Cape wineries face long haul in Canada
Apartheid set South African wines back on the Canadian market. But despite holding only a 1% share in the country, Canadian experts believe there's great opportunity for the Cape winemakers prepared to fight it out with Aussie counterparts. Arnold Kirby reports
South African winemakers face a bright future in Canada and could become the country's largest importer. But with only a 1% market share it's not going to happen overnight, said Michael Fagan, knowledge resources manager with the Liquor Control Board of Ontario (LCBO).
Fagan told 70 delegates at Wines of South Africa (WOSA) in Stellenbosch last week, that it is a long-term project, but those who persevere will get there. South Africa is the tenth largest importer at the moment, selling just over 1.1m litres of wine in the province last year, representing a 1.7% market share. This was a 19.8% increase, but fell short of Australian wines, which had increased volumes by 30.6% to over 4.4m litres.
Canadians in general are adventurous wine drinkers and are always looking for something a little different.
Topping the sales list was Canadian wines with almost 25m litres, followed by France with 16m litres. Italy imports 12.3m litres; the US imports almost 7m litres; then it is Australia.
Figures released by Fagan show that South African wine sales shot up from just under C$600,000 in 1996 to C$1.4m in 1997, an increase of 138.9%, then declined rapidly by 23% in 1998 to about C$1m. The share then slipped by 3.3% in 1999, which it recovered again last year.
Volume figures released earlier this month by South African Wine Industry Information & Systems (SAWIS) for the entire Canadian market showed that total Cape wine sales in 1997 topped 6.1m litres, then dropped to 4.7m litres in 1998. The figure climbed again to 5.3m litres in 1999 and the January to November figures last year were a shade under 4m litres.
Canadians in general are adventurous wine drinkers and are always looking for something a little different. The present trend is more towards straight varietal wines and away from blended wines, Fagan said. Volumes of blended wines between 1995/96 and 1999/2000 had declined from about 33m litres to about 30m litres, while varietals had picked up from about 14m litres to 20m litres in the same period.
Chardonnay was the most popular varietal, followed by Cabernet Sauvignon, Merlot and Sauvignon Blanc. This presented great opportunities for the Cape's winemakers seeking to do business with the largest single retailer of beverage alcohol in the world - the LCBO - according Fagan.
He said the LCBO sourced wine, spirits and beer from 1,750 suppliers in 67 countries amounting to over C$2.5 billion in sales last year. There were 602 LCBO stores, selling more than 7,000 products.
South African wines previously did very well in the province, but lost market share during the apartheid era. During this period, Fagan said, the Californians, Australians and Chileans moved in. When asked why the Australians in particular had done so well, he said they had invested heavily, had great price points and the Olympics had also helped. "They got into the market place and stayed there. You will have to fight to regain your market share and it will be tough to do so," he said.
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