Where Next for South Africa?

Grand horizons: the view over False Bay from Paul Boutinot's ambitious biodynamic project at Waterkloof.
Grand horizons: the view over False Bay from Paul Boutinot’s ambitious biodynamic project at Waterkloof.

It’s unusual for me to experience moral anxiety about wine, but it happened on my recent trip to South Africa for Cape Wine 2015.

I was excited by the incredible array of world-class wines coming out of South Africa, but concerned about the future of the industry. Don’t get me wrong: the wines are great, and there are many bargains, but I wonder whether some of the new-wave wines are viable in the long-term.

Shortly before I arrived, the pound was exchanging for 21 Rand, admittedly strong from a UK perspective, meaning that top bottles of wine from leading estates were listing for the equivalent of £25 in smart restaurants. Yet even allowing for the comparative strength of the UK economy and how far that carries the British traveller, this is clearly too low for good wine, let alone some of the best bottles produced in the southern hemisphere’s most compelling terroir.

When the wines of the Cape are on shown at our weekly tastings, they overperform on the value-for-money front. This week, by pure coincidence, we were showcasing chenin blanc from South Africa alongside bottles from its homeland in France. We sold a healthy amount of South African wine on the night in both stores – and not a bottle of French. Bearing in mind that many consider Loire wines underpriced in the context of French quality wine, this is telling.

Although excellent wines are being made, this low selling price may be reflected back into the winemaking ethos. A sense of good value was probably part of Charles Back of Fairview’s original decision to start buying fruit from the Swartland. Certain wineries are now using a substantial quantity of fruit from Oliphant’s River, previously not at the top of anyone’s shopping list. Many winemakers are relying on less new oak, and employer larger, cheaper formats of oak such as the 600 litre barrel, which is hardly surprising when the cost of 225 litre barrels exceeds R15,000, not to mention bottles and corks, which are being brought in from Europe on a punishing exchange rate. Undoubtedly an element of this is down to an authentic desire for less oakiness in the wine, but it isn’t necessarily encouraging to see some ambitious, skilled winemakers forced to cut costs due to the low selling price of their wines.

It seems in addition that there is a structural issue with South Africa’s business model. The dynamic group of young, highly qualified winemakers who comprise variously the Swartland Revolution and the Zoo Biscuits are busily cracking out some creative, delicious wines from across the Western Cape but with a major focus on Swartland and Stellenbosch. Yet few own any vineyards, and even the greatest of their number, Eben Sadie, is dependent on rented fruit for which he overpays, enormously, in order to secure the grower’s loyalty. For many of the producers I spoke to, their contracts are only as secure as the friendships they have with their growers. In he case of Etienne and Yvonne Le Riche, one 15 year contract that has never been written down on paper is still going strong, but such honourable dealings surely can’t be relied on across the board as the competition for good vineyards increases.

Meanwhile, the more established ‘chateaux’ of greater Stellenbosch are busily buying up land in desirable viticultural areas to produce their wines. The best example I came across was Mark Kent at Boukenhoutskloof. While fruit for the syrah has always come from Wellington, Mark intends to use the newly purchased Porseleinberg site in Swartland to form the basis of the estate syrah in the future (it is only 20% in the current vintage, 2012). This will change the flavour of the wine but it is also going to change the character of the Cape as other estates do the same.  In the case of Mullineux, now Mullineaux and Leeu, the finances of Analjit Singh proved crucial in securing a critical vineyard for their lauded Swartland operation that they couldn’t afford independently, the loss of which might otherwise have directly impaired – or at least changed – the quality of their wines.

My ticket to the Cape was paid for by Wines of South Africa UK because they can see the clear need to build advocacy and loyalty to South African wine in the UK trade, in view of the challenges from the competition in both the northern and southern hemisphere. Although I spent only five days in the Cape, it seemed that the region’s major strength – diversity of flavour, youthful polyvalence of views, myriad styles – is also a weakness. A branding consultant would advise tighter focus, and I don’t just mean a new logo. At the moment, South Africa stands for potential, some of it realised, but not much more than that for many consumers. Some of the initiatives I saw – The Swartland Revolution, Zoo Biscuits and the Breedekloof producers’ association – are building communities which is a step in the right direction of creating strong identities. But I wonder if South Africa will be able to find a strong enough brand identity for its cheaper wines, or a clear enough demand among fine wine drinkers for its more expensive wines as the competition from Europe heats up.

Aside from continuing to advocate South African wines as a retailer (which I have been doing for years) I’m also devoting the opening pages of this new blog to South Africa. I’m sure they won’t be the last.

Next up: Profile – Sebastian Beaumont

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Wine merchant at large.

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