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South African brands must invest more to bolster premium wines, says WOSA chief

Published:  25 March, 2014

In order to boost growth of South Africa's more premium wines, producers and brands need to be prepared to invest, says WoSA chief.

Speaking to at ProWein in Dusseldorf earlier this week, chief executive Siobhan Thompson said she was "trying to renew confidence between producers and brands to start looking at investment from their side" to bolster premium wines.

Wines of South Africa can address one side of the marketing, but individual brands need to tackle the other side, she said. Thompson added that she is encouraging brands to invest specifically in the UK market again. WOSA funding to the UK has held steady for the past several years, said UK market manager Jo Wehring, although new markets coming on stream puts pressure on that.

Referring to the weakness of the South African rand, Wehring said: "Trading conditions are good from an exporting point of view, but it makes marketing more expensive."

Thompson said that"the premium South African category is starting to be noticed - and there's a lot of innovation coming through from younger winemakers who are doing things differently."

Wehring added that premium South African wines were "still attainable" and affordable for consumers .

The UK's average price for South African wine was £4.72 to the end of 2013, according to Nielsen, versus a UK average of £5.23.

"Increasing South Africa's average price is still something we'd like to see  - it's more about increasing the share of the South African category at a higher price point," Wehring said.

She added the country's over-reliance on the bottom end of the market was becoming less evident. "We've seen a big drop at the bottom end and growth at the £5 to £7 mark, but there's still work to do. "

Looking globally, Thompson said South African wines were now "holding their own" in Europe, following the economic pressure of the last few years.

The UK and German markets were very important for South Africa, with the UK accounting for21% of exports. Thompson said both countries were showing "good growth".

Germans have a strong affiliation to brand South Africa and wine tourism is key to the German market, observed Thompson. She added that the Netherlands and Sweden had been "quite static" for the last few years, and that they are looking to "rejuvenate" those markets. Elsewhere Russia is showing growth.  WoSA is also now looking at exploring the African and Chinese markets more.