Africa, Asia Replace N. America As Most Important SA Wine Markets

Written by Dana Sanchez

Africa and Asia have replaced North America and the European Union as the two most important growth market areas for South African wine in the short-to-medium term, according to a new PwC report.

Global forces are impacting South Africa’s wine industry. These include changes in demographics, climate change, resource scarcity, technological advances, accelerating urbanization and shifts in economic power, said Frans Weilbach, PwC Agribusiness Industry leader for Africa, in a Cape Business News report.

Just generally, 2015 has been an exceptional year for South African wine, according to IndependentOnline. The grape harvest was early but the quality was excellent.

Along with other sub-Saharan African countries, South Africa is enduring one of the worst droughts in decades.

No one knows how badly the drought will affect the country’s wine industry in 2016, but there are some things to be positive about, according to PwC’s “South African Wine Industry: Insights Survey 2015,” Cape Business News reports.

South African wines had a particularly good year in China in 2015, with commentators describing the country’s wines as the surprise of the year, IOL reported.

In the first half of 2015, South Africa doubled its Chinese market share from 2 percent to 4 percent in volume, Chinese customs statistics showed, according to an earlier AFKInsider report.

China is South Africa’s sixth-largest export market for packaged wines by volume, and the largest in Asia, accounting for around 8.99 million liters for the year ending September 2015.

South Africa’s top wine markets in 2014 were U.K., Germany, Russia, Sweden and France, MoneyWeb reported. The past 10 years saw a marked increased in exports, up by nearly 58 percent, according to VinPro, which represents more than 3,000 wine producers and cellars.

Export wise, South Africa has extended its reach and become more popular in less traditional markets like China, MoneyWeb reported. Wines of South Africa recently opened Asian offices in Hong Kong.

“It remains to be seen what the impact of the drought and changing weather patterns will be on the 2016 wine grape harvest,” Weilbach said. “Currently, South Africa is in the grip of one of the worst droughts in 20 years, which is expected to place significant pressure on food price inflation in the coming months.”

South African wine business and industry leaders say Africa and Asia have replaced North America and the E.U. as the two geographical areas most important for growth in the short-to-medium term, according to the PwC report.

South African wine CEOs say there’s growth in existing markets and the development of new markets locally and internationally.

“The wine industry will have to ensure that it understands consumer segmentation and demographics in order to tap into the global market opportunity,” Weilbach said.