Selling South African (RSA) Wines Overseas

One can grow the greatest grapes, and make the greatest wine, but ultimately the wine must be sold, drunk, appreciated, and hopefully more of it purchased. While we have been making surprisingly good headway in getting the Silkbush brand established in South Africa and some adjoining countries, we don’t anticipate such sales to ever approach the level possible in certain major foreign markets. Under the guidance of and with the exceptional business relationships developed by our lead US importer, Ms. Selena Cuffe, we are starting, finally, to get some recognition and sales in major US markets, especially New York and Illinois. However, our shipments to the US have been in multiple pallet loads (56-70 cases of 12 bottles); in August 2017 we will bring in our first full container, of 700 9 liter cases.

Since 1994, RSA wine quality has risen quite steadily to very high levels. Extensive replanting of vineyards has taken place, and wine making technology and training has improved dramatically. Accordingly, the acceptance, and more recently, the sustained accolades of the international wine journalist community have been attained. Despite these achievements, the penetration of foreign wine markets with consumer sales of RSA branded wines has not kept pace. In the US, bottled RSA wine sales have remained at approximately 1 million cases/year for over 10 years, while the total USA wine market continues to grow, presently more than 399 million cases per year, including sparkling wine, and that over 14% alcohol. Annual US wine sales growth, however, has slowed to about 2.5% to 3%+ in recent years, which does not make things easier and many more US wineries are created annually. (Total US wineries, which exist in all 50 states, is fast approaching 10,000.) With more US producers in the market every year, and extensive local promotional efforts by US wineries, many large US grocery store chains no longer carry any selections from RSA; retail distribution has shrunk in numerous areas. Imported wines constitute 33% of US wine sales, but clearly those sales proceeds are largely going to other wine producing regions of the world. (RSA wine share of US market is a meager 1/4 of 1%!)

In general, there are three significant stumbling blocks for all imported wines in the US. The bureaucratic and legal issues that all wineries, be they domestic or foreign, have in attempting to gain market share in the US are relatively well known. The first, and very significant hurdle, is that the 21st Constitutional Amendment (in 1933) permitted each US State to establish its own rules and regulations for the sale of alcoholic beverages. This ugly stepchild of the repeal of Prohibition and then widespread religious antipathy to “demon rum,” created a legal compliance nightmare that continues up to the present. What is legal in one state may represent a felony in another, and small producers, in attempting to comply with the labyrinth of multiple state rules, often find it prohibitively expensive and time consuming. The second hurdle is the ever-consolidating distribution system of interstate wholesalers. Some thirty years ago there were almost as many US distributors as wineries; now there are about 10,000 domestic wineries and little more than 300 distributors. And fewer than 10 giant wholesalers sell over 90% of the bottled wine in the US! Obtaining attention of capable distributors is very difficult for all wineries.

Thirdly, the advantage of having a depreciated Rand, when pricing export wines, is not helpful when it comes to the expense of personnel required to represent RSA wines in the US. Any continuing promotional marketing programs (while funded in Rand but paid in Dollars) must be well thought out and justified. Further still, maintaining a RSA wine sales presence sufficient to sell in the US is no easy undertaking. New York is seven time zones to the west of Cape Town, and 40 degrees north of the Equator, versus 33 degrees south for Cape Town. Almost all Cape producers must fly to Jo’berg to get a nonstop flight to New York or Atlanta; the minimum travel time of 24 hours, just to the US eastcoast, and resulting jet lag impacts are very real. (The author can attest to this as he has made close to 40 round trips over the past 23 years from the US to RSA.) Accordingly, since few producers want to make the expensive and exhausting trip (and recovery) more than once a year, if that, relatively few RSA wineries have a personal presence in the US. Therefore, “Brand South Africa,” the overall presence of all RSA wineries in the US is limited.

Because we do not anticipate significant change, if any, in these conditions, we do not hold much hope for increased RSA wine sales in the US wine market (albeit the largest in the world) for many years.

