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Slideshow
South Africa: Say hello, wave goodbye
With a second New Wave South Africa tasting in London, Tim Atkin MW examines a country that is greeting a wave of dynamic new producers, and trying to bid farewell to its top wines being under-priced.
Where old meets new: winemaking at Waterkloof. Photo by Tim Atkin MWThe second New Wave South Africa tasting takes place in London this month, and it’s fair to say that it’s something of a hot ticket. The venue – “part creative community, part arts venue”, according to its website – is Village Underground in (where else?) trendy Shoreditch. It’s an appropriate setting for the winemakers who will be attending, many of whom are surfers, or look as if they should be. You won’t see a suit and tie on the day, but you will see a lot of T-shirts, ripped jeans and beards. The term “rock star” is overused in wine circles, but, with a few craggier exceptions, these are the Cape’s so-called Young Guns.
Ask a sommelier, journalist or independent retailer which country is producing the most exciting wines in the world right now and I suspect many of them would say South Africa. The combination of young talent, old vines, good press and an esprit de corps that is reminiscent of Australia in the 1990s has made the Cape a cool place to visit, taste and write about.
At a time when the price of fine wine from elsewhere is escalating – 2016 Bordeaux being the most recent example – South Africa is producing wines that are increasingly good and supremely affordable. I’ve just published my 2017 South Africa Special Report, for which I tasted nearly 1,700 wines; barely a dozen of them retail for more than R1,000 (£58) in the domestic market. Eben Sadie was voted the Winemakers’ Winemaker in this very magazine earlier this year, but by the standards of previous winners, his wines are inexpensive. For wine lovers, South Africa offers something special.
Feature findings
> The second New Wave South Africa tasting takes place in London this month, highlighting the releases of the Cape’s Young Guns.> South Africa is producing wines that are increasingly good and supremely affordable, but Mike Ratcliffe of Warwick and Vilafonté thinks the low prices betray a lack of confidence from the industry.
> The turbulent political climate in South Africa has an effect on the winemaking industry, with politicians seeing “alcohol as a cause of socially dysfunctional communities”.
> The wine industry has problems of its own, related to lack of water, low yields, declining grape prices, and an image that is unfairly out of step with reality.
LACK OF CONFIDENCE
Are the top wines too cheap? Some people believe they are. Mike Ratcliffe of Warwick and Vilafonté thinks that this betrays a lack of confidence. “Refusing to match the prices of our global peers is an albatross around the neck of the South African wine industry,” he says. 4G Wines, which sells its top red at R4,900, is sometimes mocked for being outrageously expensive, but it’s trying to make a statement about the quality of South African wine. “We are coming from a Bordeaux perspective,” says co-owner Phillip Axt. “We want 4G to be one of the rarest wines in the world.”
It’s important to recognise where South Africa has come from and what it has achieved in a generation. Very few, if any, of the 56 wineries that will be exhibiting at the New Wave tasting existed in 1994, when the first fully democratic elections were held. There are some excellent “historic” producers in the Cape – Kanonkop, Klein Constantia, Rustenberg and Vergelegen, for instance – but amid all the talk of antiquity, we should remember that the modern South African wine industry is not even 25 years old. That explains some of the excitement about what’s happening right now.
Anyone who reads the papers or scans the internet will know that not every story about South Africa could be termed good news, however. The country as a whole is in poor shape. GDP has stagnated, unemployment is running at 27.2%, the rand is weak and a recession is a real possibility, even after July’s interest rate cut. The economic outlook is bleak. And politically, things are no better. Jacob Zuma narrowly survived the fourth noconfidence vote of his presidency in August, but still faces 783 charges of corruption. Zuma may step down as leader of the ANC in December, but his term as leader of the country has two years to run, and there is a real possibility that his ex-wife, Nkosazana DlaminiZuma, will succeed him. As The Economist commented: “Few can be happy that Africa’s oldest liberation movement and a once-proud torchbearer of democracy has fallen so low.”
