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Wine in South Africa

2 / 2016 Annual Quantification Report: Wine in South Africa

Product Definitions

Product Definition

Wine

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 300kPa. 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 (either by 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

Channel Definition

On-Consumption• Includes restaurants, hospitality and pubs. These could be at work or recreational. Examples are quick

service restaurants, full service restaurants, accommodation establishments and sports clubs

Off-Consumption• Sale of beverage for consumption elsewhere, not at point of purchase

• Usually associated with alcoholic beverages


Market Trends

The South African local wine sales saw growth year-on-year during 2015 in terms of volume and value. The

country still produces more wine than can be consumed locally, with the sellers exporting more than half the

volume produced within South Africa. The local market growth may be attributed to new consumers entering

the market in sweet red and rose wine markets. It is believed that the increased marketing and promotional

activities also contributed to the high volume growth. The 3 litre and 5 litre BIB packs are said to be driving

the sweet wine industry as they are cheaper and considered value for money packs compared to the

traditional 750ml glass bottle.

The wine exports declined as the local producers focused on the South African market. The volume of wine

sold in bulk packaging continued to grow, putting pressure on the local packaging industry. The United

Kingdom remained the main export destination followed by Germany. The volume exported to the UK is not

expected to change much during the Brexit period. Other African countries like Angola, Kenya, Mozambique,

Mauritius and Zimbabwe continue to source their wine in South Africa, amongst other countries. The volume

imported by these countries increased from 2014 to 2015 whilst volume exported to Tanzania and Nigeria

declined.

The local regional distribution remained almost the same with Gauteng, KwaZulu-Natal and the Western

Cape showing good growth during the base year. The disposable income in these metropolitan regions is

believed to be above average with consumers able to purchase higher priced products, such as wine.

The channel distribution also remained similar to that of the previous year. The off-consumption channel is

growing in volume with more retail stores increasing their marketing campaigns in order to gain more

customers. Wine products are easily available online where they can be delivered rapidly to their

destination.

The wine market is expected to grow in 2016 but at a lower rate as the drought season affected the crops

planted and the yield expected to be harvested. The industry is expected to recover in the medium term from

the low yield and slow economic growth.


Product Breakdown 2015

94.2%

4.0%1.8%

Natural Wine Fortified Wine Sparkling Wine

Natural wine volumes saw growth during the base year, possible as more variants and brands were

introduced to the market.


Packaging 2015

The larger pack sizes showed higher growth from 2014-2015 driven by the bag-in-box (BIB) pack types in

sweet wine category.

2,4%

11,7%

9,3%

1,2%

0,0% 2,0% 4,0% 6,0% 8,0% 10,0% 12,0% 14,0%

750ml

1 Litre - 3 Litre

4 Litre - 5 Litre

Various


Historical Average Industry Selling Price

7.5

%

3.4

%

8.6

%

7.2

%

7.1

%

6.5

%

5.0

% 5.6

%

5.7

%

6.1

%

4.6

% 5.5

%

1.5

0.6

1.5

1.2

1.5

1.2

0.0

0.2

0.4

0.6

0.8

1.0

1.2

1.4

1.6

1.8

0%

1%

2%

3%

4%

5%

6%

7%

8%

9%

2011 2012 2013 2014 2015 CAGR since 2011

ISP % Change CPI % Change CPI vs Industry Selling Price % Change

The average industry selling price of wine increased by 7.1% compared to CPI of 4.6% during the same

period. The increase in higher selling price wine may have attributed to the high price increase.


Channel Distribution 2015

51.7%

31.8%

16.5%

Export Off-Consumption On-Consumption

The wine industry exported more than half of the wine produced locally. The main export destination was

the United Kingdom and other European countries.


Local Regional Distribution 2015

Excludes Exports

9.9%

5.4%

36.2%

12.2%

6.4%

29.8%

E Cape FS/N Cape Gauteng KwaZulu-Natal Limpopo/NW/Mpum. W Cape

The three major metropolitan regions continue to dominate the wine industry in the local market. It is said

that the above average disposable income levels and new citizens moving to these regions contributed to

the increase in demand for the product. The regions also have an above average number of young adults

who are willing to try new products on the market. The non-metropolitan regions show limited change in

volume distributed.

BMi Solutions


Packaging Annual Beverage Publications

All reports Full Report (All reports below)

• Packaging overview

• Paper & Board

• QPM

• Quarterly Import

Alcoholic Beverages

• Flavoured Alcoholic

Beverages

• Malt Beer

• Sorghum Beer

• Spirits

• Wine

Non Alcoholic Beverages

• Bottled Water

• Carbonated Soft

Drinks

• Cordials and Squash

• Energy Drinks

• Fruit Juice

• Iced Tea

• Mageu

• Sports Drinks

Dairy Beverages

• Dairy Juice Blends

• Drinking Yoghurt

• Flavoured Milk

• Maas

• Milk

BMi Tracking Report Schedule 2016

Annual Food Publications Confectionery & Snacks On Request

• Canned Protein

• Dairy

• Desserts

• F&C Beverages

• Pasta

• Rice

• Wheat and Grain

• Ice Cream

• Packaging of Snack

Foods

• South African

Confectionery Market

• The Impulse Market

in South Africa

• Biscuits and Rusks

• Breakfast Foods

• Baked Products

• Baking Aids

• Eggs

• Fats and Oils

• Frozen and Par-

Baked Products

• Premixes

• Pre-prepared Meals

• Processed Meat

Products

• Protein

• Sauces

• Soup and

Condiments

• Sweet and Savoury

Spreads

• Value Added Meals


Commissioned

Instore

Category

Ranging

Mystery

Shopping

Shopper

Insights

Promotional

Effectiveness

Instore

Compliance

Shelf &

Promotional

Price Surveys

Solutions Consumer

Insights

Shopper

Insights

Business

Insights

Advertising &

Campaign Testing

Omni

Channel

Competitive

Advertising

Tracking

Advertising

Category Quantification

Beverages Food Packaging

Advanced Analytics

Competitive

Pricing Simulation

Statistical

Optimisation

Model60%

Price

Sensitivity

Promotional

Effectiveness

Predictive Analytics

Copyright & Disclaimer

All rights reserved. No part of this publication may be reproduced,

photocopied or transmitted in any form, nor may any part of this

report be distributed to any person not a full-time employee of the

subscriber, without the prior written consent of the consultants.

The subscriber agrees to take all reasonable measures to

safeguard this confidentiality.

Note:

Although great care has been taken to ensure accuracy and

completeness in this project, no legal responsibility can be

accepted by BMi for the information and opinions expressed in

this report.

Copyright © 2016

BMi Research (Pty) Ltd

Reg No. 2008/004751/07

Thank youbmi.co.za

Contact

BMi Research

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2014 annual quantification report - bizcommunity.com · 2016. 11. 15. · 5 / 2016 annual...

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