Record export figures in 2012 have prompted optimistic reports from South Africa after years of concern over the country’s rising balance of bulk wine shipments.
WOSA CEO Su Birch
As Wines of South Africa confirmed exports of 417 million litres in 2012, beating the previous record of 407m litres in 2008 and representing a 17% increase on 2011, the organisation’s CEO Su Birch outlined the reasons for this strong performance.
“The record levels are the result of a more favourable currency, as well as the global shortage of wines, stemming from a significant drop in the recent harvests of competitor wine-producing nations in Europe, Latin America, Australia and New Zealand,” she explained.
As South Africa’s producers prepare for the 2013 harvest, Birch suggested a cautiously positive outlook, noting: “At this stage, all indications are that this year’s local crop could be the third biggest in recorded history.
“This is assuming that good weather conditions continue, there is a speedy and peaceful resolution to the farmworker strikes and harvests come in on time. The anticipated crop size is despite a decrease in total plantings, thanks to one of the best winter seasons in the Western Cape for many years.”
According to South Africa Wine Industry & Information Systems (SAWIS), the 2013 wine grape crop is expected to reach 1,384,357 tons.
Despite the continued dominance of the country’s bulk wine exports – they accounted for 59% of total volume shipments in 2012 – Birch argued that this figure fell in line with a global trend that has seen a 20% increase in bulk shipments from major New World wine exporters during the past decade. “The reality we face also confronts Australia, Chile, Argentina and even New Zealand,” she observed.
Birch also pointed to a growing acceptance among South Africa’s producers that meeting today’s market demand for bulk wine sales was crucial to remaining competitive on a global scale. However, she added: “Obviously we would prefer the accent to be on packaged wines, from a reputational perspective for Brand South Africa, in terms of job retention in the packaging industry and also to maintain sustainable profit margins for producers.”
As a result, Birch welcomed signs of growth in packaged wine exports to North America, Japan, China and a number of economically buoyant African nations, all markets in which WOSA has stepped up its marketing investment.