The session was presented in collaboration with Vinpro. On the panel were Rico Basson (Managing Director of Vinpro), Prof Nick Vink (Agricultural Economist at the University of Stellenbosch), Daneel Rossouw (Nedbank Agriculture, Western Cape), Anton Smuts (Owner of Lucerne farm in Robertson and chairman of Vinpro), and Phillip Retief (CEO of Van Loveren Family Vineyards and Vice-President of Vinpro).
The conversation kicked off with Rico Basson stating that the South African wine industry spans about 95,000ha, from the south to Natal. “I think we can get smaller by another 10,000 ha. Vineyards are old and the focus is on the quality of wines”. Prof Nick Vink added that South Africa thinks the problem is land, although the bigger problem is the availability of water. Phillip Retief pointed out that there is enough land in the Western Cape for wine cultivation, but that the availability of water, the expansion of wine producers, is hampering.
The panel agreed that, over the last three years, the drought has forced producers to start diversifying with alternative crops and applying better farming practices in terms of precision farming, which is sure to be the future of agriculture. Daneel Rossouw further stated that adaptations such as new Greek cultivars and better irrigation scheduling are ways to mitigate water shortages in the wine industry to some extent. “An agricultural producer cannot stand still. As soon as he stops, he goes backwards”, was Rico Basson's view on the progress of wine producers.
Anton Smuts went on to say that producers should enter into collaborative agreements to improve products. “Our problem is we do not actively participate in the entire value chain. From production to the end consumer”. He also added that the wine industry should now focus on marketing the brands. Phillip Retief extended this point further with the view that South Africa does not necessarily have poor marketing in the industry but rather poor salespeople. “The fragmentation of the industry has caused us to sell at a lower price. If you have a smaller offer, you actually have to sell at a premium and that's not necessarily what happens in South Africa. In SA, we compete in terms of exports with, for example, American companies where one company produces itself, more wine than the entire South African market”.
What is at the heart of this industry is a strong brand. Prof Nick Vink made the statement that brands in the wine industry are taking over and everything. From a financing and profitability point of view, Daneel Rossouw confirmed that the stronger the brand involved and the better the brand is established in the market, the more successful the farming business will be.