Winemakers eager to crack black market

Sep 09 2012 15:33
Johannesburg - South Africa's wine-makers are still trying to break into the black market, they said at the recent Soweto Wine Festival.

More black consumers were drinking wine, but it still did not amount to a "big change", said Boekenhoutskloof Winery sales manager Innocent 

"We do see change, but it's not that big change we're looking for," he said.

"Today (at the festival) they are drinking wine, but tomorrow they'll be drinking beer."

Bon Courage representative Spikkels Senekal agreed. There was "a huge market" of black drinkers, but they usually opted for beer and whiskey, with wine consumption adding up to "very little."

There was "a lot of room for growth," he said.

Festival co-owner Marilyn Cooper said the wineries had found that participants this year - the eighth year of the festival - were more knowledgeable than in the past.

"When we started, people didn't really know about wine. Now they know a great deal."

The expansion of the market was "a process", she said. "I promise you that by next year (black people will) be drinking more wine."

Wine drinking was "part of a lifestyle you acquire", she said, and argued that the wine market could not be broken up demographically.

"You can't say this is a black market and this is a white market. That's the old South Africa. You cannot break this market up into black consumers and white markets."

Cooper said the key for wine-makers to get more black consumers would be to take their business to black consumers - in the same way the wine festival did.

"You don't see that anywhere else: white people behind the counter selling to black people."
Her partner Mnikelo Mangciphu owned wine shops in Soweto and the Johannesburg CBD and has recently opened a shop in Gugulethu, outside Cape Town, she said.

Some wine-makers at the festival said that while expanding the black market was important, it was only part of the equation. Black ownership of wineries remained an issue.

Although many wine brands were owned by black companies, they did not own their own vineyards and had to purchase wine in bulk from established vintners, said Vernon Henn, the general manager of Thandi, one of the country's three black-owned wineries (they own their own land and vineyards).

Henn said wineries were capital intensive and "cash hungry", and that new entrants to the industry faced an uphill battle.

Thandi had struggled for shelf-space in shops, as retailers were uncertain whether it had the funds to promote itself.

"We don't have all the funds to please the buyer," Henn said.

He also took the government to task for not helping to do more to help small, black producers of wine.

The wine served at Parliamentary events seemed to come only from the nation's large producers, he said.

Cooper agreed that transformation had largely been limited to brands.

"I don't want to lie to you. wine-making in the Cape is owned by whites," she said. "In 20-years, we've got three (black-owned companies) who actually own the land."

She said most wineries became profitable only in their second or third generations.

"It's an expensive business. How much wine at R35 a bottle do you have to sell just to repay your loan?" she asked.

*Follow Fin24 on TwitterFacebookGoogle+ and Pinterest. 



Read Fin24’s Comments Policy

24.com publishes all comments posted on articles provided that they adhere to our Comments Policy. Should you wish to report a comment for editorial review, please do so by clicking the 'Report Comment' button to the right of each comment.

Comment on this story
Comments have been closed for this article.

Company Snapshot

We're Talking About...

Savings Month

It's never too late to start saving. Visit our special issue and add your voice.

Money Clinic

Money Clinic
Do you have a question about your finances? We'll get an expert opinion.
Click here...

Voting Booth

Social media is giving SA consumers the power to discipline corporations corporations

Previous results · Suggest a vote