Nevertheless, the purpose of this wide-ranging discussion is not to dwell on the marginalized role of RSA wine in the US wine market, but also to observe on some alternatives for selling more RSA wine in other foreign markets. We will address these market potentials as we continue this series.

New Silkbush Accolades!

As our friends in Texas oft say, “If you are telling the truth, you ain’t bragging!” So on that note, we want to brag, er, tell the truth about our recently released Silkbush wines. Below are the two recent accolades our Silkbush wines have received in South Africa. Further, I would like to expand on our recent Michelangelo awards a bit.

  1. This 20-year-old Michelangelo International Wine Awards competition is the largest, most competitive in South Africa. This year, there were 1,829 entries. Silkbush entered just three wines: Viognier, Sauvignon Blanc, and our proprietary red blend, Altitude and gold medaled with two of them.
  2. We don’t know how many Viognier entries there were but six other highly regarded wineries entered wines that won three Golds and three Silvers. These included the Saronsberg, Anura, and Lourensford cellars. But Silkbush beat them all with our Double Gold Viognier!
  3. Our Sauvignon Blanc received a Gold Medal, one of 271 given out, representing under 15% of the total entries in the competition. Certainly all Gold winners were highly deserving, as virtually no wineries enter ordinary wines since the competition is known for being highly competitive, and 75% of the judges are wine experts from overseas. (No hometown favoritism!)
  4. Altitude, our red blend, while a terrific wine, in my opinion is perhaps a young A- today, composed of five 2014 vintage red cultivars, and was competing against a great many excellent red wines of older vintages. Give it another year, and we expect it to be a sold A, Gold Medal qualifier, if not better.
  5. Lastly, while we did not enter our excellent Pinotage, the Flagstone 2014 Writer’s Block Pinotage was one of 18 Platinum winners, requiring a score of at least 96. For the past 12 years, Flagstone Writer’s Block Pinotage has come from 100% Silkbush grapes, and almost always is chosen as one of the Absa Top Ten Pinotages. The other championship awards for this wine in other competitions are manifold, and a record of which honestly few other wineries can only dream.
  6. Silkbush Pinotage is a superb wine, normally priced at retail at about 50% that of Writer’s Block. However, we will likely import the Pinotage only when we know we have retail demand for commercial quantities. Sadly, the US wine market for Pinotage is still in its early stages, no matter how high the quality.

 

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Viognier… Deep in the Heart of Texas!

Noted Texas Winemaker, Kim McPherson
Noted Texas Winemaker, Kim McPherson

As expressed in my earlier blog post about Texas Hill Country wineries, my growing curiosity had been triggered largely because of the relatively recent adoption of warmer weather grapes by Texans. These wines from lesser known grapes (to most Americans) have usually reposed in the “Imports” section of the local wine shops and liquor stores, and have drawn little attention. The varieties were known chiefly to consumers with advanced knowledge of wines from Spain, Italy, and the Rhone Valley of France. The unsurprising and honest truth is few Americans take a chance on buying a bottle of wine they have never tasted. Fortunately, the growing proliferation of TX wineries and their tasting facilities are introducing many, even many experienced, American wine drinkers, to new (to them) wines. This enables Texan winemakers to make a “hands-on” differentiated presentation with grapes uniquely suited for their warmer weather. Everybody becomes a winner, as happier Texan wine drinkers become advocates/ambassadors for reds such Tempranillos, Riojas, and some delicious whites such as Viognier.

We are especially pleased they are starting to champion Viognier, as it is one of the few white grapes we also grow and produce on Silkbush in the Cape. But even in South Africa, Viognier is just becoming known as a superior white wine, far behind the historically dominant Chenin Blanc and the most recently very popular Sauvignon Blanc and rising Chardonnay. [Actual Viognier planted RSA acreage is only 2,144 acres, or 7th most popular white.] Most Viogniers are intended to be consumed young. Viogniers more than three years old tend to lose many of the floral aromas that make this wine unique.

