Import Market  Overall, the German import market for wine showed a decline of 1.4% to 14,962 million Hl mainly because of shifts in the bulk wine sector. Based on the German import market statistics, South Africa remains the strongest supplier of imported New World wines with imports climbing 1.2% to almost 84.5 million litres in 2015. Meanwhile, Chile increased their exports to Germany by 6.4% to 53.9 million litres. Australia climbed by almost 13.2% to 44 million litres, while the United States dropped 1.1% in volume to 49.3 million litres, but saw revenues climbing by 8.4%. Among the top 3 countries (Italy, France, and Spain) Spain was the only country gaining market share (+8.8%) and exported 382.4 million litres to Germany in 2015. Spain’s overcapacity, resulting from the massive harvests in recent years, has put price pressure on all suppliers.

The German wine consumers drink better than ever  The good news from the German wine market is that “German consumers are eating and drinking better than ever”, says Professor Hoffman at the Meininger Wine Business Conference held before ProWein 2016. At the same time, the experienced market researcher from the University of Geisenheim states that the current average price of €2.20 for a bottle of wine, as recently published by the GfK, provides a distorted picture. Consumers who buy directly from growers pay on average €4.20 per bottle, but that class of consumers is not taken into account by GfK. Professor Hoffmann: “For German consumers, it’s not the price alone that drives the decision to purchase, but instead the quality and good taste.”

There has apparently been considerable “trading up” in Germany and food retailers are offering a wider range of higher quality wines than ever before. Even the discounters have significantly upgraded their wine selections. Wine departments at shops like EDEKA and REWE are comparable to modern specialist shops, but buyers generally buy their wines at the grocers without the benefit of consultation. “The more well known a wine, the better its chances of selling”, says Professor Hoffmann. Those who want to achieve a higher selling price on the German market need to present and to communicate a credible justification for the added value they are claiming for their product.   Producers who want to achieve higher prices in the German market need to distinguish themselves by adding “face value”  because their story and ambition offer the potential to distinguish them from their competitors.

The opportunities for value growth in the German wine market are very much based on selling something different and unique. It is not just about the wine, it is rather the question ‘what is special and why should a consumer try and buy this wine’. German wine connoisseurs are willing to spend more on wine provided they are engaged with by the brands and importers; one importer states “We sell the more expensive wines, just by boosting the opportunities to let customers experience the core of a brand/wine and its narratives.” The ideal would be for every consumer to visit South Africa and connect with the vibrant heartbeat of the winelands  but events like the WOSA Sommelier Cup and the “Südafrika Weinshow”, 4th of September in Frankfurt are ideal platforms to share the dynamics, the passion, and the endless unique stories – plus, of course, the amazingly great wines.

Petra Mayer, Wines of South Africa - Germany

Market Trends
After participation at a successful Cru Bio in Amsterdam in March 2016, it is evident that organic wine is still a growing category in the market – and is expected to continue increasing.

The Comité Européen des Entreprises Vins (CEEV) is currently looking into a new law where all ingredients have to be listed on a wine label – if this is passed then this will also affect labelling in The Netherlands.

The ‘less but better’ consumption mantra is something that will be repeatedly used in trade circles in the next few years.  Read more at http://www.decanter.com/wine-news/key-world-wine-consumption-trends-vinexpo-291224/#hFGgxdz1JdHECid1.99 – taken from a Decanter article which was circulated in the last KVNW newsletter. This ties in with the Dutch KVNW “Wim over Wijn” campaign encouraging less alcohol consumption – but better wines.

Meininger’s (April edition) have published an article “Retailers  in The Netherlands” by Cees van Casteren and is worth the read to get an updated  insight into the Dutch market

Ethical Trade is still an important issue in the Netherlands for retailers. Membership of an accredited ethical trade organisations is increasingly required as prerequisite to supply wine to the market. The KVNW (Royal Dutch Importer Association) requested a presentation from WOSA on ethical trade at their last meeting at the SA Embassy in The Hague as this is an important part of their trading philosophy.

Jacqueline Snoeker (former sourcing director for Ahold) has started her own consultancy business: Vinergy – www.vinergy.nl . Producers looking for advice on how to sharpen their retail strategy in The Netherlands can contact her – she has years of experience in the market.

Upcoming Events:

World Bulk Wine Exhibition -,  21 – 22 November 2016

South Africa Tasting, 9 May 2016  -  The tables for the WOSA generic tasting on May 9th sold out within 2 days. Importers are keen to showcase their South African wines and are still adding new listings. We are looking into repeating the event on a bigger scale in 2017 if there is sufficient interest.

Wines of South Africa Sommelier Cup semi-final, 9 May 2016 – on the same day as the generic tasting, the Netherlands Sommelier Cup semi-final is taking place.  This year we have 20 high profile sommeliers registered for the competition.  #CapeSomm

Wine Professional, 9 – 11 January 2017 –  After successful participation in the 2016 edition of the biggest wine trade show in The Netherlands, Wines of South Africa is taking a bigger stand to have a stronger presence at this event in Amsterdam. The categories for entering are Interesting Terroir, Unusual Suspects, Cap Classique (MCC) and Organics.  The cost for participating is Euro 380 per wine. The aim is to have 16 wines on the stand. The main target audience at this event is the on-trade.  The selected wines should have distribution in the traditional channels in the Netherlands.  Producers in these categories looking for representation are also welcome to enter.

