No need to imitate the Australians to achieve success
South Africa should not have to copy its more successful New World counterparts to be competitive on the international wine market, say leading commentators. But as Arnold Kirkby reports South Africa should be wary of jumping the gun and an Old World backlash.
"There is no need for the local wine industry to have to emulate the Australian model to achieve success in international markets." These were the words one South African industry leader, now living in Australia, gave recently on his return to the Cape.
Dr Johan Bruwer of the Wine Business Group at the University of Adelaide, Australia
Dr Johan Bruwer, a South African working out of Australia for the Wine Business Group at the University of Adelaide Australia, is ideally placed to comment on what he sees as South Africa's international potential.
The University is the first and largest academic institution in the world to offer university degrees in wine business management and wine marketing. And he was recently speaking as part of a joint initiative with the South African Wine Industry Trust (SAWIT) and the University of Cape Town Graduate School of Business, which offers specialised courses to the wine industry.
Bruwer recognises there is a need for the development of high-level skills in wine marketing and business management in South Africa in a bid to match the excellent technical capacity of the domestic wine sector.
However, he also cites a number of unique features pertaining to Cape Town, which, he believes, gives it strength internationally. These he says include its diversity of wine growing regions, its proven capacity to produce world-class wines from the major noble varietals, as well as a heritage of nearly 350 years of Old World classicism combined with a New World focus.
"While the idea of a 'wine brand SA' is widely supported, it remains a nebulous concept"
"Once a widely understood and communicated notion of 'wine brand South Africa' was in place," he says, "the local industry would be better positioned to penetrate export markets."
But following words of comfort Bruwer also issues a word of caution by saying that South Africa could not hope to make the quantum leap from domestic to international player overnight.
"The key to South Africa's success in wine markets abroad will be the ability to develop local operations with sufficient clout and size to function on a global stage. It is very likely that a New World wine-producing company from the United States or Australia could seek to form an alliance with a South African operation to accelerate such a process."
He continues: "However, it would seem that the reason no such large-scale alliance has been established to date is because of ongoing misperceptions of South Africa's political instability. There is also a widespread underestimation of the local industry's technical and infrastructural strengths."
And there is a need he says for the development of high-level skills in wine marketing and business management as there is a tendency in any industry to replicate the approaches of successful enterprises in the hope of achieving similar outcomes.
Bruwer predicted that New World wine-producing countries would increasingly establish joint ventures and alliances among one another to meet the united opposition from Old World countries keen to recover lost ground. He also said: "While much of the international focus in recent years has been on the building of support for New World wines across the world, it should not be forgotten that countries such as France, Italy, Spain and Portugal each produce vast volumes of wines across a variety of price points.
"Their combined resources pitted against New World players could present a formidable challenge and would prompt New World producers to act in concert
to protect and grow their share of the global market."
However, the local wine industry had its own competitive advantages, its own structure and its own operating environment that necessitated different approaches.
"After discussions with producers, it seems that while the idea of a 'wine brand South Africa' is widely supported, it remains a nebulous concept.
"I fully appreciate that its development requires close internal analysis and circumspection, but clarity must be achieved as a priority.
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