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Demand for wine is rising, particularly among urban women consumers

| Wine and liquor

Local demand for wine is steadily increasing mainly due to new entrants into the sweet red and rosé sector, driven by women consumers in urban areas.

According to the latest report on liquor consumption patterns by South African Wine Industry Information and Systems (Sawis), released this week, new consumers — mainstream women between the ages of 20 years and 40 years who aspire to a sophisticated, urban lifestyle — are entering the wine market.

The report shows that the South African domestic wine market increased 7.7% in volume terms for the 12 months to October 2015.

SA has generally not been considered a wine-drinking nation and wine has lagged behind other liquor products. This is despite the country’s being one of the major wine producers and exporters in the world.

According to a wine industry report released last year, the average South African wine consumer is more price conscious and less likely to venture into higher priced products. Among other reasons for the relatively low consumption of wine in past years was the aggressive pricing of other liquor products — especially by SA’s major beer producer, SABMiller — which resulted in price-sensitive consumers switching from wine.

According to the marketing director for wines at Distell, Carina Gous, who is quoted in the new Sawis report, extensive market research indicated that there was an opportunity in the market for sweeter-style wines.

Distell believed that the route to go was with a sweet rosé, targeting women 20-40 years old, who aspired to a sophisticated urban life style. These women did not want to drink spirits or beer.

But the Sawis report notes that beer still remains the drink of choice for many. Beer represents nearly 80% of the market in volume terms and 55% of the market in value terms.

The spirits market has been turned on its head. For the past few years, whisky was the star performer and was taking volumes from the brandy market. This changed in 2014-15, with whisky losing volumes (-7%) and brandy volumes stabilising (+1%), the report says.

Jonathan Steyn, the convenor for the Wine Business Management programme at the University of Cape Town Graduate School of Business, said on Thursday that while SA was increasingly being recognised as one of the most exciting wine regions globally, it was dogged by market access constraints.

He said it was struggling to drive volume at elevated price points — particularly in brand-driven middle-price tiers — and was being suffocated by proportionately low local wine consumption.

"A particularly vexing question is how to create sustainable consumer value in the local market? More precisely, how to grow wine consumption locally while addressing, for example, the social problems created by alcohol abuse?"

"The wine industry is one of SA’s most promising export industries and a leading job creator, but at the same time it faces some big challenges," said Mr Steyn.

The Graduate School of Business and the VinPro Foundation have joined forces to offer five bursaries for students from disadvantaged backgrounds to study wine business management in 2016.

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