The future of SA wine and liquor exports is at stake if business leaders continue to focus on increasing number instead of creating value.
In the future, your farm is going to need to drive profitability, global competitiveness and sustainability. And to do this you’ll need to transform your brand from something people buy in bulk, to something people savour. “This specifically includes shifting the industry from a production orientation to a market orientation,” says Anton Smuts, chairperson of Vinpro.
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At the International Wine and Spirits Competition in London, SA brandies won 27 medals and the trophy for Worldwide Best Brandy went to for KWV for its 15 Year Old potstill brandy. This is the type of reputation the SA liquor industry needs to develop.
Here’s what you need to know about this need for a change in strategy in South Africa’s liquor industry:
The shift to sustainability comes with value
Wine and other liquor producers need to shift their focus from getting their product to everyone, to reaching the right audience. “In my opinion, South African wineries should refrain from dumping wine at giveaway prices,” says Anton Smuts, the newly elected chairperson of Vinpro.
He adds that by ‘giving away bottles’ it damages the reputation of the wine industry at large. There is a growing need in the SA wine and liquor industry to shift from bulk wine exports to branded, packaged products.
The quality already exists
Internationally acclaimed South Africans in this industry are growing, allowing the whole market to flourish. Female winemaking star and Young Gun Jessica Saurwein just created a Saurwein nom Pinot noir, which earned her a 92-point rating by a renowned international wine critic.
KWV won the IWSC trophy for Worldwide Best Brandy, which it has won eight times. “Once again, South African brandy has shown that you don't have to look far to find a product that is the best by international standard,” says South African Brandy Foundation director, Christelle Reade-Jahn.
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The future of SA liquor
If this is what the current level of South Africa’s wine and liquor industry is sitting at, why then are industry experts so concerned about its future? In 2015, the wine market made 80 000t over what was consumed. In 2017, there could be a shortage.
What does this mean for you? You’ll need to change up your strategy to remain profitable and sustainable. “The industry will probably be smaller in total hectares planted to vines, but more profitable and more sustainable. Strategic alliances and mergers are likely to play an important role in the next decade, which should result in a less fragmented supply base,” says Smuts.
“The global trend in favour of premium spirits was also identified during the IWSC, and South African brandies already have a big offering here,” says Reade-Jahn.
It’s time for your operation to focus on increasing value and creating a premium product, instead of making a large amount of above average products. This is because of the limited space South Africa has to work with, it can’t keep up with global demand in the high quantity category, but in the supremely high-quality category, there is definitely space for local connoisseurs.
- The amount of land available for vineyards and orchards are limited, which means members of the SA liquor industry need to focus on quality, not quantity to remain sustainable and profitable.
- SA liquor already has connoisseurs of the highest calibre across the industry.
- The global trend is favouring premium spirits, it’s time for SA to join this lucrative trend.