Who's Who in South Africa

The wine industry of the Cape has had an even more turbulent time during the pandemic than most of its counterparts elsewhere. James Lawrence reports on how it is fighting back, and key players in its industry.

Behind the beautiful backdrop , the Cape wine industry confronts its challenges
Behind the beautiful backdrop , the Cape wine industry confronts its challenges

It's no secret that South Africa’s wine industry has had a hard time over the last 18 months . A succession of four Covid-driven prohibitions on the sale of domestic alcohol has done significant harm to the Cape's wine industry and the livelihoods it sustains. According to the oversight body, Vinpro, successive government bans put more than 21,000 wine jobs at risk, costing the government over 5 billion rand ($340m) in tax revenue. These gloomy figures, however need to be taken in the context of many top wine businesses posting record revenues  throughout the pandemic. One of the biggest casualties of the pandemic was wine tourism. Just three years ago, the Western Cape was renowned for boasting one of the most developed wine tourism infrastructures in the world, but, as in California, it is now being appreciated that its success came at a cost. 

“The problem is that Covid-19 has exposed existing structural weaknesses in the wine industry,” explains Alexander Waibel, owner of Constantia Glen. “A large proportion of the Cape's wine farms have been too reliant on domestic wine sales, either lacking the resources – or drive – to build up a reputation in the export markets. The pandemic has forced people to consider the future sustainability of their business model.”

Compared to 2020 and 2019, exports for the first six months of 2021 look encouraging.

In a report entitled 'The Impact of Covid-19 on the Wine Value-Chain', Vinpro also highlighted the precarious situation of black-owned wine farms, many of which rely on tourism to survive.

Daphné Neethling, owner of Paardenkloof estate in Walker Bay, says her estate is “a 100% black- and female-owned wine farm - almost 99% of our sales and income is dependent on the local tourism market.” She adds that any prospect of a fifth alcohol ban would probably cause her business to collapse.

Of course, it’s not just wine tourism. Visitors who don’t visit wine estates also contribute to the industry. Insiders estimate that at least 75,000 tourism and hospitality jobs were lost in 2020 in the Western Cape, due to travel bans and lockdowns. In September of that year, The Test Kitchen restaurant in Cape Town (previously named best restaurant in Africa) shut its doors for good.

“Many producers have not had the ability to build up export markets and the volume of unsold wine has built up significantly,” says Anthony Hamilton Russell, owner of Hamilton Russell Vineyards.
“The coming year or two will see discounting as unsold wine is 'flushed' - probably worldwide”. He continues. “But the people to feel for are those who have lost their jobs, often less well-resourced labourers. There has certainly been fairly significant downsizing in the industry.”

Total exports for 2020 – of 318m litres, were even lower than for drought-hit 2019 which managed 320m – compared with an annual average of 428m for the previous five years.

Fortunately, there are already reasons for optimism. In 2020, South African drinks giant Distell hit local headlines with the news that its total revenue fell by 14.6% in the month ending 30 June because of the prohibition measures. However, figures for the financial year showed sales bouncing back up by 26 percent, with EBITDA - Earnings Before Interest, Tax, Depreciation and Amortisation - doubling, and headline earnings up by 228 percent. 

2021 was a vintage to celebrate in terms of quality and generosity. Volumes were slightly higher than in 2017, and significantly bigger than the following three years. Producers across the country believed they had made some of their best ever wines. Sales too have been looking up.Total Cape wine exports for the first six months show a rise in total shipments of 38.7 percent in volume and 32.3 percent in value. Shipments to China doubled in value - to 202m rand ($13.75m) - possibly thanks to the gap left by tariff-hit Australian brands. Canada and the US saw significant growth, with shipments to rising by 131 percent and 226 percent respectively. The UK, often a low-value market also raised its game with imports that were up by 25 percent in volume, but 40 percent by value. Perhaps most striking, however, was the jump in value of 72 percent to other parts of Africa which collectively now come fourth on the table of Cape exports, with the potential to achieve a great deal more.

 

Despite all the difficulties - the 2021 harvest was one of the best in a long time

 

Tourism matters

The fourth domestic ban ended in July 2021 and restaurants and bars are open for business. “People are determined to fight on: venues have been renovating and are trying to come back stronger, so a lot of restaurants are still here,” explains Cape Town-based wine educator Erica Taylor.

Ultimately, much will depend on the next few months. The Western Cape is heading towards its high summer season – a vital part of the year that has traditionally seen millions of tourists pour money into the local economy. As an example, in 2019, 430,000 people visited South Africa from the UK. Until October 2021, any such travel has been almost impossible following the imposition of strict ‘red list’ quarantine regulations by the UK government on anyone returning from a visit there. 

Following the recent removal of those restrictions, Virgin Atlantic reported ‘a huge surge in demand’ and, while announcing the resumption of flights from London to Cape Town, also increased their frequency from the previous three, to seven per week. 

News like this will be music to the ears of South Africa's producers, but no one is dropping their guard quite yet. South Africa's Covid vaccination rates still stand at 31 doses per 100 citizens (with 17 percent of the population being fully vaccinated), compared to a figure for the continent as a whole of just 12.

 

Key Players in the South African Industry

Notable Sommelier: Wikus Human

South Africa has a fast-growing army of highly skilled and enthusiastic sommeliers. It is ver y hard to pick just one, but no one deserves the spotlight more than Wikus Human. Passionate, and extremely approachable, Human was recently given the award of 'Best Sommelier in South Africa' by the South African Sommeliers Association, taking top honours after competing against semi-finalists Jean Vincent Ridon and Laurie Cooper. Winner of the Moët & Chandon 'Best Young Sommelier' award in 2017, Human is now a member of the Court of Master Sommeliers and  running a hectic wine service at the two top flight Marble restaurants, in Johannesburg

”It’s important for me – as being a head sommelier for both restaurants – to make sure that any beverage service of my sommeliers – and even the waiters – are basically on the same level. Everyone needs to be able to do proper drinks or beverage service.” 

