Wine tourism can restore some sparkle to SA’s damaged image, conference told

22 May 2023

We can bottle hope, even if the country is flawed and diplomacy blunders damage our international image, the Wine Tourism Conference heard.

South Africa, as a brand, stinks. It makes global headlines for all the wrong reasons — tainted by the ignominy of violent crime, corruption, rolling blackouts, collapsing infrastructure, political instability and poverty. Then there’s the scoring of own goals by appearing to side in word and deed with the Russian aggressor while purporting to be neutral.

Yet, despite seemingly eternal misfortunes, it is our home. It’s beautiful and seriously flawed and it’s up to all of us to work at fixing it. That was the message of Tshifhiwa Tshivhengwa, CEO of the Tourism Business Council of South Africa, and other speakers at the Wine Tourism Conference at Lanzerac wine estate in Stellenbosch on 17 May.

Wine tourism, a significant and growing industry in South Africa, encompasses everything from tastings and vineyard visits to cellar tours, accommodation, festivals and culinary experiences with wine.

These give wine-producing countries an edge and contribute handsomely to the economy. The South African Wine Industry Information and Systems estimated that, in 2019, wine was responsible for tourism receipts of R7.2-billion, which included direct spending by tourists on wine activities, as well as indirect contributions to accommodation, transport and restaurants.

Wine tourism accounts for about 15% of local wineries’ total turnover.

Counting the cost of poor diplomacy

In a recent blog titled “Counting the cost of poor South African diplomacy”, Donald MacKay of XA Global Trade Advisors said South Africa’s trade with the US for 2022 was R260-billion, but “it’s really our exports of R178-billion (9% of our total exports) we need to worry about”.

Of this, R30-billion of exports benefited from the US’s African Growth and Opportunity Act (Agoa).

“The Agoa automotive benefit is 10%, which means that, if we lose the Agoa benefits, US auto importers will need to cough up an extra R1.4-billion in duties per annum,” said MacKay.

“They won’t have a choice in the short term, but when those new-model investment decisions need to be made, this will be a factor in their decision making.”

Quoted in an earlier Daily Maverick article by Peter Fabricius, MacKay said vehicle exports represented more than half of Agoa exports, at R15.320-billion; aluminium was R4.208-billion; chemicals R2.34-billion; fruit R1.44-billion; wine R802.5-million, ferroalloys R611.9-million and — perhaps surprisingly — “ice cream and edible ice” R519.5-million.

Read more in Daily Maverick: SA’s ever-closer ties with Russia jeopardise R60bn in annual exports to US under Agoa deal

Wine producer body Vinpro has also raised the impact of the bad press about South Africa’s warm relationship with Russia. Last week, it issued a joint statement with Wines of SA, saying they believed the government’s response to recent allegations of military materiel support for Russia was “unsatisfactory” and brought uncertainty that put the economy — expected to shrink by as much as 2% from earlier GDP growth forecasts — under even more pressure.

Saying this was something South Africa could not afford, they noted that the country was the ninth-largest wine producer in the world and produced 4% of the world’s wine.

SA’s wine industry contributes more than R55-billion to the GDP and employs 269,069 people across the value chain, with 80,173 on farms and in cellars.

“These allegations, if true, will have a significant negative impact on the economy and may jeopardise our trade relationships, especially our much-needed continued access to US markets created under Agoa, which will be renegotiated for a further period soon,” said Vinpro and Wines of SA.

They said exports were a lifeline for the wine industry as the country exports about R10.5-billion worth to more than 125 countries worldwide. The US is one of South Africa’s top five export markets, with sales last year of up to R800-million.

“However, it is not only the value of the Agoa agreement... that can be negatively affected. These allegations may also pose a risk to the wine industry in terms of tourism, continued wine exports and our reputation as a credible role-player in the international trade environment.”

Agoa is due to expire in 2025. The US Congress will decide whether to renew it.

Leading voices offer hope

Politics aside, the wine tourism conference, representing some of the most influential voices in the industry, offered some hope.

With a strong line-up, including Tshivhengwa; Wrenelle Stander of Wesgro; Pepe Marais, the founding partner and chief creative officer of Joe Public; brand strategy consultant Katlego Flocart Ditlhokwe; Peter McAtamney of Wine Business Solutions of Australia; and Stellenbosch Wine Route chairman Mike Ratcliffe, local and international speakers spoke about how to leverage wine sales by enhancing business brands through wine tourism.

This was the seventh annual Wine Tourism Conference.

Stander of Wesgro, Western Cape’s trade, investment and tourism promotion agency, said the province had a unique opportunity to build on an already strong brand.

The recently launched Made in the Cape brand, supported by the Cape Trade digital portal connecting buyers and sellers, features more than 4,500 products, including wine.

With 190 international buyers on the portal and more than 1,000 exporters of Cape products, this initiative made Stander confident about tourism’s future.

“Tourism in Western Cape has fully recovered and is now approaching its growth phase. In March 2023, we saw international arrivals recover to 103%. That is really quite exciting because eight of the top 10 international markets have fully recovered.”

Delta Airlines now has direct connections to Cape Town from Atlanta, Washington, DC, and New York and there has also been a big increase in cruise ship arrivals.

Stander said that for every 100 tourists or travellers in Western Cape, jobs were created.

The Americans are driving that recovery, through direct flights from Delta and United. “They actually led the Covid recovery, which is really, really quite amazing. We’re very, very pleased with the work that is done in that space.”

In Q4 2022 169,000 new jobs were created in South Africa, 167,000 of them in the Western Cape. Assessing South Africa’s image problem, Tshivhengwa said the entire country was faced with challenges that affected how it was perceived abroad. This had an impact on the work of the tourism industry as it had the job of selling the country.

“While those challenges are real, we have to find pockets of excellence that we can exhibit on the global stage so that we can remain competitive and we can sell the distribution that we have. Wine tourism is one of those excellent assets in our toolkit.”

Why should tourists with multiple destination choices choose South Africa?

For the people and the stories.

“I’ve heard incredible stories of how the experience is being communicated to visitors that come to this area. Stories about the people who work in this industry — the real heroes, those who wake up in the morning and make sure that the vineyards, water, food, are taken care of. This is experiential marketing we need to tell.

“What’s unique about our wine is the story behind it. The people behind it. We are resilient as a country and we’re a brand to reckon with.” DM

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Business Maverick

Counting the cost of poor diplomacy

Leading voices offer hope