South African wine exports hold steady in turbulent times

By Jo Gilbert

Published: 23 January, 2025

South Africa’s wine exports have weathered a steadily contracting global wine market to reflect modest value growth in 2024, Wines of South Africa (WoSA) CEO Siobhan Thompson has said.

South Africa export sector has come up against several hurdles of late. This includes an ongoing decline in global wine consumption, which has been exacerbated over the past year by mounting geopolitical tensions and inflation continuing to erode disposable income. The threat of looming tariff wars are also an ongoing concern. WoSA singles this out, pointing to their potential impact on austerity in consumer spending.

Nevertheless, things steadied somewhat for the major exporter in 2024.

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Thompson confirmed that, year-on-year, total export sales comprising both packaged and bulk wines rose 4% in value in 2024, worth a total of US$562m. This was on virtually unchanged volumes of 306.2 million litres.

Once extrapolated, packaged at source wine sales reveal an increase of 4% in value to US$430m (123.4 million litres, +5%), while bulk sales grew 6% to US$132m via lower volumes of 182.8 million litres (-3%).

Returning to the topic of global wine consumption, ongoing declines have had a demonstrable impact on the South African wine industry in recent years. The figure dropped 10% between 2008 and 2023, according to the OIV, while per capita consumption in the UK – South Africa’s biggest market – peaked in 2009. In the US, the world’s biggest wine market by value, per capita consumption has declined since 2017.

Thompson explained: “There is no denying that many South African producers have been knocked by the shrinking global wine market. Some wines at the higher end of the spectrum with offerings strategically tailored to their specific markets, backed by strong distribution and regular in-market visits, have flourished. Progressive, adaptable producers creating fresh, vibrant, finessed wines and those with a strong brand offering have also reported positively.”

Thompson also noted the growth in South Africa’s packaged wines, which are “critical to reputational enhancement”, in several key markets such as the Netherlands, Canada and Japan. In Africa, these are led by Tanzania, Zambia, Ghana and Mozambique.

Meanwhile, good cultivar-led growth in the bulk market has come from Chardonnay, Sauvignon Blanc, Chenin Blanc, Shiraz, Pinotage and Merlot, which were among the standout performers. Historically, the ‘dry white’ or ‘dry red’ categories have been the biggest contributors to bulk sales.

“Still, we see the search for specific varieties over generic red or white as a move towards greater discernment in demand with the potential to attract better prices,” Thompson said.

Rico Basson, CEO of South Africa Wine, added: “The ability to stay on course despite the ongoing headwinds that have strained the financial performance should not be underestimated. The South African wine sector has experienced two consecutive small harvests coupled with structural downward adjustments in both the national vineyard and total production. Still, we are planting wiser, enhancing our climate resilience, introducing more drought-resistant varieties.

“The industry has an optimal stock-to-sales ratio as we move into the 2025 harvest. This bodes well for both the domestic (60% of volume) and export (40% of volume) markets. We continue to be celebrated for quality. There’s a lot to be proud of.”

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