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VinPro reports ‘exceptional’ 2015 wine harvest

20th March 2015

By: Megan van Wyngaardt

Creamer Media Contributing Editor Online

  

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While the 2015 South African wine grape harvest showed great promise, and domestic wine sales were at the highest level in 20 years, exports and wine producers’ and cellars’ profitability remained challenging.

Speaking at the Wine and Fruit Industry Update, at De Grendel Wine Estate, near Cape Town, VinPro MD Rico Basson noted that the current harvest year marked the third season in a row in which the South African wine industry realised a large wine grape crop.

“Although it will be slightly smaller – close to 3% – than the record harvest in 2014, winemakers and viticulturists laud the 2015 harvest as one of remarkable quality throughout the cultivar spectrum,” he said.

It was expected that the total wine grape harvest would reach cellars by the end of this month. The harvest kicked off two weeks earlier than normal, partly owing to a warmer August, followed by a dry and hot summer, which sped up ripening.

The South African wine industry harvested close to 1.5-million tons of wine grapes, on average, for the production of about 900-million litres of natural wine a year. Exports represented 55% of natural wine sales, with the balance sold locally.

At the end of 2014, local wine sales volumes were at the highest level in 20 years, with the 353-million litres sold representing a 7.3% increase on that sold locally in 2013. This growth was largely driven by bag-in-box packaging (17.4%), which represented close to 29% of local sales. Wine sales in 750 ml glass bottles, which represented 30% of the local market, grew by 11%.

“We are excited about the good growth in local wine sales. Some of the factors that contributed to this, include a strong focus on wine tourism in the Western Cape, marketing alignment in the past few years, as well as a growing middle-class trading up to branded goods,” said Basson.

EXPORTS
European Union (EU) countries were South Africa’s main wine buyers, resulting in a challenging export market. “The recessionary slump and surplus product in certain categories still has an effect on sales in these countries; however, we are seeing stable growth in the UK,” Basson added.

Wine exports to China rose sharply from 5.7-million litres in 2013 to just over 8.7-million litres at the end of 2014 – the majority being packaged wine. Africa was also a key focus area for wine export growth, with an increase in infrastructure investment aiding market access.

Basson said the high quality of this year’s wine grape harvest strengthened the wine industry’s drive towards promoting premium packaged wines. The ratio of wine in bulk versus packaged was 60:40, with wine exported in bulk being bottled overseas.

“Key players in the industry are busy with a strategic initiative, through incentives from an economic partnership agreement with the EU, to bring bottling back to South Africa. This will add economic value and promote job creation,” he added.

“The growth in domestic sales and [the] promising wine harvest are definitely worth celebrating. However, the industry and its producers and cellars still face some key challenges to profitability,” cautioned Basson.

He added that the South African wine industry was busy with a Wine Industry Strategic Exercise, which would result in strategic initiatives to tackle these challenges and close gaps in the value-chain. “A multistakeholder approach, including close partnering with government, will be crucial in achieving success,” he said.

ETHICAL TRADE
Emphasising the importance of ethical trade in the wine industry, Basson said that 60% of all Fairtrade-accredited wine sold in the world was from South Africa.

Wieta – South Africa’s agricultural ethical trade initiative – now included close to 1 300 wine producer and cellar members, with strong growth in accreditation volumes currently seeing 26% of the total wine grape harvest (around 400 000 t) being ethically accredited. “Through these and other ethical trade accreditations, the wine industry is making sure working conditions adhere to, and exceed, those stipulated in labour legislation,” he added.

Edited by Chanel de Bruyn
Creamer Media Senior Deputy Editor Online

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