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South African #wine farms considering their future

Many South African wine companies might not return to Vinexpo or the London International Wine Fair in future years due to the fact they believe ProWein in Germany is a more effective show from a business perspective.

Speaking at Vinexpo in Bordeaux yesterday, Kleine Zalze managing director Kobus Basson told the drinks business that ProWein, which took place in March in Düsseldorf, had “raised the bar” in business terms and that the timing of this year’s Vinexpo, with ProWein and the LIWF also taking place in recent months, meant that some wineries had exhausted their resources and spent huge amounts of money for little gain.

 

“As far as seeing our business contacts and buyers in central Europe and Scandinavia are concerned, ProWein is a much more effective show,” Basson told db.

“A lot of South African wine companies at the LIWF this year said ‘this is the last time’ as the timing in relation to ProWein was not convenient.

“It is also not a great show for brands that are not strong in the on-trade, as there are only around four or five really influential buyers in the UK off-trade and they tend not to visit generic pavilions, which is what many South African brands exhibited at this year.

“On generic stands people tend to crowd around the buyers, which they obviously don’t like. They don’t want to feel pressured or hurried.”

 

Basson added that Vinexpo is also a show which has ground to make up on ProWein.

“The operation in Germany is so slick,” he said. “Here at Vinexpo it isn’t uncommon for people to have to walk for up to two kilometers with their wines just to get to their stand. In the heat you get here that is never good for the wines.”

Meanewhile Kleine Zalze is looking to capitalise on its success in the UK on-trade by moving into selected top-end independent off-trade outlets.

The brand is the most widely-listed South African wine in the UK on-trade and Basson says the time is right to look to build on that brand awareness.

“We started working with Hatch Mansfield last year and they have had plenty of positive feedback,” he said.

“We might not be on the same level as the likes of Gallo, but I am surprised at the level of awareness people have of Kleine Zalze over there.

“We want to build the brand in the independent, premium off-trade channel so as not to harm the image of the brand in the on-trade.”

Basson did admit, however, that there is a growing feeling within the South African wine industry that they might have to look at focusing more on other international markets due to the tough trading conditions currently in the UK.

 

“The UK is a critical market for us, but we need to be realistic about the world and there are other markets we can concentrate on with more value for us currently.

“With taxes and exchange rates, the UK is becoming increasingly difficult to make money from. We must not close our eyes to the rest of the world.

“From a business perspective, it is much better to sell less for more than sell more for less.”

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