After a record-breaking end to 2024, South Africa’s wine industry entered the new year with noticeably less momentum. According to Vinimark’s latest Market Review, presented by head of insights and business advisory Oelof Weideman, the first quarter has been challenging. ‘We’re seeing the impact of low consumer confidence play out in real time,’ he explains.
The country’s Consumer Confidence Index, which reflects the level of optimism or pessimism among consumers regarding the economy and their personal financial situations, plunged from -6 at the end of 2024 to –20 in the first quarter of 2025, the lowest it’s been in years. ‘That number isn’t just data,’ Weideman stresses. ‘It tells us how South Africans are feeling. Right now, they’re worried. And when sentiment drops, so does spending.’
This lack of confidence persists despite macroeconomic signals showing slight improvement: the Consumer Price Index (CPI), which measures the average change over time in the prices paid by consumers for a basket of goods and services, reflecting the cost of living for households in South Africa, has dropped to 2.7%, which is below the Reserve Bank’s target range; food inflation is low at 2.5% (despite having risen 0.2% since February); and gross domestic product (GDP), which measures the total value of goods and services produced within a country’s borders and is a key indicator of its economic output, is showing marginal growth at 0.6%. But those green shoots haven’t reached household level, the job market remains strained, and wine is under pressure.
In value terms, wine sales declined 2.6% year-on-year in the first quarter of 2025. The drop in volume is even more pronounced, with 750ml still wine falling nearly 5%. As Weideman notes, ‘For the first three months of the year, wine was South Africa’s worst-performing liquor category.’
There has been an increase in shopping frequency, with consumers now visiting stores 4.8 times per month, up from 4.4. That could signal greater willingness to explore deals and try new brands, but it doesn’t necessarily mean they’re spending more. ‘More trips don’t mean more money,’ Weideman confirms; by contrast, he says, they mean ‘more price sensitivity and higher expectations’.
Larger-format bottles like one-litre wines are gaining traction, while stock keeping units (SKUs, which retailers use to keep track of stock internally) priced under R50 are also on the rise, offering affordability without complexity. On the other hand, 4th Street’s recent price hike on its 5-litre bag-in-box wines (up 13%), paired with reduced promotional activity, has led to notable volume losses. ‘We had hoped that value-led brands like Raindance Wines would absorb those consumers,’ Weideman says. ‘Unfortunately, it doesn’t look like that’s happening, and instead the 4th Street consumer is simply moving out of the wine category.’
As wine prices move from double into triple digits, there’s often a noticeable impact, slower sell-through, deeper discounting and a heavier reliance on promotions to maintain momentum. This trend is reflected more broadly across the market: the sub-R80 segment, historically the engine room of the category, has declined by 6.4%. The only tier showing any real movement is that between R100 and R200, and even there, growth is a modest 1.2%.
When it comes to varietals, Chenin Blanc and Chardonnay continue to show small gains (+1.8% and +0.9%, respectively), but Rosé, Shiraz, Sauvignon Blanc and white blends have all declined, as have Merlot, Cabernet and Pinotage. And red blends have dipped below the 10-million-litre mark, a first in Weideman’s experience.
Retailers are also feeling the pressure. While SKU proliferation continues, only 5.5% of products are generating 80% of total wine sales. ‘When consumers feel overwhelmed by too much choice, they default to what they know,’ says Weideman. That makes range rationalisation and smart shelf strategy more important than ever.
Chateau Del Rei’s canned sparkling wine continues to outperform, but, says Weideman, it’s probably competing more with FABs (flavoured alcoholic beverages) spirit coolers, a category that’s showing growth, than with the wine or sparkling wine category. ‘And,’ he adds, ‘it’s not clear if consumers are buying it because it’s a sparkling wine product, or just for the high alcohol content, high sugar content and affordability, none of which speak to the wine consumer.’
Premiumisation is an encouraging trend, albeit mostly in the on trade. While people are going out less often, when they do, they’re more likely to order a better bottle. It’s no longer about quantity; it’s about making the occasion count.
It seems that the producers and retailers who will come out ahead this year are those who can protect their brand value while remaining sharply in tune with the realities on the ground, with the right pricing and the right messaging at the right time.
‘The start of 2025 has been sobering,’ Weideman concludes, ‘but South African wine has always shown resilience in the face of challenge.’
For more insights and data, visit www.vinimark.co.za.