A glass, my China?

A grow­ing taste for wine in Africa and Asia is a for SA’s ex­port mar­ket

CityPress - - Business - GER­RIT VAN ROOYEN busi­ness@city­press.co.za Per­cent­age growth in to­tal wine ex­ports in 2015

South African wine ex­porters are see­ing a mas­sive op­por­tu­nity in fast-grow­ing wine mar­kets like those in China and Africa. To­tal wine ex­ports to China and Mozam­bique in­creased last year by 30% and 110%, re­spec­tively. In con­trast, in 2015, the vol­ume of South Africa’s to­tal wine ex­ports fell by 1%, ac­cord­ing to data from the SA Wine In­dus­try In­for­ma­tion & Sys­tems NPC.

Last year’s lower ex­port vol­umes can be at­trib­uted in part to de­clines of more than 30% in some wealthy coun­tries such as Switzer­land and New Zealand.

Over the past decade, China’s to­tal wine con­sump­tion grew by more than 160% to 16 mil­lion hec­tolitres, ac­cord­ing to data from the In­ter­na­tional Or­gan­i­sa­tion of Vine and Wine.

Wine con­sump­tion in Africa is also grow­ing at more than 10% a year, ac­cord­ing to Bri­tish an­a­lysts of data on wine and spir­its.

China has a pop­u­la­tion of more than 1.36 bil­lion peo­ple, which of­fers an as­tro­nom­i­cal po­ten­tial for lo­cal wine pro­duc­ers, says Hein Koege­len­berg, CEO of wine es­tates La Motte and Leop­ard’s Leap.

The Chi­nese wine mar­ket is worth $15 bil­lion (R222.8 bil­lion) and has a lot of room to grow as China con­sumes five times less wine per per­son than South Africa does.

“South African wine rep­re­sents only 2% of China’s cur­rent wine im­ports,” said Koege­len­berg.

Thanks to a part­ner­ship with Chi­nese con­sumer goods com­pany Great China, his es­tates are re­spon­si­ble for up to a third of all South African wine ex­ported to China.

“China is a coun­try where wine pro­duc­ers can achieve good prices,” said Koege­len­berg.

He said that his wines in China were sold at an av­er­age price of $6 a bot­tle.

“As Chi­nese wine drinkers gain more wine knowl­edge, they will drink more and more ex­pen­sive over­seas wines,” said Koege­len­berg.

The Chi­nese are par­tic­u­larly fond of red wine, which rep­re­sents 90% of the to­tal Chi­nese wine mar­ket.

Red is con­sid­ered a lucky colour in China, while white is as­so­ci­ated with fu­ner­als.

Chuan Zhou, a se­nior re­searcher at Wine In­tel­li­gence, said mar­ket re­search showed that most Chi­nese be­lieved that red wine was good for one’s health.

The Chi­nese re­gard wine and Cham­pagne as fem­i­nine drinks, so wine was at­trac­tive to a new gen­er­a­tion of ed­u­cated, in­de­pen­dent young Chi­nese women, he said.

De­mand for wine in China had in the past been driven by Chi­nese peo­ple who were pur­su­ing so­cial sta­tus, but re­search shows that Chi­nese con­sumers were now more prag­matic than be­fore about their choice of wine, he said.

Koege­len­berg said wine sales were in­creas­ing among younger pro­fes­sional Chi­nese peo­ple, who pre­ferred to buy wine over the in­ter­net.

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