Wines of South Africa Export Report 2023: Positive Value Growth, Despite Challenging Global Economy

The year 2023 will undoubtedly be remembered by the world’s wine fraternity as one of the most challenging.

This rings true in the context of South African wine exports as well, with volume declines of 17%, resulting in total export volumes of 306 million litres. The silver lining for South African producers can be seen in positive value growth of total exports to a respectable US$540 million (R10 billion), despite the volume decline.

Harvest 2023 saw production volumes decline by 14%, a scenario echoed by the OIV report which highlights smaller harvests globally for the year, however, the realities of excessive stocks in both northern and southern hemisphere producing countries, has had an adverse effect on pricing on the whole. This can especially be seen at the lower- and entry level segment of the wine markets where trading is particularly competitive and pricing within this commodity sector leading to a ripple effect throughout the value chain.

Despite these challenges, South African wines are still making waves internationally with continuous positive recognition from critics such as Tim Atkin, MW in his latest South African report and Anthony Mueller’s latest report on the Wine Advocate platform. It is this reputation for top quality wines that seem to be setting South African wines apart from many of our counterparts and fueling the positive premium growth trajectory.

“The consistent positive ratings and accolades achieved by South African wines has most certainly solidified our positioning in international markets. Quality remains our focus and the consistency that we have seen, along with viticultural improvements, embracing new technologies both in the vineyards and cellars, will allow for the continued upward trajectory in this regard. This is why buyers remain confident in their support of our wines,” comments Wines of South Africa CEO, Siobhan Thompson.
She adds, “Thanks to our unique terroir, our producers are known for making wines that are unique and representative of our rainbow nation.”

In addition to this, wine tourism in South Africa is projected to have further bolstered growth, adding to the overall sustainability of particularly the small and medium sized entities.
In an upcoming report following a wine tourism impact study (due for release on 1 February 2024), preliminary figures have shown exponential growth in numbers and turnover at cellar doors, with full recovery following the Covid pandemic. This growth can be accounted for by both local and international visitors to the Cape winelands.

South African white wine continues to win the popularity contest with Sauvignon Blanc leading the charge, followed by Chenin Blanc and Chardonnay. All three cultivars also showing solid value growth. On the red wine side of things, Shiraz takes the lead, closely followed by Pinotage and Cabernet Sauvignon.

Producers continue to face several localised challenges. One of the main issues is the ongoing infrastructure and equipment challenges at the Port of Cape Town, which has had a major impact on all products and commodities that are heavily reliant on this harbour.

Newly formed wine industry body, South Africa Wine, together with exporters, are continuously engaging with port authorities and have taken a proactive approach in finding ways to support producers in this regard. However, a long-term strategy needs to be implemented to truly negate and ultimately correct these challenges.

“Order fulfilment is key in the international wine business and we cannot allow delays due to a below-standard logistical performance to tarnish our reputation as a reliable supplier of quality wine,” says Christo Conradie, stakeholder engagement, market access and policy manager at South Africa Wine.

“Transnet (Port of Cape Town) is a crucial enabler to ensure we deliver on our global promise and we have the undertaking that Transnet will step up to the mark, focusing on the controllables via a collaborative effort. Notwithstanding some real logistical challenges, we are confident for the future and are committed to honouring all agreements.”

There is no doubt that 2024 will continue to see challenges for the South African, and indeed, the global wine industries as geopolitical pressures will continue to play a major role in the world economy. Despite this, South Africa and the South African wine industry remains open for business and the export of South African wine remains a major focus.

For more information, visit www.wosa.co.za

Wine News: Trade in Wine and Vine Products Continues to Raise

The first edition of the Vine and Wine World Trade Forum was held a few weeks ago in Dijon, France. It has revealed that international trade in wine and vine-related products has grown significantly over the past two decades.

The market has also become more diversified as consumer tastes have changed. While traditional winemaking economies, such as France, Italy and Spain, maintain their dominance in wine exports, “new world” winemakers, such as Australia, Chile and the United States, are also making major inroads. However, the share of China as an importer has declined following a period of growth, possibly due to global disruptions, such as the COVID-19 pandemic.

According to the World Trade Organization, International trade in wine and vine products, have almost tripled over the past two decades. Its value steadily rising from US$ 17.7 billion in 2000 to over US$ 50 billion in 2021 and 2022. Wine accounted for the majority of this trade (76 per cent in 2022), while the remaining 24 per cent consisted of fresh and dried grapes and grape juice.

The “old world” continues to dominate wine exports with France, Italy and Spain holding the top three positions in both value and volume. From the “new world,” Australia, Chile and the United States are the main suppliers in terms of value, although their shares in the international market remain smaller than those of the top three.

On the imports side the primary wine-importing countries include Germany, the United Kingdom and the United States. They are closely matched in terms of volume, but the United States takes a clear lead in value. A surge in China’s wine imports began in 2005 and peaked in 2017, but it has more than halved since then. This decline may be due to short-term disruptions, such as the COVID-19 pandemic, as well as longer-term structural shifts, such as increased domestic production and possible changes in consumer preferences.

For further stats and details: https://www.wto.org/english/blogs_e/data_blog_e/blog_dta_20oct23_e.htm

Source: World Trade Organization

Announcing Liz Palmer is Guest Speaker at the 7th UNWTO Global Conference on Wine Tourism

I’m so thrilled to have been invited as a guest speaker at the upcoming 7th UNWTO Global Conference on Wine Tourism!!

