Despite challenges, the South African wine industry is showing resilience and strategic adaptation that point to a promising future, say those in the industry.
“We are confident that the 2025 harvest will be of great quality across all 10 wine regions,” says Rico Basson, CEO of South Africa Wine.
“A successful [2024] harvest strengthens our sector’s sustainability, competitiveness and resilience. This aligns with our strategy to build a robust and competitive wine industry that continues to thrive locally and internationally, positioning South African wines as leaders on the global stage.”
Basson tells the FM that while confronting low producer profitability, logistical constraints and rising input costs, the industry has an integrated approach to transform these challenges into opportunities.
He says “must-win” battles include: transformation across the value chain; growing exports; embracing sustainable practices, including climate adaptation; improving producer profitability and reinvestment; and industry education and training.
These are vital to enabling growth, which is essential to the industry’s survival, he says.
South Africa Wine focuses on several key areas to boost profitability, including farm-level efficiencies through mechanisation, precision farming and “optimal resource utilisation to reduce production costs and improve yields”.
Creating a stable policy environment is also important.
He says the industry is seeing exciting developments in wine tourism, creating new revenue streams and enhancing direct-to-consumer relationships.
Basson says these focus areas are interconnected. Success in tourism can support premium positioning, while improved farm efficiencies can enable investment in quality improvements for premium segments.
“With the unsustainably low producer return on investment, co-ordinated action across these areas is essential to generate the profitability needed for vital vineyards, technology and people reinvestment.”
The industry’s commitment to transformation and skills development strengthens the foundation for sustainable growth. “Interconnected strategy helps create a virtuous cycle that can help overcome the profitability challenges,” he says.
We are definitely leading the charge in terms of our offering and the variety of what you can do in the winelands, at comparatively lower cost
— Maryna Calow
Maryna Calow, of Wines of South Africa, a nonprofit that represents wine exporters, tells the FM there is a global decline in wine consumption, especially among Gen Z, who, she says, do not find wine sexy enough.
While South African wine exports are unlikely to increase in 2024, in the past few months she has, in speaking to producers, picked up “a renewed sense of positivity” and “cautious optimism” for 2025.
“It’s nice because I haven’t felt this in the industry for a while — a few years now. I think the government of national unity and the strengthening of the rand might have had something to do with that.”
The latest baseline “Agricultural Outlook Report 2023-2032” from the Bureau for Food & Agricultural Policy indicates that only 12% of producers are sustainable, 49% are making low profit or just breaking even, and an alarming 39% are loss-making.
Calow says producer profitability has been low for years.
She recently returned from Italy where she attended the annual meeting of the Great Wine Capitals organisation, where Cape Town is represented. She chairs its marketing group, which promotes wine tourism.
Calow believes South African wine tourism is the best in the world. “Other countries are certainly doing it very, very well and some of them are doing it exceptionally well, but we are definitely leading the charge in terms of our offering and the variety of what you can do in the winelands, at comparatively lower cost,” she says.
The recent increase in direct international flights to Cape Town, especially from the US, has also boosted the export market
“Nine out of 10 tourists who visit the Western Cape include some kind of wine experience in their stay, whether it’s doing a wine tasting or going to a winery or going to a wine bar. Wine tourism definitely feeds into exports,” she says, because many tourists go home as ambassadors for South African wine.
Calow is excited about new markets opening in Ghana, Nigeria, Uganda, Tanzania and Kenya, where consumers, as fellow Africans, are showing interest in and support for South African wine. “It’s a market that is learning and exploring all things wine,” she says.
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