Like many grapes, the origin of the Viognier grape is unknown; it is presumed to be an ancient grape, possibly originating in Dalmatia (present day Croatia) and then brought to Rhône by the Romans. Once common in France, by 1965, the grape was almost extinct as there were only somewhere between eight and 30 acres remaining in the Northern Rhône. This may have been due to Viognier at times being a difficult grape to grow because it is prone to powdery mildew. Its decline also reportedly has much to do with the inadvertent and disastrous introduction of phylloxera aphids from North America into Europe in the mid- and late-19th century, followed by the abandonment of many vineyards due to the chaos of World War I. In France, Viognier is the single permitted grape variety in the Rhône appellations of Condrieu and Chateau Grillet which are located on the west bank of the Rhone River, about 40 km south of Lyon.

Viognier prefers warmer environments and a long growing season; it has low and unpredictable yields and should be picked only when fully ripe. When picked too early, the grape fails to develop the full extent of its aromas and tastes. In the Cote-Rotie AOC of France, red wine blends can include up to 20% of Viognier though most growers add no more than 5%. Since Viognier ripens earlier than Syrah, the grape is normally harvested separately and added to the Syrah during fermentation. One of the benefits of adding Viognier is that the process of co-pigmentation stabilizes the coloring of the red wine. Since the late 1980s, plantings of Viognier in the US, Canada, and elsewhere have increased dramatically. California’s Central Coast is the leading producer with over 2,000 acres of the grape planted. Californian Viogniers are noticeably higher in alcohol compared to other wines made from the grape. It has also received international attention growing in Virginia, and in 2011 was named Virginia’s signature white grape.

So much for the lecture on Viognier’s history… What does the wine taste like in Texas? Pretty damn good is our overall summary and perhaps much more consistent in taste, if not better, compared to our experience in Virginia. Here are some of the ones we liked the best:

 

2014 Pedernales Cellars Reserve Viognier $40 Stonewall, TX Likely the most impressive, and certainly the most expensive Viognier we tried; it reflects skilful use of oak. Pedernales has a wonderful tasting facility with great, sweeping views. www.PedernalesCellars.com

 

2014 Bending Branch Winery Viognier $34 Comfort, TX (First release of Viognier) Bending Branch is perhaps the closest actual winery to San Antonio, just a bit SW of Fredericksburg, and off I-10 a few miles. Very pretty. Definitely a cutting edge winery now also making wines for other TX wineries. Their Italian mobile “flash détente” machine has to be seen to be believed.  About 12,000 cases/year. www.bendingbranchwinery.com

 

2014 Kuhlman Cellars Viognier $27, Stonewall, TX Very attractive and well arranged pairing of small servings to complement their wines. Jennifer Beckmann, Marketing Director, really knows what she is doing. www.KuhlmanCellars.com

 

2014 Becker Reserve Viognier $22 Stonewall, TX Becker is one of the largest TX wineries, with current production in excess of 100,000 cases/year. Always a pleasure to visit with a very wide range of wines available. www.beckervineyards.com

 

2014 McPherson, Viognier, $16 Lubbock, TX; ALC13.9% Fermented entirely in stainless steel. (1600 cases produced) www.mcphersoncellars.com

 

2014 Brennan, Reserve Viognier, $25 Comanche, TX ALC 14.5% www.brennanvineyards.com

 

Note: The McPherson and Brennan wineries are located in “way out west Texas” but share a large comfortable tasting room with another winery at 4.0 Cellars near Fredericksburg on Highway 290. Both their Viogniers were lovely wines. www.fourpointwine.com

Because we grow, produce, and import Silkbush Viognier to the US, we were not compelled to stock up on the Texas wines. However, we purchased four of the less expensive wines and have enjoyed them. Our Silkbush Viognier normally retails in the $15-$18/bottle range, and we think any well made Viognier may find widespread acceptance in the US in this range. (We note the Horton Viognier from VA is nationally available at $16 from Total Wines.) Nevertheless, the $40 Pedernales Reserve wine, if you can find it, is definitely worth a Special Splurge sometime.

