Coming out of one of the direst droughts southern Africa has seen, with expectations to move on to greener pastures, the year that many anticipated to be one of their bests, speedily deflated to a record low.
Businesses categorised as non-essential had to send staff home, either with unpaid leave or worse, no prospects of returning to their desks after April.
Four months into 2020 and having stepped over the 1 million threshold of confirmed Coronavirus cases worldwide, it’s no news that SAs wine sector is dangling at the edge of an uncertain fate.
Since making the move to Cape Town nine years ago, my love for our country’s wine has grown exponentially. And so has my curiosity of its reach beyond our borders. Trying to get to grips with SAs post COVID-19 direction, I spoke with Francois Bezuidenhout, a longstanding Cape Wine Master, winemaker, and skilled spirits and wine marketing analyst.
Having survived the knock of the recent drought, it’s a given that many producers have seen the ripple effects in their harvests. Now, while production continues (SA farmers are considered an essential service and therefore exempted from the lockdown), trade is at a standstill, not giving further relief to the post-drought recovery. But Bezuidenhout believes that halting production can cause producers to experience an even greater loss.
The COVID-19 Ripple Effect for SA Wine
“When this year’s wines are geared to be ready in May or later, it’s unlikely that SAs current lockdown will have a significant impact on the harvest immediately,” says Bezuidenhout. “But while sales activities including wine tasting venues, wine shows, events, and day-to-day wine sales are banned, we won’t be picking the fruits of our labour anytime soon.”
According to Bezuidenhout, the 2020 harvest promises to be at least the same or slightly higher than 2019 in terms of yield. Producer wineries have seen a rise in bulk stock and with the red light given for trade, the over-supply can become problematic.
Bezuidenhout foresees international trade’s over-supply to put downward pressure on bulk wine prices for the local producer. “We can hope that in the year’s third and fourth quarters we will see a significant demand for wine as the blow of COVID-19 regulations softens and global markets stabilise. Only time will tell,” adds Bezuidenhout.
The Forecast for Exports
SA has forged good bonds with palates abroad. For many international wine drinkers, SA has become a favourite wine region. Yet, other countries’ lockdown regulations are urging wine buyers to keep things inhouse. “Wine sales are now being hampered across the globe,” says Bezuidenhout. “For China, however, it’s clear they are fast recovering from the economic setbacks their country has recently seen during the COVID-19 pandemic. It can be a good place to refocus our exports, although we need to patiently outwait our own recovery period before that can happen. On the bright side, this still gives SA producers the opportunity to discover new export territories if they have not ventured into the East as yet.”
Daily fluctuations in international developments and those on our home ground are becoming a regular feature, but South Africans remain resilient and so is our business savviness. Our wine industry comes with years to a century’s experience of highs and lows. It’s adaptable, or at least, it’s people are. How we learn to reshuffle the chess matt to reposition ourselves for an even more resilient future, may just set us up for more promising outcomes.
Francois Bezuidenhout’s track record of 15 years’ experience lies in his profile as Cape Wine Master (2014), and winemaker and founder of Leenders Wines which operates under Bezuidenhout Family Wines. He has also co-founded Pimville Gin. He holds a BSC degree in Agriculture (2005).