22 April 2014

South Africa: New Buyers 'Impressed With SA Wines'

South Africa's competitively priced wine is attracting new buyers, who are impressed by the quality of the wines, a recent report by Rabobank found.

Rabobank, a global financial services company which published its latest quarterly report on the international wine industry on 14 April, says that both bulk and bottled wine exports from South Africa enjoyed strong growth in 2013.

Rabobank analysts say the weak rand, coupled with rising bulk wine prices in other wine-producing regions, made South Africa wine more competitive and attracted new buyers "who were impressed by the quality they found".

According to the report, exports of South African bulk wine rose in 2013 by 37.6%, outpacing bottled wine growth. Bulk sales - wine sold before it is bottled or bagged - now account for 65% of South Africa's wine exports. Overall, exports increased 26% in 2013, the report said.

Strategic success

Bulk wine now makes up half of all New World exports, Rabobank said in an international trade update. "Although bulk wine has clearly taken share from bottled exports, the recent data from South Africa suggests that the two segments can co- exist and find success when they follow clearly differentiated strategies."

"Success going forward for bulk wine producers requires extreme production and logistics efficiency," said Rabobank analyst Stephen Rannekleiv. "The recent large harvest in Spain has made the bulk market more competitive again and South Africa wine will have to seek new alternative markets to maintain growth.

"By contrast, success as a bottled wine exporter is becoming more limited to those companies with the ability to build strong brands. For bottled wine exporters, a deeper understanding of the target consumer and what drives purchase beyond price will be key," Rannekleiv said.

 - SAinfo reporter and Rabobank

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