New export opportunities for South African wines

South Africa’s wine exports have lately been showing significant growth from “non traditional markets” which industry experts are looking at closely as potential opportunity to jump the country’s wine industry.

In the first three months of 2012 South Africa’s wine export volumes showed 21% growth compared with the first quarter of 2011.

Industry association Wines of South Africa (WOSA) observed that while volume export growth has been driven largely by bulk sales from traditional markets, US and Europe mainly, there was also good growth for bottled wines coming from non-traditional markets such as East Africa, Russia.

WOSA’s manager for Africa and the Americas, Matome Mbatha pointed out that the association was working with the department of trade and industry to unlock opportunities in “non traditional markets”. The Nigerian market has come under the microscope. Mbatha said the association was interacting with the National Agency for Food and Drug Administration and Control (NAFDAC) in Nigeria to explore opportunities and to better understand the market.

WOSA CEO Su Birch said the organisation was now also looking to tap the potential of the Nigerian market, the second largest economy in Africa. Birch said, with a projected annual GDP growth of 11,8% till 2016 and a population that is increasing by 2,35% a year, Nigeria was posed as a lucrative market. She further observed that the US Census Bureau predicts that Nigeria will be the world’s fourth most populous nation by 2050.

Speaking at a WOSA-hosted seminar in Stellenbosch last week on wine marketing opportunities in Nigeria, Sapta Bhattacharyya, the associate vice president of global research company Aranca, said the volume of wine exported to Nigeria between 2007 and 2011 had shown a compound annual growth rate of 24,12%.

The value of Nigeria’s wine market, now worth around $300m a year, was expected to reach $370m by 2015.  Currently, Europe held the lion’s share of this market with some 60% of volumes sold, but South Africa was the next biggest player with a 22% by volume share, he said.

Bhattacharyya estimated that some 5,2 million people, representing the top 10% of earners amongst the population of 156 million, accounted for 43% of consumption expenditure in the country. This was the group to target as potential wine consumers.

South African wine exports to Nigeria grew by 12% for the 12 months to March 2012.

While total volumes of all wines sold in Nigeria were expected to grow by 6% a year but just 2% by value, Birch said the potential for growth at the higher end of the market should not be overlooked.

With most economic activity occurring in Nigeria’s key metropolitan areas of Lagos, Abuja, Kano, Kaduna, Onitsha and Port Harcourt, Birch said potential wine markets were being identified and developed with top-line hotels and restaurants catering to the well-heeled in these centres.

Mbatha pointed out that all of WOSA’s efforts would be concentrated on the south, non-Muslim regions of the country.

 

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