Despite a 5% decrease in export volumes, the South African wine industry remains steadfast in its journey towards recovery post-pandemic. Encouragingly, the export value has only experienced a slight decline of 2.4%, and when considering the Rand per litre, there has been a marginal growth. This positive trend comes as wine producers navigate challenges like rising costs, shipping complexities, and shortages in packaging supplies.
In 2022, a total of 368.8 million litres of wine were exported, which is around 20 million litres less than the previous year. The total export value for these shipments was R9.9 billion Rand, down from R10.2 billion in 2021. This decline can largely be attributed to shipping difficulties at the Cape Town port, particularly due to prolonged adverse weather conditions in April 2022 and a two-week strike by port workers in October.
Despite these challenges, the price per litre increased by 2.2%, largely bolstered by a 5.3% rise in bulk Rand per litre. This progress aligns with the industry’s aim towards premiumization in both packaged and bulk wine sectors. While bulk wine constitutes 62% of total export volumes, packaged wine contributes significantly more in terms of value at 77%.
The UK, the largest export market for South African wine, continued to exhibit growth with a 5% increase in volume. This growth was driven by higher-priced bulk exports, resulting in an 8% rise in Rand per litre.
In contrast, the Chinese market, which had previously shown substantial growth for South African wine, experienced a slowdown due to extensive lockdown measures imposed by the Chinese government. This led to a 26% decline in total export value and a 38% decrease in volumes.
The second-largest market, Germany, witnessed a decline of 17% in value and 9% in volume. Factors contributing to this decline include rising inflation and living costs, coupled with a trend of favoring local wines to support domestic producers. The absence of tourism to South Africa also played a role, although the resumption of global travel is expected to remedy this situation.
Export performance within Africa is noteworthy both in terms of volume and value. The African continent continues to offer significant opportunities for South African wine, especially with the potential of the African Continent Free Trade Agreement (AfCFTA) to open doors in specific countries.
Siobhan Thompson, CEO of WoSA, acknowledges the challenges faced in 2022 but highlights the growing reputation of South African wine globally, with various awards and accolades received. The success of CapeWine2022, a premier industry event, also bodes well for exports in 2023.
Rico Basson, MD of Vinpro, commends South African producers and exporters for their responsible approach to marketing amidst the challenges. Despite cost pressures and supply disruptions, they refrained from short-term discounting, preserving the progress made in repositioning South African wines over the years.
Please view the infographic for more information pertaining to 2022 exports.
