No one can deny the ever-changing complexities of farming. These have only increased over the past few decades, making the management of agricultural enterprises harder and outcomes almost impossible to accurately predict. On the other hand, all these changes have created a world of opportunities through better management structures, and technological and scientific advances to increase profits. An added bonus is sustainability through diversification and the added value of products. One of these diversification options is organic farming– it has gained popularity over the past two decades, making it impossible to ignore the possibilities it offers.
For most of human history farming has, by default, been organic due to the lack of available tools for intervention in the agricultural process. Producers were forced to farm within the natural constraints of their farms which severely limited their output potential and what they were able to produce. But thanks to technological developments and other advances change was inevitable.
For some consumers, organic produce is a necessary means to an end – by choosing organic food they can have more control over their bodies and health. The wine industry is not exempt from the trend. Organic agriculture presents an opportunity for South African wine producers to add value to their products and for new market segments to increase their profits. But is this a viable option in terms of sustainability?
Although several local wine businesses have introduced organic production methods, the high certification costs and strict (and sometimes arbitrary) regulations discourage many producers from obtaining official certification, making the size and impact of organic wine grape production hard to measure in South Africa. The current figures indicate there are about 900 ha to 1000 ha locally certified organic vineyards.
Unfortunately, the demand for organic wine in South Africa is fairly limited. Socioeconomic factors can’t be ignored in a country that only dreams of a First World existence. With 72% of wine produced in South Africa still being sold for below R50 a litre, it means organic wines, with their lower yields and increased costs, have a very small market to play in. The sad truth is that most South Africans don’t have the luxury to be concerned about the production methods used for their food and wine. While the “haves” can afford to shop organic, the “have-nots” don’t have that luxury.
But what about internationally?
With a small and constrained local market the sustainable size of the South African organic wine production is determined by international markets and trends. The global organic wine industry was worth US$7 460.29 million in 2019 and is projected to reach US$16 647.81 million by 2027, with an estimated year-on-year growth rate of 10.7% for the period 2020 to 2027. Despite being projected to grow in value up to 6.6% year on year for the period 2021 to 2028, the wine industry has lost more than half its market share over the past 55 years and seen an overall decline in per capita consumption of alcoholic beverages.
Global organic wine share was 2.4% in 2017. So, although it’s still a niche market it’s not insignificant and quite attractive in a competitive market such as the global wine industry. Organic might be the way to go if your target market has disposable income to choose it.
South African wine export markets are highly concentrated, with the 10 biggest export countries accounting for 82% of the total South African export volume of almost 318 million litres in 2020 and the five biggest export countries accounting for 64% of exports.
Research conducted by Schäufele & Hamm (2018) studied various wines of origin and how customers react differently to organic wines depending on their origin. They found German customers are willing to pay a much higher premium, up to 22.52% more, for German organic wine compared with only 4.4% more for South African organic wine in the under €3per bottle wine segment. They also found that the price premium almost completely disappears in the segment for more than €5per bottle and starts counting as a penalty for the product in the premium wine segments.
There’s a small window of opportunity for South African organic wine producers, but with France, Spain and Italy’s organically farmed vineyard hectares hovering at about 20% of total vineyards each, it means that each of these countries has more organically certified vineyards than South Africa has vineyards planted in total. There are concerns about market saturation and we’re seeing pushback from EU producers to protect their local markets from third-party producers such as South Africa.
Customers are also still confused about the difference between “natural” and “organic” products, with many consumers using these terms interchangeably. There are over 400 “sustainability” certifications, depending on your product. No matter what your shortfalls are in attaining environmental or social sustainability, there’s almost certainly a certification you’ll qualify for. This is widely known as “greenwashing” and is currently one of the big issues that the wine sector is struggling with when trying to promote “greener” production methods. Green washing has caused growing distrust among consumers and there’s already a backlash.
Dr Yann Raineau of the INRAE found that when consumers were informed that organic wine does not equate to zero sulphur it had a fundamental negative impact on their perception and willingness to pay more for organic wine as they felt they had been lied to. This shows organic wines’ biggest strength and weakness are authenticity and public trust in the system.
Due to the intricacies of how we interact with the environment and how wildly these interactions differ among farming systems, standardised certifications are basically useless and highlight the challenges faced by South African organic producers. The regulations are setup for European and American vine production, making it difficult to produce wine sustainably under South African conditions.
We must be careful that organic agriculture is not used as a smokescreen for big multinationals to greenwash their practices. Once consumer trust is lost, the organic wine market will be dead in the water despite all the good intentions to produce a sustainable wine.
Organic wine production should not be seen as a goal, but rather a steppingstone for a more sustainable future. Our wine is not great because it’s organically produced, we make great wine that just happens to be organically produced. In these uncertain times it’s hard to tell what is right or wrong. For now, organic is a friend (for some a mere acquaintance). But we need to tread lightly – it might become a fad that derails the future of sustainable wine production.
*Petri de Beer, until recently senior winemaker at Longridge Winery near Somerset West, is the runner-up SA New Wine Writer of the Year, a competition presented by the South African National Wine Show Association (SANWSA) and open for people aged 35 or younger.