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Is South Africa’s Wine Industry Overlooking The Africa Market?

Is South Africa’s Wine Industry Overlooking The Africa Market?

South African wineries are overlooking opportunities elsewhere on the continent where there’s a huge and growing demand for alcoholic beverages as the population becomes more affluent, according to a blog in BlouinNews.

Whitey Basson, CEO of Shoprite, said in 2013 that its seven stores in Nigeria sold more of the French-made Moët & Chandon champagne than all of the group’s liquor stores in South Africa combined. A retail and fast food company, Shoprite has more than 1,200 corporate and 270 franchise outlets in 16 countries across Africa.

France is a major wine exporter to Africa, yet South African wine reaches just a tiny portion of the external African market, BlouinNews reports.

Craig Irving is CEO of Cape Town-based Consumer Insight Agency, an ethnographic consumer research company. A phenomenal amount of alcohol is sold on the continent, but all the wine consumed in DRC’s capital of Kinshasa is French, Irving said.

Irving called on South African winemakers to expand their presence in the informal outlets where most African consumers purchase alcohol. “Unilever does it, Diageo does it, Heineken does it, Johnson & Johnson does it. So why can’t the South African wine industry do it? And why do you allow the French wine industry to beat you to the African continent?” he said, according to BlouinNews.

The wines would have to be adapted to the distinct cultures, but labels, packaging, and marketing can be adjusted fairly easily, according to the report.

Being in Africa gives South African winemakers a geographical advantage for reduced shipping costs to other African markets compare to France and other top exporters, helping to offset the lower sales prices, according to the report.

South Africa’s wine industry has the potential to create 100,000 new jobs over the next 10 years provided it remains stable, according VinPro, the organization that represents the interests of wine producers, BDLive reports in a video.

The wine industry could be threatened by land reforms, according to Alan Winde, a member of the Western Cape executive council on economic opportunities.

Policies that discourage investment in the broader agricultural sector could threaten future prospects for wine makers, he said.

Almost 100,000 hectares ( 247,000 acres) of vineyards are bring cultivated in South Africa. They produce about 3 percent of the world’s wine output.

South Africa is the world’s eighth-largest wine exporter by volume. In 2013 the country’s wine industry provided jobs for 290,000 people directly and indirectly, according to blouinnews.