South African suppliers are starting to reap the benefits of Walmart’s presence in the country, said the group in a statement.
It cited the story of Seven Sisters, a range of locally produced wines from the Swartlands area in the Western Cape, which has successfully broken into the shelves of the globalised US retailing giant.
The statement came a day after the tussle between the Walmart/Massmart formation and the South African government was finalised in the Competition Appeals Court. The court imposed a R200m five years supplier development programme on the merged Walmart/Massmart entity. This is after government and unions protested that the R16.5bn takeover of local retailer Massmart by the American group Walmart would kill local industry and escalated the matter to the competition appeals court.
The Walmart statement said Seven Sisters wines were launched in Walmart stores in America recently. Seven Sisters’ Bukettraube (Odelia) 750ml and Seven Sisters’ Cabernet Sauvignon (Carol) 750ml were launched in 58 Walmart stores with expansion expected across the country in locations where Walmart sells wines. There are currently two stock keeping units (SKUs) being supplied to Walmart stores. Walmart will focus on growing these two SKUs with Seven Sisters and determine future distribution based on customer’s response.
“We are very excited to add the Seven Sisters wine brand to our assortment. We believe these wines will be well received by our customers for their value and great quality. We look forward to growing our relationship with Seven Sisters”, said Jason Fremstad, Walmart Senior Wine Buyer.
The target retail price of a bottle of Seven Sisters’ 750ml wine in most states in America is $8.97 (approximately R80). Seven Sisters is a 100% BEE brand owned by women. The wines are produced by one of only two black family owned vineyards in South Africa and have been certified 100% sustainable by WIETA, a non-profit voluntary organisation which actively promotes ethical trade in the wine industry value chain.
Carolyn Barton, national wine buyer for Makro, says: “Women-owned suppliers are often battling to make their mark. By keeping their wines on our shelves, we hope to give them a window into the larger-scale retail world.”
Massmart said it intends to establish further relationships with even more wines from woman-owned wine farms through its Supplier Development Programme. By working with these entrepreneurs, Makro is hoping to offer producers insight into which wines the chain’s customers prefer and how to build their brands in the wine market.
Massmart-Walmart have been working with other local suppliers to help them become more competitive by providing them with opportunities to access international markets. Further examples of the benefits of the merger for suppliers include Lonrho’s Oceanfresh hake and Econo-Heat’s energy efficient wall mounted heaters – both local manufacturers and suppliers that now have their products listed in the USA at Walmart stores. IPL, a subsidiary of ASDA Walmart’s UK operation, has been working with suppliers in South Africa to export fresh produce and wines to ASDA, Walmart Canada and Walmart Japan.