Sara Channell, Wines of South Africa - Netherlands

South Africa is still struggling with volume market share in Sweden, but it seems we can expect some growth in the value segment.

During the first quarter of 2016, we can see that Italy´s growth is beginning to slow down. Between January and March, they only had a small overall growth of 2,9%. With regard to red wines, the growth was 0,3%. South Africa is still in decline with -8,3% and France went up to 9,2%. South Africa is dominating the white wine market with 20,1% even though we had a loss of market share in that segment of -6,7%

We can definitely see a growth in interest in South Africa as a country with a number of wine-related tourism articles coming out. Here is one example with a Braai theme:
http://www.flipsnack.com/5976566BDC9/food-inc-magazine-1-2016.html?b=1&p=1

In terms of activities in the beginning of 2016, WOSA have been involved in a number of activities.

Platter 5-star tasting, 18 January 2016
In the beginning of the year, WOSA organised an exclusive tasting featuring Platter 5 star wines. The aim of this tasting was to showcase the top wines that South Africa produces. We had a great turnout and interest in the wines was fantastic. At the end, we had 28 top sommeliers and media attending the event and the feedback was great.

Stockholm Wine Fair
In February WOSA hosted a “sustainable wine bar” at the Stockholm Wine Fair. We asked the importers for support and got around 20 wines to show, all connected to the theme “Sustainable”. We showed wines that are Fairtrade and WIETA certified, we had organic and biodynamic wines present and one Black Owned Brand. Over the weekend, we had 500 people tasting our wines and we also hosted a seminar on the topic. This was a user-pay event.

National Day Celebration, 30 April 2016
On the 30th of April, WOSA celebrated South Africa´s National Day together with the Embassy. We teamed up with three importers to supply the wines for the event for approximately 250 guests.

Sydafrikanska Vinsalongen, 9 May 2016
This is the name of the South African Generic Tasting that takes place on the 9th of May in Stockholm. The interest has been massive and we currently have a fully booked show with over 250 wines. We will also showcase a smaller number of “New Wave” wines, supplied by the producers. The consumer tickets are all sold out which is an all time record! #sydafrikanskavinsalongen

WOSA Sommelier Cup, 9 May 2016
The Swedish round will take place on the same day as the generic tasting. We currently have 9 participants and they will compete against each other in a theoretical test and blind tasting. Please follow the event under #Capesomm

Maja Berthas, Wines of South Africa - Sweden

In the UK off trade South African wine saw a slight decline in 2015, largely driven by our main brands losing SKUs in the multiple grocers’ range reductions - with all but Australia in the top five countries seeing a fall. Aldi and Lidl are both growing market share in the wine sector and it is safe to assume that some of the decline is due to shoppers moving to these retailers, which are not tracked by AC Nielsen. Combined these two retailers have 10 per cent of the UK grocery market. Aldi is moving into online wine retailing and Lidl has just launched a new wine promotion strategy. There are around 180 planning applications in the pipeline for Aldi and Lidl stores.

South Africa is performing well in the online, independent and specialist sectors, where there are the opportunities to sell premium wines to interested consumers. There is still a great deal of interest in South African wines in the UK market and much positive rhetoric about the quality of our wines. Two recent articles from Fiona Beckett in The Guardian ran after she visited South Africa in January.

http://www.theguardian.com/lifeandstyle/2016/feb/18/south-african-red-wine-review-pinotage-swartland?CMP=share_btn_tw

http://www.theguardian.com/lifeandstyle/2016/feb/18/south-africa-white-wine-new-wave-fiona-beckett

The export performance in 2015 saw a drop in volume to the UK, by 1.8 percent, which was offset by an increase in value of 5.2 percent. Exchange rates aside, this trend would indicate that the UK market is paying more for South African wines and buying more premium wines. Rand per litre growth in UK exports was up 17.64 percent.

There is acknowledgement in the UK’s commentary of South Africa that the country has an incredible image for its wines and the next challenge for the industry is turning that positivity into sales, especially in the mid-tier where South Africa has under-traded. Feedback from a recent article written by Andrew Catchpole in Harpers, suggests that there is interest from UK buyers in better South African wines from the larger producers, which is an encouraging sign. We have seen interest in top end South Africa increase exponentially but selling higher volumes of premium wines would significantly alter the shape of the category in the UK, going forward.

According to a recent Wine Intelligence study more UK consumers are spending £6 or more on a bottle of wine. 36 per cent of regular wine drinkers spend £6 or more, compared to 24 per cent in 2013. 25 per cent of UK consumers say they will spend more than £10 on wine as a gift, compared to 16 per cent in 2013. Wine Intelligence said that the ‘feel good’ factor in the UK’s economy meant that wine drinkers were spending more.
Wines of South Africa will hold the UK round of the 2016 Sommelier Cup at 67 Pall Mall on 13th June. There are many high profile sommeliers already signed up to participate. If you would like the opportunity to show your wines to this prestigious group please email claudia@winesofsa.com.

On 8th September 2016, Wines of South Africa will run a UK trade tasting event, Intrepid South Africa. This event has already got over 100 producers signed up but there is still space available. Please contact Lesley@wosa.co.za if you would like to exhibit at the event. More details at http://www.wosa.co.za/Intrepid/Home/

For more information about the UK and the activities in the market contact Jo Wehring, UK market manager: jo@winesofsa.com