just the answer – Wines of South Africa
The fifth biennial Cape Wine trade show was held in Cape Town last week. Olly Wehring visited the show and while there spoke with Su Birch, CEO of Wines of South Africa (WoSA), about the challenges and opportunities ahead for South African wine internationally.
just-drinks: In your view, how good a job is Wines of South Africa (WoSA) currently doing for the South African wine industry?
Su Birch: We do as well as our industry does, because that's what we're trying to support. The last 18 months have been brilliant for the industry - the change in the supplier scenario, the weaker rand, the re-establishment of some brands. These are successes which we have been building on consistently in markets like Scandinavia and Germany. Some of it is extrinsic, like exchange rates, but I also think we've made real intrinsic progress.
We've had a lot of very mediocre red wine sitting in tanks that we couldn't move. All of that has been drained and has gone into interesting places like Angola. So some money is starting to circulate within the industry. Prices have also risen - the bottom price was ZAR1.80 (US$0.22) per litre; now that's at ZAR3.80. At the same time, exports are rising, and we've got some stronger brands coming through. So, I feel very positive about the industry.
I think there are a lot of the things that we're doing to position the industry for the long term that are correct, such as wine- and eco-tourism. So, there are lots of positive things happening.
j-d: Are there any areas that you feel require improvement?
Birch: We haven't been successful in the US - it's only been premium brands and a few companies that have been successful in the US. That's been quite frustrating that we aren't doing better there.
The US is a country that knows almost nothing about South Africa - there's no colonial heritage like in Canada or the UK. The US has a very poor - almost non-existent - image of South Africa. I also think that, for many countries, the positive image of that country abroad rubs off on its wines. For us, it's almost the obverse. One of the few things that lifts South Africa's image abroad is the success of its wine industry. In the past, there's been a lot of negative news out of South Africa.
The US is also a very competitive market and you have to have exactly the right product and they need to feel that you're backing it. I think that many people have gone in with the wrong product, with insufficient market knowledge and with insufficient investment. If you're going into the US, you have to be like the Duracell bunny - you have to keep hammering away at it until you break through.
j-d: Many wine companies are getting excited about the arrival of the World Cup in South Africa in two years' time. Could they not be getting a bit carried away?
Birch: If we have a successful World Cup, it would draw lots of attention to South Africa and could possibly change the country's media image. Then you'd have a lot of international journalists and TV reporters looking for stories about South Africa, showing imagery of the country and imagery of the winelands. I think that can only be hugely positive.
j-d: Is heading up a generic body a thankless task?
Birch: It's impossible to please all the people all of the time. You see it so clearly at a fair like this - I think I've had 85% of people come and say that it's a fantastic event, with wonderful visitors, and then you have the other 15% come shout at you saying they haven't seen anybody. That's just the nature of being a generic body. You're always going to have that.
|Su Birch, CEO of Wines of South Africa|
j-d: Turning to a particularly sensitive issue for South Africa, there is a marked lack of black winemakers and wineries at Cape Wine 2008. Why?
Birch: We have 15 black-owned brands exhibiting here and we have some black winemakers here, but they are few and far between. I think one needs to understand the history of the wine industry here. There's been no money made in this industry for quite a long time. So, it doesn't lend itself easily to transformation.
If you go to Johannesburg, it's a black city, it's an African city where there's a hugely-emerging middle class. Then, if you come down to the Cape, it's a bit like The Last Post. But it's the nature of the business and our industry. If you haven't inherited your farm, then you're going to really struggle to make money in the wine business, and if you're a sharp, black businessman, you're so not going to invest in a winery, you're going to invest in an IT company or a construction company. Also, for our best students in the Western Cape, their ambition is to go and work in the city. But, what we do need to do is to start growing and empowering other areas of the industry.
But wine is difficult. There's a very, very powerful glass ceiling in wine. I remember when I joined the industry, I'd been in exports, I'd sold spirits brands successfully in South Africa, but I was still totally intimidated by the wine world for at least six months. Coming into this industry without experience, it's difficult to succeed. This is not like selling soap powder.
j-d: How frustrating is it that WoSA does not receive any Government-funding?
Birch: It's hugely disappointing. I think there are issues - they look at us and they see a white industry. But I don't think they look deeply enough at how many people we employ and how many jobs we create. Despite recent Government research, which has highlighted agricultural exports as a key driver for growth, WoSA still doesn't seem to get any money. That's sad, but it's also understandable. You have to remember that this isn't like any other country - there are so many other demands on the state here. If they look at our industry, see that it's surviving and think that it's better that they build some more houses, you can't really argue with that.
j-d: You've been at WoSA since early 2000. What goals do you set yourself after over eight years as CEO?
Birch: The key thing for me is to see higher returns for South African growers - I'd like to see more success with brands that aren't just at below EUR3.50 or three for GBP10. I'm not decrying that that's not a market, but we need to sell more wine at higher prices for a sustainable industry. That's the ultimate goal.
A fortnight ago, Wines of South Africa held its biennial tasting event for the country's wine producers in London. At the show, the trade body unveiled its latest marketing tool: ‘DNA SA – a Brand Blu...
The fifth biennial Cape Wine trade show was held in Cape Town last week. Olly Wehring visited the show and while there spoke with Su Birch, CEO of Wines of South Africa (WoSA), about the challenges an...
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