Africa’s vast and diverse continent is rapidly emerging as a dynamic and untapped market for South African wine. With its rich cultures, growing economies, and a burgeoning middle class eager for new experiences, Africa presents a unique opportunity for South African wine producers to expand their horizons.
As Matome Mbatha from Wines of South Africa (WoSA) recently highlighted, the time has never been better for new-generation brands to explore these fertile grounds. From the bustling streets of Nairobi to the vibrant markets of Lagos, South African wines are gaining traction, not just for their quality and affordability but also for their story, a narrative of resilience, innovation, and a commitment to excellence. Now is the moment for South African wine to solidify its place in the hearts and glasses of African consumers.
Africa market insight and outlook
After four turbulent years, the outlook for sub-Saharan Africa is gradually improving. Economic growth is expected to rise from 3.4% in 2023 to 3.8% in 2024, with nearly two-thirds of countries anticipating higher growth. This recovery is projected to continue, with growth reaching 4.3% by 2025. Inflation has almost halved, and public debt ratios have broadly stabilised.
Looking ahead, the economic outlook for Africa is cautiously optimistic, supported by an improving global economic environment and the implementation of effective domestic policies. Strategic investments in key Sustainable Development Goal areas, such as education, energy, productivity-enhancing technology, innovation, productive transport infrastructure, and economic diversification, will be crucial. With a projected net increase of 740 million people by 2050, up to 12 million youth will enter the labour market annually across the region in the coming decades, yet only about 3 million new formal wage jobs are currently created each year.
South African wine in African markets
The image and perception of South African wine remain positive in key WoSA strategic markets, including Kenya, Uganda, Tanzania, Nigeria, Ghana, and many others across the African continent. This success is driven by the quality, affordability, and diverse winemaking styles offered by South African producers. WoSA’s introductory wine courses have also significantly enhanced trade, media, and consumer knowledge about South African wine, history, and tourism. The involvement of wine producers in importers’ promotional activities and market visits to engage directly with consumers has further bolstered this positive image.
This favourable perception presents significant opportunities for advancing South Africa’s premiumisation strategy and positioning the country as a wine-producing region of choice, strengthening relationships in strategic markets. However, these opportunities come with challenges, including tariff and non-tariff barriers in key markets and competition from other wine-producing regions with aggressive marketing strategies.
South African wine exports to strategic African markets
South African wine exports have declined in certain markets due to challenges such as increased tariffs in Tanzania and Kenya, which create uncertainty for exporters. The duplication of testing processes through Bureau Veritas’ pre-export verification of conformity, along with the stamp system in Ghana and the lengthy and costly NAFDAC registration process in Nigeria, adds further complexity.
Markets like Nigeria and Ghana are still recovering from last year’s devaluation of the Naira and Cedi, which slowed economic growth. However, these markets are now on a path to recovery and financial stability. As the wine culture and drinking population grow across African markets, South Africa is well-positioned for premiumisation. To capitalise on this, it is essential to continue with generic and brand promotional activities and remain relevant in these markets.
The activities feedback from WoSA’s East and West Africa tours can benefit black-owned brands in South Africa, offering several key advantages that can drive growth and success in the African wine market.
Market exposure: The promotional activities in key African markets like Tanzania, Kenya, Nigeria, and Ghana provide black-owned brands with increased visibility and exposure to new consumer bases. This expanded reach is crucial for brands looking to grow their presence beyond South Africa, allowing them to tap into the diverse and dynamic wine markets across the continent.
Brand awareness: Participation in these tours helps build brand awareness among trade professionals, media, and influential consumers. By showcasing their wines in front of key industry players, black-owned brands can position themselves as significant contributors to the African wine industry, reinforcing their reputation and establishing a solid foothold in these markets.
Networking opportunities: These events also offer valuable networking opportunities. Black-owned brands can connect with importers, distributors, and other industry stakeholders, leading to potential partnerships and collaborations. These connections are essential for navigating the complexities of entering and expanding in new markets.
Educational advancement: The introductory wine courses and tastings conducted during the tours enhance participants’ knowledge of South African wines. This educational component creates informed brand ambassadors who are well-equipped to advocate for and promote Black-owned brands in their respective markets, further boosting their recognition and appeal.
Premiumisation strategy: Aligning with WoSA’s premiumisation strategy allows black-owned brands to leverage the positive perception of South African wines. By positioning themselves as high-quality, desirable products in African markets, these brands can potentially increase sales and foster greater brand loyalty among consumers looking for premium wine offerings.
Overcoming barriers: The feedback from these activities also helps identify and address challenges such as tariff and non-tariff barriers. With the support of WoSA and other industry bodies, black-owned brands can better navigate these obstacles, ensuring a smoother entry and sustained presence in African markets.
These promotional efforts offer a comprehensive platform for black-owned brands to grow and succeed in the African wine market, contributing significantly to their long-term development and market penetration.
While South African wine faces challenges in the African markets, the positive perception and strategic promotional activities provide a strong foundation for growth and premiumisation. Continued focus on overcoming barriers and leveraging opportunities will be crucial for sustained success in these markets.
