Despite flat export volumes and a contracting global wine market, South African wine recorded a 4% year-on-year increase in export sales to $562m (R10.3bn), but industry experts warn of potential pitfalls including constrained consumer spending and the US ramping up global trade wars.
Globally, consumption trends have declined year on year, due to a number of factors including the economic downturn, health concerns surrounding the consumption of alcohol and geopolitical instability. There are also fears that the US may review the African Growth & Opportunity Act (Agoa), which expires in September.
Agoa gives 30 African nations preferential access to US markets. Wine is on the Agoa product list and, according to industry body, Vinpro, in 2024 South African wine producers exported about 11.5ML of wine to the US at a total value of almost R659m. “This could equate to a tax benefit of R20.6m in 2024, assuming all South African wine imports used the tax relief.”
Vinpro represents 2,500 South African wine producers, cellars and industry stakeholders,
The US ranks as the fourth-largest export market for South African wine overall and the third-largest for packaged wine.
According to a report by the International Organisation for Vine and Wine (OIV)) on the world wine production outlook, 2024 was a re-run of 2023, with a range of weather events affecting wine production volumes around the globe, exacerbated by economic and market circumstances.
The South African harvest faced multiple challenges, including frost, heavy winter rainfall, floods and high winds. Extreme flooding in the Western Cape, estimated as a one-in-200-year event, alongside elevated disease pressure in certain areas, contributed significantly to the overall lower volume, the report stated.
Rico Basson, South Africa Wine CEO, said climate variability and economic pressures continue to shape the global wine industry. While South Africa has not been immune to these challenges, “our industry remains resilient, leveraging innovation and sustainable practices to mitigate the impact of extreme weather”.
“Despite a slightly lower global production figure, South African wine producers continue to focus on quality, reinforcing our position as a competitive player in international markets.”
South Africa is the world's seventh largest wine producer, producing about 4% of the world’s wine. The wine industry contributes more than R56.5bn to the country’s GDP and employs 270,364 people across the value chain, of whom 85,962 work on farms and cellars. The sector exports to 110 countries across the world.
Vinpro said 2024’s harvest season was a “true test” of the local wine industry's resilience. Excellent winter conditions in most wine-grape growing regions raised high expectations for the harvest. However, the most significant impact of the spring conditions was prolonged wet soils, which directly affected root systems. “The summer trend was markedly warmer and drier than the previous year, adding another layer of complexity to the harvest.”
The 2024 grape harvest yielded 1,099,051t from 87,848ha, a 7% decrease from 2023, according to the latest harvest estimate by industry body SA Wine Industry Information and Systems (Sawis).
This, combined with strong market demand, led to the industry’s wine stock levels reaching equilibrium — “a significant achievement compared to some of our competitors, who are still grappling with a wine surplus and having to resort to drastic measures such as uprooting vineyards. While the lower volumes imply considerable cost pressure to wine producers, it also serves the sector's commitment to ensuring value growth across markets,” said Vinpro.
OIV said wine consumption had declined by 10% from 2008 to 2023, with significant decreases in key markets such as the UK and the US. Rising geopolitical tensions and inflation have further strained consumer spending.
The resilience of South African wine producers in an era of declining global consumption is also highlighting their adaptability and innovation
— Vinpro
“The resilience of South African wine producers in an era of declining global consumption is also highlighting their adaptability and innovation. Through smarter planting strategies that include drought-resistant varieties, enhanced climate resilience, and maintaining an optimal stock-to-sales ratio, we firmly believe the industry is well-positioned as it approaches the 2025 harvest,” said Vinpro.
Siobhan Thompson, Wines of South Africa CEO, said the industry acknowledged the challenging global economic landscape, which was “characterised by potential tariff wars and constrained consumer spending. But, despite these obstacles, we should focus on strategically positioning our wine export sector to capitalise on market opportunities”.
Export volumes for sparkling wine referred to as Cap Classique, were “very healthy” with double digit growth of 19%, said Pieter Ferreira, chair of the Cap Classique Association, which represents brands such as Graham Beck, Krone, Simonsig and Pongracz.
“Cap Classique remains a growth category, but the world economy and a general decline in wine consumption/capita, could slow down our growth. I know champagne sales were down by 10% last year, but this could be related to the economy and Cap Classique offers a quality alternative at a more affordable price,” said Jeff Grier, co-founder of family-owned Villiera Wines.
Cap Classique production is currently just over 11-million bottles. The top export market for Cap Classique brands is the UK, with growth of 13% in value to R126.3m, followed by the Netherlands, which recorded a 103% rise in export value growth to R46m. The US came in third at 3% growth to R45m. In Africa, Mauritius was the top market for Cap Classique products, with growth of 93% to R7.6m. Tanzania, which came in at 17th place, bought Cap Classique products worth R3.6m, up 24%.
Ferreira said the market — local and international — “is tough. There is pressure on sales”.
However, he said, the industry's outlook for 2025 was “very positive. We all remain bullish and just have to be boxing cleverer. Harvest prediction looking good and we should be done with harvest by middle February”.
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.