South Africa has moved up from sixth to fourth position in the UK retail wine sector and increased its share of the market in 2002 to 9,5% from 7,9% in 2001, according to Su Birch, CEO of Wines of South Africa, the wine industry’s international promotional body.
South Africa also managed to record the fastest growth of any wine producing country for the year, according to AC Nielsen, Birch said on Monday.
“While the overall volume of retail wine sales in the UK grew 6% in 2002, South Africa achieved 27% growth over 2001 levels, outstripping Australia’s 23%. And for the first time the country had a brand listed in the top five wines retailed in the UK — with Kumala at number four.”
The UK is the fourth largest wine market in the world by value and its rapid growth is expected to continue, say international researchers of global wine trends. The region currently takes up over half South Africa’s bottled wine exports.
Commenting on South Africa’s continued success in the UK, Birch cautioned that the 27% increase in sales of bottled wine for 2002 –according to the SA Wine Industry and Information Systems (Sawis) — was only a preliminary figure, since not all transactions had been documented, and she believed actual growth would be higher. She added that far from saturating the UK market, Birch was confident of South Africa not only increasing its volume share but also its value share of the market, currently standing at 9,1%. Producers were being encouraged to focus efforts on the five pound category and above.
AC Nielsen research had documented the growing popularity of wine in the UK, which was now competing head-on with other alcoholic drinks. Other markets reflecting robust growth in South African exports in 2002 were the Netherlands, where sales of bottled wines had risen 22% on 2001; Germany, where they had increased by 16%, and the US, where volumes had grown 31%. Exports had also grown significantly to Denmark (28%) and Finland (37%), and were back on track in Sweden, prompting WOSA to appoint a representative in the Scandinavian block at the beginning of this year.
The establishment of the SA Wine & Spirits Company last year, she said, was unifying the local wine industry, bringing producers, labour and marketers closer together in a common effort to build international competitiveness.
In addition, the change in the composition of the national vineyard, which was addressing the higher demand for red wines, would play a major role in growing the market, along with improved viticultural practices that were promoting quality standards.
Birch cautioned that the battleground would shift from the lower end of the market to the $5 price point as the larger international producers began servicing a slightly higher price segment and the premium producers started pushing volumes to create an economy of scale.
Price and margin risk at this price point will assume increasing importance.” – I-Net Bridge