It doesn’t take a genius to realise that, with a contracting economy and a population that’s growing by 1.6% a year, South Africa is struggling to make ends meet. This has an impact on the wine industry, too. As Mick Craven of Craven Wines told me: “There is no money; the country is broke. If farmers here got what Aussie farmers do, we might not be in this mess. The situation is critical.” Government support is unlikely to materialise any time soon. Speaking at this year’s Nederburg Auction, the wine writer Michael Fridjhon argued that, if they take any interest in wine at all, “our politicians see alcohol as a cause of socially dysfunctional communities”.
Quite apart from wider economic and political considerations, the wine industry has problems of its own, related to lack of water, low yields, declining grape prices, an image that is unfairly out of step with reality, especially at the top end, and the occasional bit of bad publicity (sometimes with an agenda) about labour relations and levels of pay on some wine farms. And to top it all, approximately 60% of all South African wine farms are either marginal or are losing money, according to local industry body Vinpro.
At current grape and wine prices, South Africa has too many vineyards to sustain its long-term future. The issue is already starting to have an effect. South Africa reached a peak of 102,146 hectares in 2006 and the figure has been in decline ever since, with an average annual loss of 640ha and 100 growers. The signs are that this will “continue in the medium term”, according to the agricultural economist Pieter van Niekerk. 2016 was the first year on record to see a fall in the area under vine in all nine wine-producing regions.
Eben Sadie, winner of the 2017 Winemakers’ Winemaker award, and his dogThe problem is particularly acute for South Africa’s much-vaunted old-vine sector, which, by definition, produces smaller crops. As Simon Back of Backsberg says: “The old-vine market needs to be totally recalibrated to give these guys a living.” Even at R16,500 a ton, it’s not easy to make one. I heard of two Young Guns who pay R20,000 for prized fruit, but most grapes sell for between R3,500 and R9,000. Ironically, it’s often more profitable to grow grapes in a high-volume area like Olifants River than it is in premium regions such as Stellenbosch, Elgin or the Walker Bay.
If this all sounds a bit gloomy, then it’s worth emphasising that there’s nothing wrong with the quality of South African wines – quite the opposite. They remain on a steep upward curve and continue to delight me, as well as other critics, both in South Africa and overseas. The industry is dynamic, exciting and still evolving. It is still attracting new talent, still exploring its boundaries in search of new terroirs. In wine terms, the Cape has never been in better shape.
Tasting for my report, there wasn’t a single category that didn’t impress me this year. Even the aromatic whites from the hot, dry 2016 vintage, which I expected to be flabby, were often delightful. And just wait for the Sauvignons in 2017. Chenin and Chardonnay are very strong varieties in the Cape, as is more historic Semillon. Among the reds, I was excited (as ever) by the Syrahs and Rhône blends, but also by the Pinot Noirs, the Cabernet Francs, the Pinotages, the Bordeaux red blends and the growing number of serious Cinsaults. The méthode cap classique bubblies were also fantastic this year and are now deserving of serious attention.
Why don’t more people realise what’s going on in South Africa? The answer is partly ignorance, but also related to image. South Africa occupies the bargain basement in many markets – only Spain has a lower bulk price and its vineyard area is nearly 10 times larger than the Cape’s – and provides more than acceptable drinking at cheap prices. That is its strength as well as its weakness.
SA’S BIGGEST MARKETS
It’s hard for a wine country to promote a premium image when it sells 61% in bulk. If anything, the trend is getting worse. In 2002, the figure was only 31%. On a more positive note, South Africa’s two biggest markets (the UK and Germany) are importing more in bottle and less, relatively speaking, in bulk.
South Africa’s domestic market is faring considerably better and has shown good growth over the past four years at an average of 5.75%. Gauteng (Johannesburg) now buys more packaged Cape wine than the UK does. Much of this success is down to 4th Street, Distell’s Naturally Sweet Rosé, Red and White range, which appeals to new wine drinkers. It’s not Kanonkop’s Paul Sauer, but it’s expanding the market. And that’s vital at the moment.
So where does the industry go from here? By 2025, the industry would like to see a 5% return investment for producers (it’s currently -2%), more black ownership, fewer bulk exports, more ethically accredited brands, a greater numbers of tourists, the development of the American, Chinese and pan-African markets and lots of new jobs. Pie in the sky? Maybe. Or maybe not. But first South Africa needs to increase its average price. If the New Wave tasting, beards, T-shirts and all, can help to do that, it will have performed a vital service.