The topics for the 7th Edition include “Inclusive, Sustainable and Digital Wine Tourism: Building Stronger Territorial Cohesion”

This yearly conference has become a leading international forum on trends, tools and opportunities to advance global wine tourism. It also provides opportunities for experts and professionals, as well as consolidated and emerging destinations in this tourism segment to exchange knowledge and experiences.

Since 2016, the Conference has highlighted the importance of wine tourism to the socio-economic development of destinations and has served as a platform to exchange experiences, identify good practices and promote wine tourism as a tool for sustainable development.

The 7th UNWTO Global Conference on Wine Tourism will be held November 22 – 24 in Logroño, Spain. Participants include government officials from international and national tourism administrations and organizations, regional and local authorities, international and national destination marketing organizations, UNWTO affiliate members, private sector representatives, wine estates, infrastructure providers and international academia.

I believe everyone in the wine tourism industry can certainly attest to Massimo Garavaglia, Italian Minister of Tourism, statement at last year’s conference, in Alba Italy: “Wine tourism is much more than just selling wine, which clearly is important.  When you sell a bottle of wine, you are selling the territory behind that bottle, the culture of that territory, the history of the men (and women) who designed these landscapes with the rows of vines.”

I have the extreme privilege of sharing insights on the topic of:

Unlocking the Benefits of Digitalization
Digital transformation can revolutionize and enhance wine tourism experiences, provide data and insights, optimize marketing strategies, and foster sustainable growth.

Conference Link: https://www.unwto.org/7-UNWTO-Global-Conference-Wine-Tourism

Hope to see you there!

Liz Palmer

 

Research Findings: High-Power Ultrasound Improves the Quality of Spanish Rosé Wine

A recent study by Spanish researchers concluded that ultrasound improves wine quality by shortening maceration time.

In 2019, The International Organization of Vine and Wine (OIV) approved the use of ultrasound to favor the extraction of grape compounds, its application in obtaining superior quality red wines has been widely studied.

Spanish researchers have turned their attention to rosé, a booming market that has experienced strong growth over the past 15 years. A research team from the University of Castilla-La Mancha, and the University of Murcia in Spain used high-powered ultrasound technology to treat crushed Monastrell grapes, a process known as sonication. They compared the resulting rosé with the wine obtained after a four-hour maceration period.

The research team described the improvements in color and sensory profile of the sonicated wine compared to the macerated sample, here are their findings: https://onlinelibrary.wiley.com/doi/10.1002/jsfa.12757

Professor Encarna Gómez Plaza, from the University of Murcia explained the importance of the research for the wine industry. He stated that “the ultrasonic application was primarily designed to reduce maceration time in red wine vinification. However, experiments with white wines have shown that the aromatic fraction can be increased by sonicating crushed grapes. Therefore, we decided to study the effect of ultrasound on rosé wines, something that had not been done before.”

Prolonged maceration can cause oxidation of certain compounds in the wine, leading to a bitter taste and other undesirable effects.. This is where ultrasounds come in. Ultrasonic sonication causes the cells in the skin of the grape to rupture, allowing the desirable compounds to be extracted in a significantly shorter steeping time, thus reducing the adverse effects of oxidation.

Sensory analysis of the wines by a panel revealed that the ultrasonic rosé had superior aromas

“Sonication resulted in wines with intense aromas of red fruits and flowers, with higher scores than wines from macerated grapes,” the authors note.

Analysis of the chemical composition supported this claim: ultrasonication improved the extraction of several volatile aroma-enhancing compounds, such as terpenes, which can give off a floral or citrus fragrance.

The team hopes that this study will draw attention to the potential of ultrasonic technology to produce high-quality rosé wines. Now they are studying other applications of high-power ultrasound in the wine industry.

WineGB Releases its 2023 Industry Report

Last week Wine GB released its 2023 Industry Report, which includes the latest data from producers and figures supplied by Wine Standards.

Here are some key findings:

  • Plantings continue to grow – there are currently just under 4,000ha under vine, with forecasts predicting an increase to 7,600ha by 2032;
  • In terms of production, the mid-range prediction is that production will reach 25 to 29 million bottles by 2032;
  • Wine remains one of the fastest-growing agricultural sectors in Britain;
  • In 2022, total production was 12.2 million bottles: 68% sparkling, and 32% still;
  • Sales channels and distribution in 2022 include:
  • On trade has increased– 22% (from 14%)
  • Exports up from 4% to 7%
  • Off-trade up to 41%
  • DTC now 30% from 57% – this reflects post-pandemic sales returning to hospitality and retail.

Wine Tourism

Wine tourism is buoyant and shows a positive growth trajectory; income is up – now averages 24% of total revenue. Visitor numbers are up 17% from 2021.

Ned Awty, Interim WineGB CEO says: “We are used to seeing rapid growth of plantings and production and this year is no different, with plantings up 74% in five years and a production of 12.2mn bottles, almost a record! Thanks to an overwhelming response to our membership survey, we now have our most comprehensive data set ever for wine production in the UK. The data gives us new insights into the ever-increasing importance of wine tourism, the scale and diversity of employment in our sector and an in-depth view of sales channels from the largest to smallest producers.”

Chair of WineGB, Sam Linter, said: “These truly are exciting times for English and Welsh wine. Our latest report is from the most robust data yet and we are pleased to have this access. It not only sets out where we are today but looks ahead to the next ten years in terms of production and the many opportunities. We have become an internationally acclaimed wine growing region of the highest quality.”

The industry report is available Industry & Statistics Insights

Sources:
WineGB and Wine Standards