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South African wine exporters are seeing a massive opportunity in fast-growing wine markets like those in China and Africa.
Total wine exports to China and Mozambique increased last year by 30% and 110%, respectively.
In contrast, in 2015, the volume of South Africa’s total wine exports fell by 1%, according to data from the SA Wine Industry Information & Systems NPC.
Last year’s lower export volumes can be attributed in part to declines of more than 30% in some wealthy countries such as Switzerland and New Zealand.
Over the past decade, China’s total wine consumption grew by more than 160% to 16 million hectolitres, according to data from the International Organisation of Vine and Wine.
Wine consumption in Africa is also growing at more than 10% a year, according to British analysts of data on wine and spirits.
China has a population of more than 1.36 billion people, which offers an astronomical potential for local wine producers, says Hein Koegelenberg, CEO of wine estates La Motte and Leopard’s Leap.
The Chinese wine market is worth $15 billion (R222.8 billion) and has a lot of room to grow as China consumes five times less wine per person than South Africa does.
“South African wine represents only 2% of China’s current wine imports,” said Koegelenberg.
Thanks to a partnership with Chinese consumer goods company Great China, his estates are responsible for up to a third of all South African wine exported to China.
“China is a country where wine producers can achieve good prices,” said Koegelenberg.
He said that his wines in China were sold at an average price of $6 a bottle.
“As Chinese wine drinkers gain more wine knowledge, they will drink more and more expensive overseas wines,” said Koegelenberg.
The Chinese are particularly fond of red wine, which represents 90% of the total Chinese wine market.
Red is considered a lucky colour in China, while white is associated with funerals.
Chuan Zhou, a senior researcher at Wine Intelligence, said market research showed that most Chinese believed that red wine was good for one’s health.
The Chinese regard wine and Champagne as feminine drinks, so wine was attractive to a new generation of educated, independent young Chinese women, he said.
Demand for wine in China had in the past been driven by Chinese people who were pursuing social status, but research shows that Chinese consumers were now more pragmatic than before about their choice of wine, he said.
Koegelenberg said wine sales were increasing among younger professional Chinese people, who preferred to buy wine over the internet.
“There are good opportunities to sell wine on sites like Alibaba and JD.com, the two largest e-commerce companies in China,” he said.
Alan Winde, Western Cape economic opportunities MEC, said one of the goals of Project Khulisa, the Western Cape provincial government’s growth plan, was to double local wine exports to Angola and China.
“We are working with VinPro [a local wine farmers’ group] and Wines of SA [a marketing body for South African wine exports] to give wine producers market access to these countries by, for example, helping them to get to the major wine shows,” said Winde.