 

Wikus Human

 

Notable Restaurant and Best Wine List: FYN

Cape Town is really starting to make waves in the gastronomy stakes, Covid-19 notwithstanding. At FYN, executive chef Ashley Moss exemplifies everything that is wonderful about the city's dining scene. Adored by critics and consumers alike, FYN's sophisticated fusion cuisine merges the best elements of Japan and Africa's culinary heritage. Flagship dishes include the Iberico pork belly, paired with wasabi, mirin toffee apple and a light mustard 'jus'.  Such a range of flavours requires a versatile wine cellar – here, FYN does not disappoint. The wine list is surely the finest in the city, offering an extensive selection of vintages from every Cape region, with some concessions to imported labels like Moet & Chandon. But at FYN, South Africa triumphs. As it should.

 

The FYN team

 

Notable Wine Bar: Culture Wine Bar

While Cape Town wine lovers mourn the permanent closure of the impressive Waterfront Belthazar Restaurant and Wine Bar that resulted from Covid, they celebrate having Culture Wine Bar on nearby Bree St. A joint venture by Chef Matt Manning and Chris Groenewald, it offers a range of 20 wines by the glass that can change daily or hourly depending on demand. There is a generous nod to orange wine, and an understandable bias towards domestic brands. But diversity is the name of the game here; iconic – and expensive - wines like Sadie Family Wines Palladius make an appearance, as does a relatively small range of vintages from Europe and New Zealand.

Major Regional Promotional Body: VinPro

Founded in 2003 as an offshoot of the major cooperative KWV, Vinpro now represents almost 2,600 South African wine growers, producers, and wine-related businesses, providing strategic direction, specialised services and encouraging  development. It has been the loudest voice in repeatedly criticising the effects of successive alcohol prohibitions, highlighting the devastating impact on the Cape's wine industry. To that end, VinPro has instigated legal proceedings against the government in the Western Cape High Court.

Notable large retailers: Checkers, Woolworths and Ultra Liquors

The biggest retailer in South Africa is the Shoprite Group, whose Checkers chain has a very dynamic wine range. Ultra Liquors also gets much praise for the skill of its wine selection that was built up by Mark Norrish, former Checkers wine buyers and general manager of its wine division until 2019. Today, however, the focus is on another giant grocery chain, Woolworths which has recently hired a new beverage team that will work with consultant sommeliers in trialling the operation of specialist wine shops that will operate in addition to the 150 existing outlets. The independent retail sector is understandably worried.

Notable specialist wine retailer: Norman Goodfellows 

Norman Goodfellows is undoubtedly the most important specialist wine retailer in the country. There is a strong emphasis on managing a balanced portfolio, everything from entry-level brands to super-premium labels from Stellenbosch, Champagne, and Bordeaux. As one would expect, the company’s online channel has dominated the Covid period, as consumers continue to largely drink at home. The strongest competition comes from Susan Stanleys, an up-and-coming online retailer that offers an efficient and prompt service, specialising in the Cape’s boutique wineries and quality-focused brands.

Notable Wine US Importer: Cape Classics

Cape Classics, founded by brothers Andre and Gary Shearer in 1992, has become one of South Africa’s most important wine ambassadors. They have transitioned from a small business into the largest exporter of South African wines to the United States. Today the firm represents most of the prestigious Cape bands, in addition to running a charitable scholarship foundation in South Africa to help disenfranchised children. The brothers also pioneered a scholarship brand called Indaba, where a portion of the sale price is donated toward early childhood education for disadvantaged South African children.

Emerging Wine Region: Elgin    

Experimentation and innovation is part of Elgin's DNA. Sandwiched between the cool-climate Walker Bay district and Stellenbosch to the northwest, Elgin is now producing some of South Africa's most exciting wines. At the turn of the century, Paul Cluver was the only winery and Elgin was very much an unknown quantity. However, it has become a hotbed of investment, with producers like Tokara and Thelema crafting site-specific, racy whites and incredibly fine Pinot Noir. Meanwhile, Richard Kershaw has proven that Syrah can thrive in Elgin's terroir. The region's secret weapon is altitude: vineyards are as high as 420 metres above sea level, while rainfall is among the highest in the Cape. Elgin is a cool-climate terroir with unlimited potential.

 

 

Notable Wine Publication: Winemag

Informative, entertaining and sometimes controversial, Winemag – the online platform that evolved from a print magazine called WINE that was launched in 2011 - is not afraid to tackle difficult and thought-provoking subjects. It is run by Christian Eedes and has an esteemed panel of writers including distinguished local critic Michael Fridjhon, British author and journalist Jamie Goode, and Greg Sherwood MW, head buyer at Handford Wines in South Kensington, London.

Notable Wine Opinion Formers

Christian Eedes, Michael Fridjhon and Tim James are the leading local critics among a strong band that also includes Greg Sherwood MW and Tim Atkin, both of whom are based in the UK. Atkin’s annual report has become very influential, and his high scores arguably now fill a similar role to the one previously occupied by recommendations in the Platter Guide which also still has a strong following. Among industry members, Rico Basson, managing director of Vinpro has been a very powerful voice, especially during the pandemic, while Michael Ratcliffe, who combines consultancy with his positions as managing partner of the Vilafonte estate and chairman of Stellenbosch Wine Routes and Visit Stellenbosch, also commands great respect within the industry. Finally, South Africa has an unusually strong wine education sector, with organisations like the Cape Wine Academy and Institute of Cape Wine Masters.

 

James Lawrence

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