Wine exports down 17% in 2023

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JIMMY MOYAHA: We’re taking a look at wine exports. South Africa is a major wine exporter throughout the world, and our wines are some of the best consumed globally. It seems as though we didn’t have the best year last year. Helping me take a look at this is the communications manager at Wines of South Africa, Maryna Calow, to see what’s been happening and how these developments have affected the wine space in South Africa.

Good evening, Maryna. Thanks so much for taking the time. A 17% decline in export volumes for 2023 –  that’s steep. What were some of the driving factors behind these declines?

MARYNA CALOW: Good evening, Jimmy. Yes, it is steep. There were actually a number of factors that played a part in certain ways when we come to this decline.

We have to start by looking at the global economy. That really is one of the biggest factors that comes into play. And here we can really rest assured, knowing that we are not the only wine-producing country reporting negative figures. So it is a bigger-picture situation where our competitors – Argentina, Australia, and even those in Europe – are reporting these figures.

Consumption is going down; consumers are opting to pay a little more and drink a little less.

Where they would perhaps in the past have had two bottles of cheaper wine, they are kind of saving themselves for something a little more special and going for the one bottle when they do buy wine.

But then of course, on a more local level, we have to look at the situation at the port, which inevitably also affected our exporters to varying degrees.

These issues, of course, can [relate] to reliability concerns for us as an industry. And then just the general geopolitical situation that’s playing itself out in this world is also causing a lot of uncertainty in this regard.

JIMMY MOYAHA: Maryna, you touched on the port situation. I wonder – the role that Transnet and the inefficiencies that we’re seeing there have played in this space, has that been something that has really only crept up now in this last year? Or has it just been a problem that has escalated in the last year, which has been something the industry has had to contend with for a number of years?

MARYNA CALOW: I think it’s something that’s been coming a long way. We started to see the major issues in the port since even before Covid hit us. So it’s certainly something that has escalated, and it’s something that we as an industry have managed to negate for some time.

We have built in additional lead time when dealing with our importers in our export markets. And it’s kind of on a teetering point, on a teetering edge right now.

We as the industry are engaging excessively with these entities at the Cape Town port, with Transnet, and spending a lot of time to find workable ways around this issue. But while I say this, we have to remember this is not the sole issue affecting our exports. It is a contributing factor – let’s put it that way.

JIMMY MOYAHA: Maryna, you mentioned that we aren’t the only ones experiencing this in terms of producers or global wine exporters. Other countries like Argentina are going through something similar. How is our local market faring? Are we finding that tourists who come to, for example, Cape Town, as you’ve just mentioned, would then buy more wine to take back home with them? Or are you finding that local consumption is increasing to offset what we’re not exporting?

MARYNA CALOW: I wouldn’t say local consumption is increasing, but local consumption is certainly staying quite steady. It’s important to note that for the local consumer our producers will really turn to the local market as the first prize.

We are definitely seeing a change in terms of who is consuming wine in South Africa. It’s definitely a growing product, where in the past beer and spirits were more consumed locally.

But you touch on tourism – and I think this is such an important part of what we do here in the Cape Winelands.

Tourism is a massive money spinner for our producers, and many of especially the smaller enterprises rely heavily on wine tourism.

If you have ever travelled into any of our international competitors’ winelands, you will know for sure that the South African wine tourism offering is absolutely second to none.

So what we do with this is we create ambassadors, not so much for internationals coming here and taking wine back with them, but inevitably they return to their country of origin and look for South African wines on the shelves. They tell their friends, their families, their colleagues about South African wine – having experienced the best of the best that we have to offer here in the Cape Winelands.

So that really is a strong point, and I urge you to keep an eye out on February 1 when we release the latest figures from our wine-tourism survey that was done, which really highlights incredibly strong recovery and how important wine tourism is for us.

JIMMY MOYAHA: Maryna, on the positive side, even though we did see a decline in volumes, this was in part offset by a weakening rand. Do you think that this is a sustainable sort of offset, or is it a serious concern that the volume levels are decreasing and we’d want to just see if we get those back up before it becomes a critical problem at an export level?

MARYNA CALOW: I think from a volume perspective, the concern isn’t very big on our side. We have a stock situation at the moment that is quite favourable for us. We had a slightly smaller harvest in 2023 as well, which means that we are in a very comfortable position when it comes to stock.

It really feeds into the supply and demand situation where we can actually charge a little more for our wine because we are not sitting on a glut of wine like some of our competitors.

The rand per litre or dollar per litre value for our wine is really what’s very important. The sustainability from a financial perspective of our industry is what is absolutely paramount to the longevity and the growth of our industry in the long run. It has been something that has been a major concern for our industry. So this growth, despite the decline in volume, is really what is exciting for us.

JIMMY MOYAHA: Well, I look forward to reading that report on February 1 – and I might even be doing it from a wine farm, if I’m not mistaken.

We’ll leave it at that, Maryna. Thanks so much. That’s Maryne Calow, the communications manager at Wines of South Africa, providing us with an update on the wine exports being down 17% for the year 2023 but still showing optimism about the overall industry as a whole.