South African wine exports holds steady in turbulent times

Monday, 27 January, 2025
Wines of South Africa
The Wines of South Africa Export Report 2024 reflects modest value growth in 2024.

South Africa's wine export sector had weathered a steadily contracting global wine market to reflect modest value growth in 2024, said Wines of South Africa (WoSA) CEO Siobhan Thompson. She confirmed that year-on-year, total export sales, comprising packaged and bulk wines, rose 4% in US$ value to US$562m on virtually unchanged volumes of 306,2m litres.

Packaged wine sales increased 4% in value to US$430m, on 123,4m litres (+5%), while bulk sales grew 6% to US$132m on lower volumes of 182.8m litres (-3%).

There has been an ongoing decline in global wine consumption in recent years, dropping some 10% between 2008 and 2023, according to the International Organisation of Vine and Wine (OIV). Per capita consumption in the UK, South Africa’s biggest market, peaked in 2009. In the US, the world’s biggest wine market by value, per capita consumption has declined since 2017.

As in other markets, these decreases had been further exacerbated over the past year in an environment of mounting geopolitical tensions, with inflation continuing to erode the disposable income of wine lovers.

The growth in South Africa’s packaged wines, critical to reputational enhancement, had been very encouraging as evidenced in several key focus markets, such as the Netherlands, Canada and Japan, and in Africa, led by Tanzania, Zambia, Ghana and Mozambique.

Good cultivar-led growth in the bulk market had come from Chardonnay, Sauvignon Blanc, Chenin Blanc, Shiraz, Pinotage and Merlot were among the standout performers within the sector. Historically, the ‘dry white’ or ‘dry red’ categories had been the biggest contributors to bulk sales. “Still, we see the search for specific varieties over generic red or white as a move towards greater discernment in demand with the potential to attract better prices.”

“There is no denying that many South African producers have been knocked by the shrinking global wine market. Some wines at the higher end of the spectrum with offerings strategically tailored to their specific markets, backed by strong distribution and regular in-market visits, have flourished. Progressive, adaptable producers creating fresh, vibrant, finessed wines and those with a strong brand offering have also reported positively", comments Thompson.

Rico Basson, CEO of South Africa Wine, highlighted the resilience and resourcefulness of the export sector. “The ability to stay on course despite the ongoing headwinds that has strained the financial performance should not be underestimated. The South African wine sector has experienced two consecutive small harvests coupled with structural downward adjustments in both the national vineyard and total production. Still, we are planting wiser, enhancing our climate resilience, introducing more drought-resistant varieties.

“The industry has an optimal stock-to-sales ratio as we move into the 2025 harvest. This bodes well for both the domestic (60% of volume) and export (40% of volume) markets. We continue to be celebrated for quality. There’s a lot to be proud of.”

Thompson said WoSA was excited to be participating in international events this year, such as ProWein, and would once again be hosting its premier showcase, CapeWine, from September 10 to 12 to international trade and media. “There’s huge interest in our category, given the range and excellent value across all our price points. We are also confident that Cape Town’s crowning as the world’s best city by Time Out in January and the 2024 Condé Nast Traveller’s title of Best Food City awarded late last year will generate even greater tourism and, therefore, trade interest in the Cape Winelands.”

She concluded that given the likely continued austerity in consumer spending and the potential impact of any tariff wars that could play out this year, it was difficult to project how exports would fare. “Nevertheless, we are well-prepared, with a compelling, appetising array of offerings to bring to market.”