Western Cape Business 2018 edition

OVERVIEW
Grapes and wine
Exports are still strong despite the drought.
SECTOR INSIGHT
Cape Town wineries have created
their own label of origin.
• Grape exports to China
have been growing at 30%.
South African wine exports in 2016 earned a very healthy
R9-billion, nearly 10% up on the previous year’s earnings.
This increase notwithstanding, there are several areas where
South Africa is looking to increase its exports, not least the
BRICS countries, with China being a promising market for both wine
and grapes. Because China has changed its cold treatment protocol,
South Africa can now increase its exports to that country to R2.5-billion
within five years.
In 2015, 10 600 tons of table grapes were sold into China but the
figure could not be increased because of the cold treatment protocol
relating to the South Africa product, which affected quality, market
share and price. The Chinese market for table grapes has been growing
at 30% since 2000 and stands at about $600-million.
The Chenin Blanc Association of SA believes that the US is a ripe
market for its wines. Financial Mail reported in 2017 that South Africa’s
17 799ha of Chenin plantings is greater than the rest of the world combined,
and many of the vines are old, which creates better quality. SA
currently exports 11Ml/year into the US, a small fraction of the 920Ml/
year that that country imports.
In a recent development, wineries
in greater Cape Town now
have their own regional identity.
The likes of Groot and Klein
Constantia, Buitenverwacthing,
Diermersdal and Cape Point
Vineyards will from now on carry
the label “Wine of Origin Cape
Town”, linking them to one of
the best-known city brands in
the world.
The long-term drought afflicting
the Western Cape is having
an effect on the grape and wine
industry. It has been estimated
that a 5% lower vine production
rate results in a R175-million loss
to a farmer, with the broader value
chain losing something like
R525-million.
There is a move to try to shift
South Africa’s focus away from
bulk wine sales, to bottled wines.
The website beveragedaily.com
quoted the managing director
of Origin Wines stating that for
every 10-million litres of additional
wine bottled in South
Africa in 2016, additional direct
income of R200-million should
accrue to the Cape Winelands.
WESTERN CAPE BUSINESS 2018
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