Lonely at the top for SA’s most successful export brand

Thursday, 17 June, 2004
Jeanine Wardman
South Africa needs more brands in UK Top Twenty to help fight the competition and build the category.

The latest statistics from market research company, AC Nielsen firmly substantiate Kumala’s status as South Africa’s most successful brand in the United Kingdom.

Western Wines’s Kumala and the local Westcorp’s Namaqua are South Africa’s only contenders in the UK’s Top 20 Brands in both volume and value terms. Kumala claims the fourth and fifth positions and Namaqua the sixteenth and nineteenth positions in volume and value respectively.

These and other interesting figures were presented at the quarterly meeting of the Kumala Growers’ Club, hosted by Origin Wine and Western Wines in Stellenbosch last week.

Quality Control Director at Western Wines UK, Ed Adams MW said that though Kumala has ‘matured’ as a brand, 10% volume and value growth is expected in 2004. This converts to an annual distribution of 2,5 million cases (12 x 750ml).

James Reid, local Operations Director for Western Wines was cautiously optimistic in his interpretation of these figures for the Kumala Growers' Club and said: ‘We desperately need more big brands from South Africa in the Top 20 to fight the Californians and Australians and help build the category. It’s hard out there on our own’.

Both Adams and Reid commented that South Africa is still underperforming in value terms in this, the most demanding and by far the largest market for South African wines abroad. The average price point in the UK wine market is £3.68/bottle, while the average price for a bottle of South African wine is £3.58. According to Reid, Kumala’s average price point of £3.91 is a reflection of the brand’s favourable price positioning and consequent value growth.

Adams emphasized that the Kumala Reserve range, introduced in 2003 at £5+ price points will be the ‘key driver’ by which the brand is to be extended in 2004. Reid added that the Nielsen statistics indicate 17% growth in the £4.99+ sector and said that there are ‘huge’ opportunities in the market for premium wines in the UK.

South Africa’s lack of presence in the £5+ segment is, according to Adams, a serious limitation. ‘South Africa has lagged behind in this segment of the market for so long that exceptional value will have to be offered by any and all brands wanting to make an impact above £5’.

Reid concluded by mentioning some of Kumala’s recent successes in establishing distribution outside the United Kingdom. The brand is faring particularly well in Scandinavia and now sells 400 000 cases (12 x 750ml) in markets other than the UK.

The presentation was preceded by a tasting for members of the Kumala Growers’ Club, led by Ed Adams MW, of major Californian brands for sale in the UK. Adams concluded the tasting by saying: ‘There’s no question about it – South Africa gives the Californians a run for their money on quality, but one can’t argue with the prices these wines are offered at’.

Adams cited the Blossom Hill Merlot with a recommended retail price of £4.49 (50 pence less than 12 months ago because of the favourable exchange rate), which is sold mostly on promotion at £3.49 as a prime example of the value for money California is able to offer UK consumers presently. The line-up of wines included Blossom Hill, Corbett Canyon, Gallo’s Sierra Valley and Turning Leaf ranges and Kendall Jackson.

Written by: Jeanine Wardman
jeanine@wine.co.za

Contact: James Reid, Western Wines
Tel: +27 (0) 21 882-8177
Email: james@westernwines.co.za

Thys Greeff, Ed Adams, James Reid and Philip Jordaan at the Kumala Growers' Club meeting on 10 June.
Thys Greeff, Ed Adams, James Reid and Philip Jordaan at the Kumala Growers' Club meeting on 10 June.

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