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For the first time in its almost 350-year history, the South African wine
industry is to host a local exhibition of its products for international buyers. Called Cape Wine 2000 and to be staged by the South African Wine & Spirits Exporters' Association (SAWSEA), it comes in the wake of dramatic growth in wine exports, which rocketed from 20m litres in 1992 to last year's 129,3m litres.
Some 100 wine buyers for specialist wine stores, supermarket chains and licensed establishments in the UK, the Netherlands, Germany, the Scandinavian bloc, the US, Canada and Japan are scheduled to arrive in mid-April for Cape Wine 2000. To be held at Nederburg, outside Paarl over April 13 and 14, the exhibition will show the best of the Cape winelands and involve about 100 of the country's top wine producers. Guests, who will also include a contingent of about 25 foreign wine journalists, will visit tourist highlights during their stay.
Says SAWSEA CEO Kim Green : "The purpose of the show, which we plan to hold on a regular basis, is to focus on the range and diversity of quality Cape wines in the context of the Cape itself. In the process, we hope to highlight our shift into the premier, branded sector of the market, at speciality store level, in retail chains and in licensed establishments."
She said historically Cape producers had been well represented in the very price-sensitive end of the export market but were lesser known for their quality offerings.
"When we emerged from economic isolation in the early 1990s, as an industry we were quite unprepared for the interest that lay in Cape wines. From its establishment in 1918, the KWV played a key role in regulating the industry until its restructuring into a public company in 1997. But the KWV also sheltered wine producers from the market by undertaking international marketing and distribution on behalf of its members.
"As a result, many producers became disconnected from the very markets they were supposed to be addressing.
"The UK, which remains one of the largest markets in the world for imported wines, discovered us and then very hurriedly distribution channels were established to supply UK consumers with an affordable source of quality wine. In the main, we were unschooled in marketing abroad and abdicated this function to foreign wine agents to decide on our positioning, pricing and where our wines would be stocked.
"Because our industry comprises such a highly fragmented collection of co-operative producers, estates and private cellars, we never took the collective initiative in the way the Australians have done by clearly deciding where as an industry they wanted their wines to be positioned and supporting their initiative with extensive funding. They selected their own agents and distribution channels to support their positioning, and in many instances placed their own staff directly into the market. It is therefore no surprise that they have been the indisputable success story of the international wine industry.
"Australia currently ranks 5th among the world's top 20 wine exporting countries in terms of revenue earned. Income earned from wine exports increased from US$3,6m in 1967 to US$536m in 1997. In contrast, South Africa earned US$4,5m from its wine exports in 1967. By 1997, the figure had only reached US$188m," said Green.
Today South Africa ranks as the world's 10th producer in terms of revenue, following on the US. The top three countries are France, Italy and Spain respectively.
Green said a critical factor in Australia's success had been the consolidation of ownership of trademarks by a few major players in its wine industry. South Africa, on the other hand, was characterised by a far larger number of small operators, who lacked both volume and international trademarks.
"A cardinal feature of our marketing plan is to increase exposure for South African brands via speciality wine stores and on-consumption outlets. To succeed, we need a collective platform from which to export and this is starting to happen as local players for the first time are working in concert.
"It is also vital that we underscore our quality positioning. In doing so, we want to showcase local producers within the context of the Cape winelands. We believe exposure to the unparalleled scenic beauty of our winelands, the consistency of our vintages, our fast growing technological excellence and the enormous range of wines and wine styles should go a long way towards correcting misperceptions."
Green said for the first nine months of 1999, compared with the same period in 1998, sales of white wines had flourished, increasing by 29% in the UK, South Africa's largest export market, which accounted for 40% of foreign sales. In the Netherlands, white wine sales grew by 42%. Exports to the US had also increased significantly, with whites growing by 41% and reds by 46%. Particularly notable, according to Green, was the fact that sales of bottled wines had grown ahead of bulk exports, a trend vital to improving the country's quality positioning.
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