But above all else, Texas is now making some very nice and worthwhile white wine, lead by Viognier. Once you have had enough of UT or A&M football, enough San Antonio River Walks, and almost enough Austin City Limits country music, get out and do some winery touring. You’ll be glad you did, and definitely check out the Viogniers. They will only get better as the years go by; the French say the vines need to be 15-20 years old to really hit their prime and they should know!

Texas Hill Country Wineries

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Texas AVA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

While I have been visiting South Central Texas regularly (some 35 years now), my personal experience with the “Texas Wine Country” has been quite limited. San Antonio friends have told me since 1980 that wine grapes were being grown out in the Lubbock desert area, but their early bottled wine efforts I tasted were not very impressive. (Mediocre, would almost be too kind…) But in the last 10-15 years, evidently, things had started to improve a bit, and I visited two TX wineries west of Austin around then. Much better wine, yet nothing to scare us NorCal grape growers.

Recently, however, things have changed quite a bit, all for the better. A friend from Austin, Alissa Leehner, the noted SAHMilier blogger, and some favorable newspaper reviews whetted my curiosity: have Texans really started to make some wine worth drinking, and even start buying? Then I heard that a goodly number of wineries in the Texas Hill County (W/SW of Austin and N/NW of San Antonio) were producing some decent Viogniers, a white grape originally from the Rhone river valley area of France. The Rhone, in SW France, is generally a much warmer grape growing area than Bordeaux or Burgundy; aahah, the Texans were finally catching on, and planting grapes from that region, as well as varieties from Spain and Italy, in general also warmer weather grape regions. Since our South African vineyard, Silkbush, while 93% a red grape producer, has started to grow and produce Viognier, my curiosity increased: we must see for ourselves what was going on in the Lone Star state.

Accordingly, a San Antonio friend who also enjoys wine, but who was not a local winery visitor, and I set out on a November Sunday and generally headed NW on Interstate 10 for Fredericksburg and thence East on Highway 290. While we made an initial stop in Comfort to visit the first cellar (about an hour from San Antonio), most of the wineries we saw were along Hwy 290 and about 1.5 hours from SA. San Antonio is a big convention city, and it is likely tours of the wineries in the area we visited will become increasingly popular. That understood, Austin is perhaps the most efficient “jumping off” point for TX wine touring as the vast bulk of the wineries are within an hour’s drive west of Austin.

The Hill Country has been a popular TX recreational area for many years; there are many small ranches accommodating visitors, lots of upscale homes and restaurants, and it is a generally very attractive area visit. The driving distances are comparable to those of Napa and Sonoma from San Francisco, so as more Texans start drinking better wine, and want to learn more about their home state’s wine efforts, wine touring year round will increase markedly.

There are some constraints, however, which need to be addressed straight off. First, the reportedly 46 TX Hill Country wineries are strewn about in a very large area; we heard there are at least 50% more venues with applications into the State. (There are over 350 TX wineries over the very large state.) Visiting a representative number in any “sub area” of the Hill Country is going to take the better part of a week, so careful pre-planning of your visit(s) is mandatory. The Texas Hill Country Wineries Guide & Map we picked up along the way was very helpful, but directing prospective visitors to first visit www.TexasWineTrail.com will assist in planning. Trying to visit more than four cellars per day is probably undoable for most, and even hitting four can make it a bit of a drill. If the driving distances between stops is very long, a lot of the fun of the adventure starts to go out of the outing.

Secondly, many TX wineries now require appointments and a $15 tasting fee; these are arranged in advance on relatively sophisticated websites. This is somewhat a positive as it will keep the tasting rooms from being overcrowded and provide for a better visitor experience. (We speak from personal experience in NorCal, where tasting rooms often are overcrowded on summer and fall weekends, and tasting charges are often much higher, especially in Napa.)

Thirdly, you are not going to see many acres of vineyards as you do in most other wine growing areas of the US and the rest of the world. Most of the over 9,000 acres of TX vineyards are still located south of Lubbock, or some five hours west. The growing conditions in near desert conditions, with chilly nights and warm days, and low risk of grape pests, means the best grapes will largely be too far away to visit. Some vineyards are planted in the Hill Country, but reportedly most of these vines are frankly intended to serve as simply amenities for their winery tasting rooms.