A winemaker’s view: Bruce Jack – How can South Africa improve fine wine sales?
Each market has its own challenges and solutions. Some countries sell quite a lot of fine South African wine, especially in the East. China is the biggest export market for the Drift Farm wines from my estate. And we sell a shed-full of the posh stuff at home. The UK, of course, is lagging behind in comparison, [in terms of sales] something that is made doubly embarrassing when one considers how informed the consumers are and how mature the marketplace is. It can seem a very frustrating place to sell fine wine as a result. The UK’s dalliance with socio-political tribalism, aka Brexit, has been a further recent blow, but this complex fine wine malaise runs deeper, with various elements to blame.
THE £10 BARRIER
A few big SA players have made a real effort here in the past few years, none more so than Accolade. By following a ladder approach with Kumala Reserves, they have given the supermarket consumer a reason to buy up, which we know provides the confidence to push past the £10 barrier for the average punter energised by a bout of adventurousness. Once they’ve done that and are impressed with the result, our consumer insight shows the fine wine world is within grasp. Accolade has also been roundly applauded for a persistent, committed building of the Flagstone brand in the UK on-trade in the past decade, where it is now second only to Kleine Zalze in volume, and probably the leading SA brand by value. But perhaps the coolest move was getting listings of the ultrapremium Pinotage called Flagstone Time Manner Place in travel retail, such as at Heathrow Terminal 5. At more than £70 a bottle this sits firmly in the fine wine category and sells unexpectedly well. It is, of course, delicious, which helps resale. There is a lesson here for building fine wine sales – travel retail is crucial as part of that halo of quality strategy. Outside of the UK there are a few players, like the Rupert group, leading the fine wine charge, again especially in the East. But the collaboration making the most inroads globally for fine SA wine is PIWOSA. Chaired by Rollo Gabb from Journey’s End, and with experienced players like the Jordans, Ken Forrester, Paul Cluver and Alex Dale, it is the most active and organised. Over the past four years they have undertaken serious, collaborative tours of the UK, Singapore, Abu Dhabi, Hong Kong, China, Japan and Canada. That’s a massive commitment from the 10 small wineries involved – both in time and in financial terms. Their target has been the white tablecloth on-trade and fine wine shops of the world. It is working very well. The protocol is simple – get sommeliers to taste fine South African wine blind against the best from France – stand back and, as the wines are revealed, watch the lightbulbs come on – then start delivering. The UK has been slower in terms of results, but this may have something to do with the high concentration of French sommeliers in target on-trade establishments, and is understandable. Unfortunately, outside of the independent off-trade (and some internet retailers) the UK still offers comparatively meagre pickings for SA fine wine. It absolutely amazes me that there are not more UK buyers at the annual Cape Winemakers Guild Auction. The rest of Europe is there, especially from Scandinavia.
HISTORICAL PREJUDICE
I suspect there is just too much historical prejudice among wine critics and sommeliers, and this continues to influence the current crop of non-socia lmedia-savvy fine wine consumers. The good news is that in markets where the gatekeepers are less enthralled by a Eurocentric bias or Francophile sentiment, consumers are also more open, and South African fine wine is flourishing naturally. I fear SA producers and their agents may spend less time and effort trying to win the fine wine battle in the UK. This would be short-sighted, because there is a revolution coming in the form of social media and the power of shared consumer opinion. Like the revolution that contributed to the downfall of Apartheid, timing is everything because we are producing some of the most exciting wines in the world. That consumer opinion, when it falls in love with these wines and picks up momentum, will turn fortunes on their heads.
