by Meininger’s Wine Business International
South African wine exports have broken all records and are soaring in spite of the international economic slowdown, according to Su Birch, the director of Wines of South Africa (WOSA), in a recent press release. Over 363m litres
were exported during the 12 months to July 2008, an increase of 27% on the previous year. "This is way ahead of the originally anticipated target of 300m litres a year we were hoping to achieve by 2010,” she said.
The momentum continues despite tougher trading conditions since the start of this year. Export volumes are up 31% for the first seven months of 2008, thanks not only to a weaker rand and the continued strength of big brands in markets such as the United Kingdom, Sweden and Canada, but also the emergence of buyers in developing markets such as Angola and Southeast Asia.
In particular, exports have been fuelled by rising rosé sales, up 60% on the previous year, as local producers successfully cater to the thirst for pink wines on international markets.
These sales have occurred across a far wider geographic reach than ever before, reducing the country’s dependence on any single market. "Whereas in 2003, the UK and the Netherlands accounted for 72% of all South Africa’s packaged wine exports, today Sweden, Germany, Denmark and the United States must be added to the picture to reach that same figure.
That said, Birch is encouraged to see strong growth resuming in core markets: "Our exports of packaged wines are up 35% in the UK and we have recovered market share lost in 2006.”
The shift in the composition of South Africa’s biggest customers had seen Germany overtake the Netherlands to become South Africa’s second largest wine market. The fourth biggest destination is Africa, where rich economies are flourishing and traders recognise the efficiencies of sourcing within the sub-Saharan region, as opposed to in Europe, its traditional source of wines. South Africa was also the biggest volume player in Sweden and was the fastest-growing New World producer in most Canadian provinces.
Sounding a note of caution, Birch said there was some concern about the high growth in bulk wine that had risen over 50% for the 12 months to July, with many importers electing to bottle in Europe.
She stressed that while exports were expected to continue rising, it would not be possible to maintain such high levels of growth. "We were able to take advantage of the shortfall in Australian and certain European markets as a result of their poor harvest but their current supply is returning to more normal levels.”
