Total exports of South African bottled wines are set to grow by at least 20% to over 139 million litres in 2002, boosted by strong sales growth in the UK, Netherlands and other international destinations, says Wines of South Africa (WOSA) CEO Sue Birch.
Birch said on Thursday she believed that by 2003 wine exports could even reach the 200 million litre mark, more than double the 93 million litres volume achieved in 2000, despite the recent strengthening of the rand against other major currencies.
WOSA is the wine industry group charged with providing a united international marketing strategy for all of South Africa’s wine brands.
In her view, a growing visibility in key markets abroad, the recognition by foreign trade and consumers of the value South African wines offer across price points, and the rise in South African wine tourism were all contributing to the aggressive growth.
“The current volatility of the rand does not detract from the intrinsic value South African wines present, compared with those of other New World producers — even with the currency trading at R14 and lower to sterling,” she observed.
“South Africa also has the competitive advantage of being able to supply foreign markets with regionally diverse wine styles that highlight the Cape’s biodiversity.
Birch said that although the UK was an intensely competitive market and the single largest destination for South African wines, the market continued to offer extraordinary opportunities. For the first 10 months of 2002, sales were 33% up on the same period last year.
In the Netherlands, meanwhile, where South Africa sells more wine than any other New World producing country with 14% of the market, sales continued to climb in what many observers considered to be a static market. Bottled sales there were 22% higher for the first 10 months of this year compared with 2001.
According to Birch, other countries showing excellent potential for South African wine purchases included Sweden, where WOSA had just opened an office; Denmark, where the South African embassy was playing a key role in promoting local wines; and Germany, the world’s single biggest market for imported wines.
Sales to Germany were 17% higher for the first 10 months, and were expected to rise sharply given new opportunities identified by recent research, and as increasing numbers of local producers teamed up with distributors in Germany, added Birch.
South Africa ranked 13th on the German market with a 1% market share, which is dominated by Old World producers.
“Sales in Germany were hampered to some extent in the past by poor distribution,” she explained. “Although the major producers enjoy excellent ties with highly professional agents, many of the smaller wineries have tended to use small-scale distributors operating on a regionally exclusive basis and servicing inappropriate market segments.
“This problem has been exacerbated by leaving promotions solely to the distributors instead of also actively participating in the market, creating visibility for winemakers and developing opportunities for building relationships.” – I-Net Bridge