![]() However, it is positive that wine grape producers have seen these higher prices filter down to the farm gate to some extent, with net farming income moving towards more sustainable levels in 2019.Īlthough many producers are still only breaking even or operating at a loss, it is encouraging to see wine grape producers re-establishing vines. This underlines the importance of sustainable South African wine brands and strategic marketing. Whilst the structural adjustment on price is positive and long overdue, going forward care should be exercised to strike a balance between value increase and volume loss. On the local front, the retail price increased by 7%, with volumes 8% lower. While export volumes for the 12 months ending November 2019 were down 25%, the value per litre increased by 24%. Over time, a decline in the availability of wine has sparked a renewed focus on higher-value products and higher price points per litre for both local and export markets. According to South African Wine Industry Information & Systems (SAWIS), the 2020 wine grape crop is at this early stage expected to be equal to or somewhat larger than in 2019, but still below the five-year average. This has led to the area under wine grape production shrinking by 7% over the past five years to 93,021 ha and the number of wine grape producers declining by 34% to 2,873 over the past decade.Ĭertain wine grape growing areas in the Northern Cape and Klein Karoo are still under tremendous pressure from the ongoing drought, but most areas in the Western Cape are experiencing a good growing season thus far leading up to harvest time from January to March 2020. The profitability of wine production has been under pressure for some time due to rising input costs, tough market conditions, policy uncertainty and, recently, unfavourable climatic conditions. These include a more focused export strategy, understanding and leveraging the local market, growing wine tourism, giving transformation efforts new momentum and ultimately also ensuring a better profit margin for wine grape producers at farm level. The Wine Industry Strategic Exercise (WISE) identified 10 projects in 2015 that will help the industry be more robust, profitable and globally competitive. The industry stands at the midway mark of a ten year strategy towards a stronger, more sustainable sector in 2025. For every R1m invested in the wine industry, five or more people can be employed. The wine industry annually contributes more than R36bn to South Africa’s gross domestic product and employs 290 000 people throughout the value chain. This, according to an opinion piece by Vinpro MD Rico Basson in the #BizTrends2020 edition of Bizcommunity on 6 January 2020. ![]() Although challenges such as climate change, shifts in production and demand and financial pressures are expected to continue into 2020, it has led to the industry becoming more streamlined, focused and adaptable. The South African wine industry is entering a new phase of repositioning, consolidation and reinvestment.
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |