Lots to whine about

25 Jun 2010

SA is up there among the world's giants, ranking as the seventh-largest wine producer and eighth-largest exporter. But as wine drinkers we dismally lag the major consuming countries.

According to SA Wine Industry Information & Systems (Sawis), SA consumers bought 297m litres of wine in 2009. This may seem impressive but it works out to a mere 6.3l per inhabitant, putting SA 32nd in the world. The French, the biggest wine drinkers, each downed 54l, with other top 20 consuming countries averaging 31l per inhabitant.

In the mid-1980s, the average annual world consumption of wine was around 11l per inhabitant. Domestic wine consumption held fairly stable into the 1990s - each person drank just below 10l, according to Sawis. Domestic sales peaked in 1995 at 405m litres.

Beer country

Wine consumption has been falling at just above 2% annually over the past decade, losing the battle for the SA alcohol consumer's favour, especially to beer. According to the SA Advertising Research Foundation, only 11% of adults are regular wine consumers. Beer dominates the SA alcoholic beverage scene with a total of 2.9bn litres being consumed in 2009 - over 59l per inhabitant or almost 80% of all liquor consumed by volume. This is up from the market volume share of around 50% that prevailed throughout the 1990s.

The share of spirits (brandy, whisky and white spirits) in volume terms can best be termed stable. Data from wine export body Wines of SA shows consumption of spirits increased at a minimal annual average of 0.4%, while wine farmer services organisation Vinpro reports that in 2009 spirits had a 3% market share by volume. By value, spirits had a significant 26% share, second only to beer at 49%. Wine, natural and fortified, had a 13.4% share by value.

There are a number of reasons for wine's declining popularity. This includes SABMiller's strategy of keeping beer price increases below the inflation rate.

Wine expert Neil Pendock cites another reason. "There has been a massive exodus of young whites [around 1m] from SA over the past decade," says Pendock.

This, he believes, has reduced the core SA wine-buying population. "Many of those who left early are now in their 30s and 40s and would have today been your [premium price] Meerlust Rubicon-type wine buyers," he says.

Source: Financial Mail

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