Distell Ltd , South Africa’s largest listed wine and spirits producer, said on Tuesday it is expanding the reach of its Nederburg wine brand into China and India, two of the world’s fastest-growing markets according to international research group Datamonitor.
Nederburg is the largest brand within Distell’s wine portfolio and the largest premium brand in South Africa. Nederburg has shown a 42% y/y growth in Asia-Pacific markets for the 12 months to August 2003 including Australia and New Zealand, the group said, where sales of the brand had been buoyant for some time.
Announcing the move on Tuesday, Distell said that China heads incremental growth in red wine sales worldwide, prompted by the drink’s trendy, aspirational Western image, news of its health-giving properties and the shift towards drinking beverages with a lower alcohol content than spirits.
Similarly, Indian consumers, according to Datamonitor, have begun switching from stronger alcoholic beverages to red wine for reasons of health and fashion.
In both these markets, white wine sales have also grown substantially. The availability of affordable products from New World countries is cited as the principal reason.
Distell’s group international general manager, Don Gallow, explained that with nearly half the world’s fastest-growing wine markets in Asia-Pacific, it was important for the company to develop distribution networks and strengthen marketing infrastructure to build a significant presence in what could become lucrative outlets.
“We must be ready to match the steady growth in disposable income of the region’s progressively affluent young adults. And although the demand for grape wine is still in its relative infancy, it is increasingly perceived as having moved beyond the exclusive domain of tourists to a wider public. This trend is consistent with the popularity of Western European cuisine.”
With the move into China and India, growth in the Nederburg brand in the Asia-Pacific region was expected to accelerate over the next 12 months, said Gallow. The brand was already the largest South African wine brand in Australasia.
“Nederburg will soon be on the shelves in the major centres of India and China,” he noted. “Such exposure for the brand, coupled with the influx of tourists from China and India to South Africa who will undoubtedly encounter the range while in the country, should bode well for its growth in these markets.”
Last year tourism from China to South Africa rose by 25% on 2001 and from India by 22%.
He added that Nederburg was also continuing to build on the solid growth achieved in Japan, currently the brand’s biggest market on the Asian continent. At the same time, with the focus on servicing retail markets in addition to on-consumption outlets, sales in Singapore were also rising rapidly, boosted with key retail listings.
Nederburg had also begun penetrating markets in South Korea, Taiwan, Hong Kong, the Philippines, Indonesia, Sri Lanka, Vietnam and the Maldives.
Gallow said that elsewhere sales were also continuing to climb. In Germany, the brand’s biggest market after South Africa, exports had risen sharply from an already substantial base, with volumes increasing 47% for the 12 months to August, enhanced by the launch of Nederburg’s new-generation wines, made under Razvan Macici, styled more in line with international preferences and given a more contemporary packaging.
The surge in sales to Germany was consistent with growth patterns elsewhere since the advent of the new-generation Nederburg. Exports to The Netherlands, for example, had more than doubled, augmented by new listings with Makro and some of its specialist chains, as well as positive reviews in Dutch wine media. — I-Net Bridge