industry’s collective responsibility, with government and civil society, to drive transformation, ethical trade, socio-economic development and talent growth and retention at every level,” says Rico.
Vinpro represents South African wine grape producers, cellars and wine-related businesses, while providing strategic direction, rendering specialised services and driving people development.
For more information phone 021 276 0429, e-mail info@vinpro.co.za or visit www.vinpro.co.za.
The South African Table Grape Industry
The South African Table Grape Industry (SATI) is the industry association of table grape producers which aims to establish South Africa as the Preferred Country of Origin for the world’s best-tasting grapes. SATI represents growers on key government and industry initiatives aimed at creating more opportunities, from ownership to accessing new markets in a sustainable way. South African table grape growers and exporters are committed to being a reliable supplier of table grapes by delivering a safe, flavour-filled product of the highest quality. Table grape growers from South Africa meet the highest global food safety and ethical standards required by different world markets.
Vision
South Africa is the Preferred Country of Origin for table grapes and will provide every table grape producer as wide a choice as possible with profitable markets.
Mission
SATI delivers service excellence to create a progressive, equitable and sustainable South African Table Grape Industry.
SATI’s key areas of intervention
• Technical market access • Research and technology transfer • Information and knowledge management • Transformation • Communication and stakeholder engagement • Human capacity and skills development • Technical support
SATI is funded by a grower levy and is a co-founder and a key supporter of the Sustainability Initiative of South Africa (SIZA).
A world of variety
There are five major growing regions in South Africa. The difference in soil and climate enables growers to supply the markets from November to May. The early season is dominated by varieties from the northern provinces and the valleys of the Orange and Olifants Rivers, followed by table grape varieties from the Berg River and Hex River regions. The South African table grape industry is ideally positioned to work with the government on all levels to make a significant contribution to the primary goals of the National Development Plan, namely job creation, rural development and the earning of foreign revenue.
