A Wine Tour of South Africa Part 1: The Nuts and Bolts

Lawrence OBrien — Wed, 04 Feb 2009 10:32:00 GMT

I wish I could time travel with knowledge of the current economic environment and recently attained knowledge of South African wine. I would return to 2004 with a solid business plan, assemble a pile of venture capital and form a importing company focused on South African (SA) wine. I would also need a massive injection of entrepreneurial courage as I was born without that gene.

South African wine has struggled to achieve notoriety and sales success in the United States (US). Currently a mere 1M cases of South African wine are imported into the US. That ranks the US 7th in SA wine exports behind, among others, Denmark and Canada! What gives? The US wine market is poised to be the largest in the world by 2012. SA wines offer incredible value. These facts just do not sum properly. There are several variables conspiring against growth of SA wines in the US.

In general SA's best wine producers are quite small. I am well aware of the large, corporate, cooperative companies. DGB, Distell, KWV, Constellation (I am a proud employee of Constellation) and several others produce the lion's share of SA wine. Within these portfolios one can find a wide array of wines from ordinary to extraordinary. Further, the size and scope of these companies perfectly suits the continuously consolidating US import and distribution network and this network influences, some would say controls, what is available to the US wine consumer. The largest and most influential importers and distributors have little interest in SA artisans that produce on average less than 8K cases of wine. Unfortunately these artisans are left with few alternatives for opportunity in the US. Cape Classics, Southern Starz, Boutique Wine Collection, Fairest Cape and Vineyard Brands all do incredible work representing SA's smaller scale producers and their capabilities are stretched to the maximum. Yet I met at least 2 dozen top notch wineries in search of US representation and I am sure this represents only a small percentage of those seeking a chance in the US.

Additionally SA needs a wine identity. This issue does not present remotely as much complexity as the importer distributor discussion. After all, how much New Zealand Sauvignon Blanc, Argentine Malbec or Oregon Pinot Noir was sold in this country just 10 years ago? Given the quality and diversity of Chenin Blanc wines I recently encountered, I am positive this grape can become SA 's champion in the US. It will not be easy but the successes of the wines previously mentioned certainly provide a clear template to follow. The SA wine industry must link arms, legs and shoulders just as their Spring Bok rugby team does in a scrum. They must attack with a single voice and a single mission. Once they establish a Chenin Blanc foundation why not a Pinotage or Syrah expansion? Again I ask how much NZ Pinot Noir was sold in the US just 5 years ago?

Coming soon...Part 2 The Cape Doctor, Table Mountain Sandstone and Biodiversity

Larry O'Brien

A Wine Tour of South Africa Part 1: The Nuts and Bolts