SouthAfrica.info (Johannesburg)

15 January 2014

South Africa: Record Year for South African Wine Exports

The South African wine industry topped its previous export record in 2013, with volumes sold reaching 525.7-million litres, a 26% increase on the previous high achieved in 2012, Wines of South Africa (Wosa) said in a statement on Monday.

Strong year-on-year growth occurred in established and newer markets.

Wosa's new CEO, Siobhan Thompson, attributed the dramatic growth to a bumper harvest that allowed South Africa to fill the gap created by a poor European harvest as well as to penetrate new markets.

Sales to the UK, still the country's biggest export destination, accounting for just over one-fifth of total export volumes last year, rose 21% to 111.2-million litres.

Volumes to Germany, where South Africa is the biggest "New World" supplier, increased by 24% to 96.5-million litres, while exports to Russia were up 18% to 37.3-million litres.

"It is encouraging that strong gains were achieved in the UK and Germany, our two biggest markets, where packaged wines in particular showed very healthy growth," Thompson said. "Packaged wines to the UK were up 31% and to Germany by 17%. At the same time, exports also grew across an increasingly broad range of other markets."

She said the substantial growth in Russian sales was partly the result of the shortfall in the European harvest, where in some cases yields were the lowest in 40 years.

"This was also the reason South African sales to wine-producing countries such as France, Italy and Spain increased so dramatically. However, we see as significant the impressive growth in high potential markets such as the US, where we are confident of achieving long-term growth."

Thompson said exports to the US, a market of fast-growing importance to the country, increased by 37%, buoyed by improved distribution and ongoing positive media exposure.

This included very favourable reviews in high-profile wine publications such as Wine Spectator and The Wine Advocate and among the very influential blogger fraternity. The US is currently the world's biggest market for wines.

Strong gains were also achieved in Denmark, where packaged sales were up by 21%, and good inroads were made in many of Africa's major economies as well as in Japan, Thailand and the United Arab Emirates.

Overall, white wine sales rose by almost 18%, and reds by 22%. Sauvignon blanc, Cabernet Sauvignon, Shiraz, Pinotage and Merlot saw the biggest increase in volumes exported.

"South Africa is increasingly perceived as the source of interesting, original and well-made wines, able to appeal to Americans eager to expand their repertoire," Thompson said. "This is a very good positioning from which to build our base, particularly as we target Millennials, who are especially eager to encounter new taste experiences."

She noted that the increase in bulk volumes of wines exported, from 59% in 2012 to 65% in 2013, was largely because of opportunistic buying on world markets prompted by the poor European harvest.

This situation was not unique to South Africa, she said, and had affected other New World wine-producing countries as well.

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