The South African wine industry needs to adjust its strategy for the African market before it completely misses out on the opportunity the continent presents. This is the belief of Craig Irving, CEO of Consumer Insight Agency.
Speaking at the Nedbank VinPro Information Day held in Cape Town last week, Irving said very little has been done by the wine industry to capture the African market.
“That’s where our opportunity lies as South Africans. You can stare longingly at the American, Australian and British market, [yet] they are all flat-lining. They are worth a lot of money, and there are a lot of people here who have done phenomenally well and I would celebrate that… but you have done very, very little in Africa, and are letting a lot of companies get ahead of you at a crucial time,” he told the audience.
He added a “phenomenal amount” of alcohol is sold on the continent, wine included. However, it is the French wine industry that is beating South Africa to the market. “Do you know how much wine is drunk in Kinshasa? A phenomenal amount, and it’s all French!”
In 2013 Shoprite’s CEO Whitey Basson revealed its seven stores in Nigeria sold more of the French-produced Moët & Chandon champagne than all of the group’s liquor stores in South Africa combined.
A complete revamp essential
Irving said South African wine producers and exporters need to understand consumers in the rest of the continent and then adapt their strategy to better address their needs. He suggests a couple of ways this can be done.
For starters, South African wines need to become more accessible. While there are a number of upmarket formal retailers that can sell wines in places like Ghana, Irving explained this only caters for a tiny 1% of the population.
The majority of Africans shop at informal outlets, and this is where South African wines need to improve their presence.
“Wine has done a fantastic job of creating sophistication… and you market like that because that is how you know how to market. It’s your comfort zone. But it’s the [informal] space you have to get into. And it’s not that insurmountable,” he continued.
“Unilever does it, Diageo does it, Heineken does it, Johnson & Johnson does it. So why can’t the South African wine industry do it? And why do you allow the French wine industry to beat you to the African continent?”
Wine labels and packaging also need to be tailored to different consumers. “The wine industry is phenomenal at storytelling. But you sort of speak to yourselves,” continued Irving.
He explained for the majority of African consumers, there is a pride in tradition while still embracing modernity. Therefore a strategy that works for brands in Africa is to blend modernity with a connection to the known and trusted.
One example of a brand that has been successful at this is Kasapreko, which holds 60% of the spirit market in Ghana. “They are local, and they understand their people,” Irving noted.
“So you have to re-culturise yourself to arrive in this market. And don’t be afraid of it, it’s not that difficult to understand.”