SA wineries banking on white wine, according to study

The sentiment for white wine production and white wine prices over the short and long term remains positive, according to the PwC South African wine industry insights survey 2014, released this week.

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According to the report, while in 2013 most respondents indicated that red grape production would remain stable, 42% have now indicated that they expected red grape production to decrease over the next three to five years.

Meanwhile, 53% of respondents indicated they expected white grape production to increase.

There was no expectation expressed that red wine prices would increase over the next 12 months, while 53% of respondents indicated that they expected a decrease in red wine price. However 21% expected an increase in white wine prices over the next year.

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The report indicated a more positive medium term outlook for red wine prices with 37% of participants saying they expected prices for red wine to increase over the next two to three years, while 42% said white wine prices were likely to increase over this period.

Other main findings highlighted in a statement released by PwC included a continued focus by the local wine sector on Africa for market growth, despite the unique logistical and regulatory challenges this market posed.

“Many executives of wine businesses in South Africa have again identified North America and the EU for future growth prospects, while international respondents indicated a bigger focus on Asia and South America,” according to PwC.

Frans Weilbach, PwC agribusiness industry leader, said in the statement that despite challenges faced by the industry, the results of the survey showed a significant number of positive findings and opportunities for the industry.

“These findings include a record harvest in some areas in 2013, as well as the national average yield being more than 16t/ha for the first time,” he said.

The survey also showed that the majority of chief executives (70%) in the wine business indicated that they expected current market conditions to remain stable in the short to medium term, with improvements in the long term.

Only a small percentage of wine businesses anticipated deterioration in market conditions within the next year.