Cape Wine Report - Part 2

Changes Are Evident

South Africa is evolving. Amazingly, the recent change of leadership of the government was a peaceful transition. It occurred during the Cape Wine Fair, and attendees were no more aware of it than they were of the rain that was falling on and off outside.

Most of the aromas of burnt rubber and smokiness that characterized South African wines are now absent. Pinotage carries not the former aromatic profile but one more akin to its parent Pinot Noir. Other changes are evident and will be discussed below.

Biodiversity & Wine Initiative

A partnership between the South African wine industry and the conservation sector, the Biodiversity & Wine Initiative's (BWI) aim is to minimize the future loss of threatened habitat and to contribute to sustainable wine production. This includes conserving natural habitat (the fynbos, local wild habitation like garrigue in Southern France) while also protecting and reestablishing natural freshwater resources such as wetlands and rivers on wine farms.

Currently 116 wine estates, including a number of the top rated ones, are members of BWI. An additional 13 wineries are certified as "champions" (exemplary level), and one entire wine district--Darling--is the first entire region to be BWI-accredited.

"What makes this district's dedication all the more remarkable," said farmer John Duckitt, who supplies grapes to Darling Cellars, "is that the wildflowers and vineyards flourish in the same soils, meaning that the conservation and preservation of the flower reserves in and around Darling, instead of planting more economically valuable vineyards in the area, really showcase these farmers' long commitment to a sustainable environment."

As of September 2008, the total amount of pristine natural conserved land among the 189 BWI member and champions comes to more than 102,000 hectares (252,047 acres). The area conserved also represents the equivalent of 100 percent of the total 101,957 hectares (251,941 acres) vineyard footprint in the Cape wine lands. That means that for every hectare (2.47 acres) of planted vine, an additional hectare is under long-term conservation in the Cape wine lands.

A number of vineyards are also certified organic or biodynamic, but the certification is done by South Africa's standards, which are not necessarily consistent with the international standards for organic or biologique (in France) or with Demeter for biodynamic.

Promoting Wine and Employment

To prepare for hosting the 2010 FIFA World Cup, South Africa is looking to promote wine and employment. In that South Africa lacks enough trained restaurant, bar and hotel wine staff to handle the estimated 10 million visitors who may descend upon Cape Town to view the finals, WOSA has commenced an ambitious project to train 2,010 people in the hospitality industry. Called Laduma (the Zulu word for soccer goal), the project will help previously disadvantaged South Africans become wine stewards and ambassadors of South African wines.

Laduma will be funded by the sales of a new wine brand called Fundi (Zulu for expert). Six Cape wineries will produce the wine: Stellakaya, Anwilka (the wine company funded by Chateau Angelus and Cos d'Estournal with Klein Constantia), The Company of Wine People, Hartenberg, Waterkloof and False Bay Vineyards. Various blends of Pinotage, Cabernet Sauvignon, Merlot and Shiraz were selected for Fundi by the Cape Winemakers Guild and will be sold in South Africa and selected export markets.

Foreign Investment

Troy Christensen, vice president of Constellation Europe, spoke about investing in South Africa and acquiring the brand Kumala. He talked about South Africa's benefits: complexity of soils, varied varieties, leadership in sustainability and conservation, ethical wine production and the need for South Africa to clearly promote these points to consumers, customers and the press.

He pointed out that South Africa is the ninth largest producer of wine in the world but is under-delivered in the U.S. He stated that the emerging markets of China, Brazil and India have close economic and social relations with South Africa. "Consumers care more and more about sustainable, organic, Black Economic Empowerment, Fair Trade and the like," Christensen said. "South Africa has the potential to steal market share from Chile and Australia."

Australian Grant Dodd of Dombeya Wines, a supplier of premium wines to Central Europe and Russia, presented the strengths, weaknesses, opportunities and threats in South Africa. Among its strengths: the exchange rates, great unrealized potential, under-developed growing locations and less effects from global warming. In addition, wine investment is growing, and innovation in viticulture and vinification is increasing. Weaknesses, he thought, include unpredictable currency fluctuation; inflexible regulations; fluctuating domestic market growth; ethnicized, polysyllabic names barriers; and international marketing campaigns that emphasize tangential attributes other than wine.

Dodd outlined the opportunities. South Africa is an unknown entity in many markets, and emerging markets may be the next big thing. "When is South Africa's turn? And will they be ready?" he asked. The threats include vineyard viruses, negative press and trade, discounting, currency weakness, the potential of a changed water supply due to global warming, and government, social and third world instability.

Marian Kopp of Golden Kaan talked about his partnership model. The Golden Kaan brand is owned 50 percent by KWV of South Africa and the Racke Group in Germany. They do their own sales marketing structure.

Paul Boutinot, a U.K. wine importer, developed Waterkloof overlooking False Bay north of Cape Town on a low capital base model; he moved to a high capital base when he built the winery. He is a BWI champion and farms biodynamically. Boutinot made a few concluding points:

• South Africa as a brand needs to promote identity.
• Underinvestment in brand South Africa--the price and the image--is too low.
• Ownership of a brand invests in the intangible and will help brand South Africa.
• Work is needed with the home market.
• It is a question of a currency paradox: "If we can sell South Africa Brand, then we can win."

Wine Made In Amphora

South Africa is home to Duncan Savage at Cape Point Vineyards, located in the Cape Point wine region south of the Constantia area. His property is almost vertical with densely planted, steep vineyards rising above an Atlantic bay. This maritime influence helps to give an almost salty character to Savage's nervy Sauvignon Blanc and Sauvignon Blanc/Semillon blend wines. These fine wines were fermented in stainless steel.

Savage got to thinking in 2003 after Nicolas Joly, a leading proponent of biodynamic viticulture, spoke in South Africa. While Joly addressed the merits of clay soils, Savage began to think about his family's Spanish clay amphorae. He wondered what would happen if he fermented his wines in clay? He wanted a local product and found Yogi de Beer (yes, that really is his name), who produced what Savage wanted: 500-litre, traditionally-shaped stoneware containers. Savage experimented with unlined amphorae, but those containers leaked a bit. He made many trials in the amphorae. He liked what he tasted, and said the wine was "rich and mouth-filling."

He plans this next vintage to ferment Semillon (the process is too oxidative for Sauvignon), 12 to 24 months in the 500-litre amphora, including fermentation.

Savage also added, "It may take 10 to 15 years to find our way with this."

It has taken the wines of South Africa just about that amount of time to evolve to now as well. If you look at the beginning of South African wine at the end of apartheid in 1991 and the quality of South African wines rising up since then, then maybe in 10 to 15 more years we will see South African wines rising even higher in quality and prestige. wbm