Nevertheless, neither driving distances nor lack of vineyards is a fatal flaw, but wine tourists should be aware of this in advance. In a sense, this sort of reminded me of our visit to Mendoza, Argentina, in 2008. I had researched about a dozen winery websites in advance, contacted them all via email, and had been warmly invited to visit by almost all of them. On the websites, I had noticed mainly photos of stylish, relatively new wineries, and then photos of the impressive, ever present Andes Mountains in the distance. However, there were relatively few shots of vineyards and surrounding area shots, which are rather standard for the 1,000 of so wineries in Napa and Sonoma. When we got there, there were vineyards adjacent to the wineries, but when they ended, it was almost all DESERT! Water comes in canals from melting glaciers in the Andes, but it is all carefully measured, and not in any abundance. The TX Hill Country is far prettier than most of the grape growing areas of Greater Mendoza, but visually neither area is as stunning as the Napa Valley, Champagne, or the Winelands of South Africa.

That understood, Texas wineries are fun to visit; I will continue to return with friends for enjoyable days on future TX trips. More significantly, like wine tasting facilities everywhere, they are doing an important role in educating Texans and others about wine, especially the more exotic varieties, teaching wine/food pairings, and generally “demystifying” wine drinking. In general, this will sell more TX wine and create more informed, enthusiastic consumers for wines from elsewhere.

 

Due to the length of the foregoing introduction to visiting TX wineries, we will discuss TX Viognier in a separate blog posting.

High Touch Wine Sales in South Africa

There are three principal wine drinking areas/provinces with significant populations in South Africa: Western Cape (Greater Cape Town environs), Gauteng (Johannesburg/Pretoria), and KwaZulu Natal/KZN (Durban/Pietermaritzburg environs). Since virtually all of the some 600 wineries are located in the Cape, if a winery wants to establish a new brand in the country, it needs to have a sales presence in the other two major regions as well. Further, while Black South Africans are chiefly beer and brandy drinkers, a growing Black middle class (the most successful oft referred to as “Black Diamonds”) in these areas is starting to buy and enjoy wine.


Soweto

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Regina Mundi Catholic Church

After 1886, as you may know, Black South Africans had been drawn to work on the gold mines that were established on the outskirts of Johannesburg and most tribes were housed in separate areas. In 1963, the name Soweto (South Western Townships) was officially adopted for the sprawling township incorporated in 2002 into the Jo’berg city limits. It has been estimated that 40% of Johannesburg’s residents live in Soweto, approximately 1.3 million people. In Soweto, there is a famous Memorial to the founding of the ANC (African National Congress) which is the political party of the late Nelson Mandela and has been the dominant party of the country since 1994.

 

 

 

church-soweto

Mr. Sipho Thoma
Mr. Sipho Thoma

Two years ago, I spent a day in Soweto as a guest of one of the four founders of the Soweto Wine Club to learn more about the area’s potential. Sipho Thomo was my guide and he opened my eyes to a very large, proud, well kept, and increasingly cohesive community. While all eleven of the country’s official languages are spoken in Soweto, historically the tribes did not get along. But since English has become the predominant language for all in the past few decades, a far greater degree of homogenization has occurred and English is the language of the wine trade. There are a number of fine wine shops with good selections in Soweto, chiefly for wineries who have taken the time to call upon them. (We visited one called Morara Emporium, owned by Mnikelo, the co-founder of the Soweto Wine Festival.) There are a few restaurants who carry superior wines and who periodically sponsor wine tastings, (such as Wandi’s Place, with it jovial proprietor in the pink sweater below,) and this year the 11th Annual Soweto Wine Festival will be held.

Clearly, wine drinking in Soweto is established but is still in its early days. Soweto represents a good potential market for SILKBUSH wines once we have a Gauteng distributor with people dedicated on a continuing basis to service the area. The Soweto Wine Club may yet prove to be our entry point to that vibrant community.


