Wine sales down, value up

The wine market in South Africa saw a decrease in volumes this year. This is because though the local wine industry increased its volumes in 2012, the import quantities decreased and the export market saw a decrease in 2012. Even with the introduction of new laws regarding alcohol and its sale, local manufacturers are not concerned, as the majority of wine types saw increase in demand and the local industry has had good support.

Pricing structure

The pricing for the wine industry saw an increase this year, which helped the value of the market as a whole grew for 2012, on par with the growth seen in 2011. Wines are categorised as HP, MP and SP:

HP wine (high-priced wine): top-of-the-range wines; i.e. 750ml non-returnable cork-mouthed glass bottles. Includes natural, sparkling and fortified wine
MP wine (medium-priced wine): medium priced quality wines in various pack types and sizes. Includes 2 litre, 3 litre and 5 litre box wines
SP wine (standard-priced wine): natural wine, mainly in larger types of glass, plastic and foil packaging.

With exports down, the consumption of local wine increased in 2012, with both the on-consumption market and the off consumption market growing.

The regional shifts of wine also saw growths in all provinces, as the local market picked up volumes.

The current climate of the packaging in this industry is unsure, as packaging types, which were being phased out, have begun entering the market again and are expected to remain for a little while longer, such as papsak.

The wine market is classified into three categories:

Natural wine: a non-fortified and non-sparkling wine, including perlé wine, which is wine, carbonated to the extent that the pressure in the container in which it is sold is between 75 and 300 kPa. It also includes any grape juice or must and grape juice or must concentrate used in the sweetening of such natural wine
Fortified wine: wine which has had alcohol added to it during its fermentation process to raise the overall alcohol level (usually 15% to 20%) of the final wine. This is done in the production of sherry and port
Sparkling wine: wine carbonated (by either fermentation or impregnation with carbon dioxide) to the extent the pressure in the container in which it is sold is more than 300 kPa. It includes any grape juice or must and grape juice or must concentrate used in the sweetening of such sparkling wine

BMi Research specialises in consumer and industrial research in various sectors, including the retail market. For more information, go to www.bmi.co.za.