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Johannesburg - Meticulous selection, great diversity and rare gems from small parcels of exceptional vineyards have raised the bar for the 31st Nedbank Cape Winemakers Guild Auction, when 55 distinct, crafted wines go under the hammer in Stellenbosch on Saturday, October 3 2015.
This year marks the 20th anniversary of Nedbank’s association with the Cape Winemakers Guild and the bank has renewed its longstanding partnership for a further three years.
"Through its partnership with the Cape Winemakers Guild, Nedbank has made things happen in the wine industry, and is excited to see the growth and development over the last 20 years," said Tobie Badenhorst, head of sponsorship and cause marketing at Nedbank.
"The Nedbank Cape Winemakers Guild auction has been a benchmark of winemaking excellence for over three decades with wines of remarkable lineage and enduring quality. These rare, outstanding wines are crafted with creative flair in small volumes exclusively for the auction by members of the Guild."
In association with the Cape Wine Makers Guild, Nedbank is also the contributor to the protégé programme, which is designed to accelerate transformation in the wine industry. Since the inception of the Guild’s Protégé Programme in 2006, 17 interns have participated with no less than nine graduates who are all forging successful career paths in the wine industry.
Badenhorst said the South African wine industry has experienced substantial changes due to the deregulation of agricultural marketing, liberalisation of trade and lifting of sanctions after 1994 elections.
The industry harvests approximately 1.5 million tonnes of wine grapes, of which an estimated 900 million litres of natural wine is produced. South African exports represent 55% of natural wine sales, while 45% is sold locally. The wine industry is predominantly export driven and exports for 2015 show a 10% decline compared to previous year, predominantly in the bulk wine exports.
The EU countries still remain South Africa’s main export market and economic conditions in the EU are a challenge with regards to increased sales.
Local wine sales in 2015 show a 7% increase compared to the previous year and, taking into account that local sales in 2014 were the highest in 20 years (driven by bag-in-a box and bottled wine sales), this is a very positive trend, according to Badenhorst.
"Although production is relatively stable, a concerning trend is increase in average age of vineyards especially in low production areas. High production areas (irrigated) still show positive trend re new plantings," he said.
The Long term outlook for the industry (driven by exports) remains positive due to increased focus on the US with strength of the dollar as well as new market penetration in Africa and Asian markets. However profitability of local producers remains a concern in low production areas and negative impact of higher than inflation increases in labour and energy costs.
"The long term sustainability of the industry will be driven by productivity, higher production (yield/ton) and establishing of new export markets to increase higher net revenues per tonne. SA is continually exploring new markets. Wine exports to China have risen substantially over the last two years to approximately 8.7 million litres at the end of 2014," said Badenhorst.
"There is also increased focus on Africa for wine export growth given easier access due to infrastructure investment. The US market is also becoming more popular, albeit with its own challenges. There is also increased focus on local bottling for export market with a possible positive impact on job creation and additional revenue."
While domestic sales of wine experienced growth in 2014 and 2015, exported wine volumes showed a dramatic decline in comparison with the previous year due to very good local harvests last two seasons and below average harvest in Europe. SA is still struggling to make inroads into the very large US market as well as to create the right brand with regards to price-points and associated volume growth.
"The biggest challenge of South Africa’s wine industry is pressure on profitability and long term sustainability due to above inflation increases in especially labour and energy costs. Although a weak Rand is positive for wine exports there is also a negative impact on input costs and imported machinery costs," said Badenhorst.
