(Re)forming Global Wine Markets: The “New” South Africa

What’s red and white, costs millions of dollars to produce, and takes 20 years to mature? The rebirth of a New World player in the global wine market.

South Africa’s wine renaissance during the 1990s coincides with three other New World market leaders: Argentina, Chile and New Zealand. Their successes were built on Australia’s previous 20 years’ experience branding wines, which launched in the early 1970s, and the surprising victory of the United States in the 1976 “Judgment of Paris.”

These countries’ back stories provide interesting context for my journey to South Africa, though of course past is not always prologue. There are a few important and striking similarities.

In oddly regular 100-year cycles, four centuries of European explorers, missionaries and entrepreneurs planted the first grapes in each New World country: Argentina and Chile in the 1550s, South Africa in 1655, California and Australia in the mid- to late-1700s, and finally New Zealand in the mid-1800s. (It’s also worth noting that a wave of Bordelaise expats decided to invest in Chile after they were locked out of vineyard ownership when the 1855 Classification system fundamentally transformed the industry in Bordeaux.) Only Chile and Argentina escaped the curse of Phylloxera in the late 1800s. The early to mid-1900s was a cornucopia of tumultuous economic and political circumstances, and over-production of low quality wines, which certainly stalled the momentum of New World wine industries – and in some cases nearly killed them!

South Africa (SA) is one of those near-death stories. In many ways, it is miraculous that the industry has been resuscitated, albeit with very little resemblance to its colonial past. Wine gurus Jancis Robinson and Hugh Johnson write this telling note in their just-released 7th edition Wine Atlas of the World: “To the casual observer the Cape winelands may look just as they did in the decades leading up to 1994, but in reality the people, the vineyards, the cellars, the wine map, and the wines have changed out of all recognition.” BTW, I highly recommend this resource. In iBooks for iPad, it is highly interactive with great maps and photos with recommendations of Jancis Robinson’s favorite winemakers around the world.

Revisiting quickly what was happening in SA in 1994, which author Tim James notes in his book The New South Africa, the end of the white majority regime in 1994 allowed for tremendous changes in the wine industry. Other industry changes included the collapse of quota and minimum pricing systems.

The next key pivot point came in 1995 when SA was soundly defeated in an international wine competition against Australia. It was obvious to all that SA wines were of inferior quality. In a dramatic turnaround, and with significant investment in technology as well as improved vineyard and cellar management practices, SA became a late entrant in the flight-to-quality movement. Wine writer John Plattner described this change as a “swivel on its plinth.” (I had to look that one up! A plinth is a heavy base, typically supporting a statue or vase, in this metaphor the historic base of the wine industry.)

SA winemakers got to work with international varieties developing a style of wine that aimed to strike a balance between familiar Old World styles and the juicy, fruit-forward high-alcohol New World wines of Australia and the US. Happily they were getting ahead of the curve by backing off the latter “Parker points” style. Most of the wineries producing wines in what is now called SA’s “authentic” style were established after 2000. SA’s premier wines are blends, primarily from Bordeaux grapes including Savignon Blanc/Semillon. Sadly, traditional varieties such as Chenin Blanc, and SA’s own Pinotage, have taken a far back seat.

It worked! SA exports increased seven-fold between 1993 and 2011. When the government cooperative KWV was privatized, a sum of about USD47 million was set aside in a trust to fuel research and development. Today, with over 600 wineries and many new vineyards planted on virgin land in emerging wine regions, SA ranks 8th in worldwide wine production. Italy and France dance for first and second places, Spain is third, and the US is fourth followed by Argentina, Australia and Germany.

I’m looking forward to sharing my journey to South Africa, and meeting some elephants, starting Wednesday.

Previous posts:

Lost and Found?: 20th Century Wine Games in South Africa

Lost: The Wine Industry in South Africa

T-23 to South Africa

Image credits: vineyards theaustinwinemerchant.com; map ameliawine.com; elephant crushing grapes dailymail.co.uk

One response to “(Re)forming Global Wine Markets: The “New” South Africa

  1. Hello Kathy thanks for including me with your wine letter and blog hope you enjoy the elephants I’m really interested in what you’re writing

    Sent from my iPhone


Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s