Trends shaping the South African wine industry

It is still uncertain whether wine trends that emerged during the COVID-19 pandemic will be permanent or not.

Speaking during a recent Vinimark webinar titled Reflections on 2021 & 2022 market predictions, UK wine strategist and marketing expert Sophie Jump said the trend towards e-commerce would probably continue as it was in line with international social networking trends, and also offered accessibility and convenience.

However, she doubted whether the “premiumisation” trend, reported in the US, where price-per-bottle spend had increased by 15%, would remain.

“There’s a lot of talk about the premiumisation trend, but the UK is one of the tightest and stingiest markets globally. Prices here have averaged around £6 [about R125] per bottle for many years, with most of this going to taxes and import duties.”

Jump added, however, that people had probably spent more money on wine when they were unable to go out due to the closure of restaurants and pubs.

“To me, the trend has more to do with the quality of the wine than its price, which is also why there’s such a big buzz about South African wine. It offers not only extraordinary quality, but good value for money.”

While regionalisation is becoming increasingly important, Jump advised South Africans not to overcomplicate things.

“We know there’s a lot of regional variation and diversity in South Africa, but most wine consumers don’t know or care about the difference between these regions. The reality is that people revert to what they know best in the face of excessive choice.”

She added that the same applied to wine promotions. “People are no longer influenced by big corporates and institutions, but by the power of the individual. Big corporates therefore have to ensure their products and what they stand for resonate well with individuals. There’s no excuse for producing [poor-quality] wine these days.”

The global glass shortage was also accelerating the shift from bottled to alternative wine packaging. Rico Basson, executive director of Vinpro, said the bottle shortage, in combination with pressure on dispensable income and increased convenience, had resulted in sales of boxed wine overtaking sales of bottled wine locally.

Jump added that ‘bag-in-box’ was probably where global wine consumption was heading because of rising concern over climate change.

“We’re getting back to where we were with the screw-cap-versus-cork debate, where we had to dispel the association of screw caps with inferior-quality wine. The wine industry also needs to address the notion that ‘bag-in-box’ is associated with inferior-quality wine and emphasise that it’s much better for the environment.”