Gauteng

SILKBUSH has only had a direct sales rep in Gauteng for a few years and Anton has flown there for some of wine shows. We just started selling our wine in KZN this last year and nobody from SILKBUSH had yet made a physical appearance in Natal.

Accordingly, I decided that the first week of my March 2015 trip to the Beloved Country would be to these areas with our two sales ladies I had yet to meet.

Ms. Judith Lee
Ms. Judith Lee

Our representative for the Gauteng area is Judith Lee, who has represented several RSA wineries for many years. I spent two days with this delightful woman; arriving on a Sunday, our timing was awkward, but we were very successful with a large Portuguese restaurant that had just put us on the menu. Because a bottle never sells itself, it is very helpful when restaurant owners and service staff can put a face with a product and hear the vineyard’s story directly. With the key people, we often offer a couple of free nights at the Kingsbury Cottage; whether they will make it down to see SILKBUSH or not, the offer of hospitality is always appreciated.

 

 

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Salt & Pepper Shakers

We also did an evening tasting as a well- at an established wine club in Pretoria where we and the wines were very well received. Incidentally, one of the pleasant surprises of travel is seeing new and creative art in the least expected places. Here are a few photos from our wine travels-  one is of a “pop top” emulation salt and pepper setting at a trendy RSA restaurant, and two are striking metal sculptures at an outside shopping center.

 

 

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KwaZulu Natal (KZN)

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Sugar Cane Fields

For all the years I have been coming to South Africa, I had returned to Durbin only once since my initial visit in 1994. The whole area is undergoing a great deal of change and growth including building a new airport approximately 35 km (22 mi) north of the city, something that virtually never happens in major urban areas of the world! King Shaka International Airport (KSIA) opened its doors to passengers in May of 2010, just over a month before the start of the 2010 FIFA World Cup. It evidently had been in the planning stages since the mid 1970’s, with construction beginning in 1973, but then things slowed down. While 8 international air carriers now serve KSIA, at present well over 90% of its traffic is still domestic. However, they are now ready for the largest jets from anywhere.

Much of KZN is still developed to sugar cane fields, and banana plantations, and benefits from strong on-shore winds from the warm sea. Accordingly, due to the recreational/agricultural ambiance, there is extensive “second home” and retirement housing being constructed; also many roads are being widened and more elegant living, including wine consumption, is increasing. Little Mozambique, a humble eatery in a small retail center, and the luxurious Prince’s Grant Golf Club, well north of Durban on the Indian Ocean, are both now featuring SILKBUSH wines due to the efforts of Suzanne Foster Aherin, our Gauteng sales representative, who I got to work with on this trip.

Ms. Suzanne Foster Aherin
Ms. Suzanne Foster Aherin

Suzanne had done all sorts of high level corporate work in prior years, in both Jo’berg and Cape Town. In more recent times, however, she was living in Gauteng and doing some wine promotions with her good friend, Judith Lee. Following her new husband who had taken a job as a plant manager in a small town in KZN, in 2014 Suzanne found herself with time on her hands and wanting to get back into wine. Tah Dah! She is now doing a bang up job for us with restaurants, wine shops, golf country clubs, and anywhere else people want higher quality wine for a reasonable price. She and I did an invitational wine tasting at a hotel where we are now on the menu, and then drove around together for three days. Suzanne is lots of fun, very talented and well organized, and has a very good wine palate. It was clear her retail customers really respect and love her.

Prince's Grant Golf Club
Prince’s Grant Golf Club

We entitled this posting as “High Touch” wine sales in South Africa for a reason: selling wine anywhere in the world is a “personal relationship” (High Touch) effort, at least for the first sale. The quality of the wine, and the selling price, clearly are the largest factors in obtaining on-going sales, but to build brands with consumer loyalty requires good marketing people and ongoing contact efforts. We are pleased that many enjoy our Silkbush Mountain Vineyards website, our Blog postings, and reading current reviews of subsequent vintages on the Internet. Certainly we will continue with these High Tech marketing efforts, but the High Touch of good personal sales relationships will never decline in importance… be it in Africa or anywhere else.