South Africa: The Old 'New World'

Cost effectiveness is non-existent in a fully competitive market. Quality imperfections can be detected very soon and prices will come down consequently. In contrast, consistently high-quality products will drive prices up gradually. The wine market is fully competitive. Is Bordeaux cost-effective? What about Burgundy? We know the answer precisely.

Does cheap fine wine still exist? Yes of course! And there is only one keyword: time lag. There is time lag between the truth about things and market recognition. When the quality has reached a certain level but the market has not realized it yet due to various factors, cost effectiveness is the result. South Africa is in such a time lag zone.

Picture by Wines of South Africa (WOSA)

Although South Africa is counted amongst the New World’s wine producers, the first grapes were pressed for wine at the Cape, over 350 years ago, in 1659 under Jan van Riebeeck.  He had come to the Cape in 1652 to establish a settlement on behalf of the Dutch East India Company.  Vineyards were planted more extensively a generation later, when the French Huguenots began arriving from 1688 onwards, fleeing religious persecution.

First under Dutch and then British rule, the Cape became famous for its Constantia dessert wines.  By the late 18th century they were being served in Europe to the nobility and when Napoleon was exiled to St Helena, in 1815. Such was their renown that Jane Austen, Charles Dickens and Baudelaire wrote about them.

The rebirth of South African wines began in the 1990s. For most of the 20th century, the local wine industry was controlled by the KWV or the Koöperatiewe Wijnbouwers Vereeninging Beperkt van Zuid-Afrika (Co-operative Wine Growers’ Association Limited of South Africa).  Founded in 1918 to represent the interests of wine farmers and regulate the stable growth of the Cape’s wine industry, it was privatised in 1997, allowing for the deregulation of the industry.

Another impetus for the freeing up of the industry was South Africa’s return to international trade after decades of isolation under apartheid rule.  With political reform and the advent of democracy in 1994, there was an influx of financial and intellectual capital into the wine industry.  Locally trained winemakers began travelling to other wine-producing countries, to study abroad or work in the cellars of leading winemakers in the Old and New World. Soon exports began to grow and today the country exports around 420 million litres annually, just over 50% of its total production.

Picture by Wines of South Africa (WOSA)

Even though South Africa’s presence on contemporary world markets is still relatively new - spanning no more than two decades - the country’s wines consistently earn positive attention from wine critics and wine competitions globally. Today, South Africa ranks as number seven in global wine production by volume, producing 4,2% of the world’s wine (2014). Currently 99 463 hectares of vines producing wine grapes are under cultivation in South Africa over an area some 800 kilometres in length. White varieties constitute 54.6% of the plantings for wine, with Chenin Blanc comprising 18.0% of the total. Red-wine varieties account for 45.4% of the national vineyard. The most widely planted red variety is Cabernet Sauvignon, accounting for 11.5% of the total. Shiraz accounts for 10.5%, while Merlot accounts for 6.1% and Pinotage, which is indigenous to South Africa, represents 7.4%. 

Despite its African geography, the Cape Winelands, situated at the southern-most tip of Africa, enjoys a Mediterranean climate with generally cool, wet winters and warm, dry summers ideally suited to wine-growing. Very importantly, sea breezes from the Atlantic and Indian Oceans cool the vineyards during the summer afternoons, slowing the ripening process and intensifying flavours.  Vines also benefit from a significant drop in night-time temperatures. 

Not only has South Africa been exposed to leading-edge viticultural research and winemaking techniques internationally, but prominent viticulturists and winemakers from other countries have identified South Africa as having outstanding viticultural potential and have invested in ventures here.  A further attraction has been the fact that local producers are not subject to the constraints faced by wine producers in Europe.  Although legislation pertaining to winemaking quality and to classification of origin is stringent, producers in the local market are given greater scope to establish vineyards in new wine-growing areas.  Wine regulations in South Africa divide wine growing regions into four levels: geographical unit, regions, district and ward. Ward is the smallest class in these four levels. It is divided based on soil, climate and other factors, or "terroir".

Picture by Wines of South Africa (WOSA)

Over 350 years of the wine-making history, suitable climate, a good legal framework, and the latest winemaking ideas and technologies have resulted in world-class wines. But these wines do not have enough visibility in many markets, especially in China. And this creates time lag and thus cost-effectiveness for us!

Increasing maturity of the Chinese market has led to increased wine offering in the once “small wine nation”. France, the traditional market leader is no longer the only option for high-quality wines. Italy, Spain, Germany, Portugal and other Old World countries as well as the United States, Australia, New Zealand and other New World countries produce high-quality wines. South Africa is no exception. At present, China is the sixth largest export market for South African wine and the largest market in Asia. According to China Customs data for 2015 quoted by online publication Grape Wall of China, China imported 12 million bottles of South African wine in 2015. In fact, the South African category saw the biggest gains in the top ten (countries of origin for imported wine), up 80 percent by volume and 79 percent by value. 

Compared to the Old World countries, winemaking in South Africa is more flexible. Compared to the New World countries, South Africa has a longer history of wine-making. And this is South Africa: the Old ‘New World’.

-Ian Dai, Penguin Guide Wine Director-