REPUTATIONAL INTEGRITY
My advice would be to stick at it – reputational integrity is a global-village phenomenon, and in the same way the UK contributed to the establishment and reputation of the great wines of France, it will do the same for South Africa. My suspicion is that this will be despite the slow adoption of “experts”. It will be led by an accumulation of millions of consumer-opinion shards, and will end up looking like a formidable sales engine. The gate-keepers with insight and experience of fine SA wine, like Alistair Viner at Hedonism Wines and Greg Sherwood MW at Handford Wines in London are already reaping the benefits of this phenomenon. Value for money, rather than the laws of fickle fashion, will fuel this revolutionary engine, and South Africa will not be the only winner. Spain, Portugal, Canada, even England, and so on… will benefit similarly. Bruce Jack is owner of The Drift Farm and chief winemaker at Accolade Wines South Africa
THE £10 BARRIER
A few big SA players have made a real effort here in the past few years, none more so than Accolade. By following a ladder approach with Kumala Reserves, they have given the supermarket consumer a reason to buy up, which we know provides the confidence to push past the £10 barrier for the average punter energised by a bout of adventurousness. Once they’ve done that and are impressed with the result, our consumer insight shows the fine wine world is within grasp. Accolade has also been roundly applauded for a persistent, committed building of the Flagstone brand in the UK on-trade in the past decade, where it is now second only to Kleine Zalze in volume, and probably the leading SA brand by value. But perhaps the coolest move was getting listings of the ultrapremium Pinotage called Flagstone Time Manner Place in travel retail, such as at Heathrow Terminal 5. At more than £70 a bottle this sits firmly in the fine wine category and sells unexpectedly well. It is, of course, delicious, which helps resale. There is a lesson here for building fine wine sales – travel retail is crucial as part of that halo of quality strategy. Outside of the UK there are a few players, like the Rupert group, leading the fine wine charge, again especially in the East. But the collaboration making the most inroads globally for fine SA wine is PIWOSA. Chaired by Rollo Gabb from Journey’s End, and with experienced players like the Jordans, Ken Forrester, Paul Cluver and Alex Dale, it is the most active and organised. Over the past four years they have undertaken serious, collaborative tours of the UK, Singapore, Abu Dhabi, Hong Kong, China, Japan and Canada. That’s a massive commitment from the 10 small wineries involved – both in time and in financial terms. Their target has been the white tablecloth on-trade and fine wine shops of the world. It is working very well. The protocol is simple – get sommeliers to taste fine South African wine blind against the best from France – stand back and, as the wines are revealed, watch the lightbulbs come on – then start delivering. The UK has been slower in terms of results, but this may have something to do with the high concentration of French sommeliers in target on-trade establishments, and is understandable. Unfortunately, outside of the independent off-trade (and some internet retailers) the UK still offers comparatively meagre pickings for SA fine wine. It absolutely amazes me that there are not more UK buyers at the annual Cape Winemakers Guild Auction. The rest of Europe is there, especially from Scandinavia.
HISTORICAL PREJUDICE
I suspect there is just too much historical prejudice among wine critics and sommeliers, and this continues to influence the current crop of non-socia lmedia-savvy fine wine consumers. The good news is that in markets where the gatekeepers are less enthralled by a Eurocentric bias or Francophile sentiment, consumers are also more open, and South African fine wine is flourishing naturally. I fear SA producers and their agents may spend less time and effort trying to win the fine wine battle in the UK. This would be short-sighted, because there is a revolution coming in the form of social media and the power of shared consumer opinion. Like the revolution that contributed to the downfall of Apartheid, timing is everything because we are producing some of the most exciting wines in the world. That consumer opinion, when it falls in love with these wines and picks up momentum, will turn fortunes on their heads.
REPUTATIONAL INTEGRITY
My advice would be to stick at it – reputational integrity is a global-village phenomenon, and in the same way the UK contributed to the establishment and reputation of the great wines of France, it will do the same for South Africa. My suspicion is that this will be despite the slow adoption of “experts”. It will be led by an accumulation of millions of consumer-opinion shards, and will end up looking like a formidable sales engine. The gate-keepers with insight and experience of fine SA wine, like Alistair Viner at Hedonism Wines and Greg Sherwood MW at Handford Wines in London are already reaping the benefits of this phenomenon. Value for money, rather than the laws of fickle fashion, will fuel this revolutionary engine, and South Africa will not be the only winner. Spain, Portugal, Canada, even England, and so on… will benefit similarly. Bruce Jack is owner of The Drift Farm and chief winemaker at Accolade Wines South Africa