Following on the heels of 2019’s drought and a five-week long export ban due to Covi-19, South Africa’s wine exports miraculously defied expectation and registered growths for both value and volume in what was called one of the most challenging years for South African wine industry, according to the latest data released by Wines of South Africa.
The overall value of South African wine exports increased by 7.7% to R 9.1 billion (US$611.2 million) in 2020, of which packaged wine exports grew by 8.3%. In volume terms, exports hit 320 million liters, according to the wine association.
The much-welcomed growth came despite South African government’s five-week long export ban and domestic alcohol sales ban in a desperate move to contain Covid-19 spread. These measures severely compounded woes for South African wineries and merchants, especially coming off from 2019 when most were affected to various degrees by drought.
The UK remains its biggest export market, which saw R2.1 billion worth of South African wines shipped to the country in 2020, up by 23% in value and 7% by volume over the previous year.
China ranked as its 10th biggest export market, with R288 million wines exported, a year-on-year drop of 15%. Exports to Hong Kong on the other hand grew 2.6% in volume and 16.5% by value compared with a year ago. Interest for South African wines seems to be on the rise, as the city adds six new importers specializing in the wine category, according to its Hong Kong-based representative Tersina Shieh.
Premium segment
The association says it is heartening to see continued growth in the premium segment with wines over the R40 per liter price point growing steadily in value and volume, despite a drop in volume at lower price points for 2020.
While still a relatively small volume segment for South Africa, the super-premium segment showed growth of 37% in volume. This growth in the higher tiers highlights the work that Wines of South Africa (WoSA) has been doing to promote quality wines at higher price points.
Bulk wine has also seen positive trading with value increasing 5% to R1.9 billion and volume increasing by 3.7% to 181.5 million litres. The UK saw value growth of 13% while Denmark and Finland grew by an impressive 27% and 29% respectively, whilst the USA and Canada saw growth at 338% and 84%.
In terms of varietals, South Africa’s two distinctive varieties- Chenin Blanc and Pinotage fared well for the year. In terms of export value, exports of Chenin, the country’s biggest single export variety, jumped 13%, while Pinotage grew by 12%.
The country’s sparkling wine of Cap Classique also continues to see strong growth at 17% and is proving to be a strong category in terms of growing value and quality recognition in our overseas markets.
WoSA CEO, Siobhan Thompson, comments, “The year 2020 will probably go down in history books as one of the most challenging years for the industry, however despite this, we have learnt to adapt and have explored creative ways of engaging with our partners.”
The association rolled out extensive online and social media campaigns such as #SpectacularSouthAfrica, #SaveSAWine and ‘Insider Sessions’ virtual seminars to name a few to draw a lot of awareness to the plight of the South African wine industry and garnered incredible support from the trade, importers and consumers across the globe.
However, despite the growth, uncertainties still remain for the country’s wine industry, as the government yet again banned wine export for the foreseeable future as Covid-19 cases surge.
But for now, the association remains hopeful. “We remain positive that the wine industry, along with its unrivalled wine tourism offering, will return to its usual strength in due course and shine its light for our beautiful country once more,” adds Thompson.
