Premium South African wines with the price tags to match are sweeping into international markets. KIM MAXWELL asks if the world is ready for them yet
Benchmark Paarl Pinotage, cult Stellenbosch Cabernet, Walker Bay rarities, limited-edition Robertson icon Shiraz 1985. Is it premature to imagine South African wines that will take on Grange, Screaming Eagle or Le Pin, both in quality and price? If so, will they elevate the image of brand South Africa, or simply attract less quality-orientated producers on a dollar-chasing crusade?
If you are familiar only with the rather mediocre South African wines available in British supermarkets, or their European equivalents in the £3.19 and £3.99 spectrum, your answer to the first question is likely to be no. But if you’ve tasted some of the premium South African wines currently selling in Europe, the UK and North America in the £15–30 categories, you may have a more optimistic view. Top-end labels are definitely creeping up in price, both inside South Africa and in key international markets. But does the wine quality deliver for the price? And is that really the point?
Bruwer Raats, winemaker and marketeer at Delaire, started the ball rolling by releasing 200 12-bottle cases of 1997 Merlot in 2000 at SAR105 (South African Rand) per bottle (equivalent to around £10). The US allocation was snapped up to retail at $40 (£27) apiece; in the UK the wines retail at £17. Low yields, old vines, oak ageing and bottle maturation helped the wine sell out from the cellar door within seven weeks, but not without flack from rivals who questioned whether quality matched price. An 87-point Robert Parker score didn’t hurt, although the average South African.
consumer has barely heard of him. Raats believes that premium pricing (in the case of a vintage- specific, limited-edition wine) helps elevate the South African image as a whole – much as Penfolds Grange did for Australian wine – irrespective of whether everyone agrees on quality. ‘If you have small volumes and people have heard about the wine but can’t get it, it creates a demand,’ he says. ‘Ten years later customers will decide the prices. That’s why Screaming Eagle costs US$1,000 (£680) a bottle – if you can get it. You must have confidence in your product; it creates a benchmark for others to aspire to, but there must be quality.
‘I’d like South African wines to sell for $50 (£34) per bottle, but we’re not there yet,’ he continues. Raats is realistic about pitfalls for new boys on the block, though: ‘Producers such as Kanonkop and Rust & Vrede have 10-year old wines that are ageing well, but these are exceptions. Few South African producers can guarantee that their expensive wines can mature, and we need to be sure that our wines have staying power.’
Pinot at a Price
Premium Pinot Noir producers in Walker Bay fight an ongoing battle with South African panels and industry players in mainstream Stellenbosch and Paarl. These wines are expensive by local standards. Hamilton Russell entered its Pinot Noir 1999 in the national Veritas awards in 2000 for the first time in years, but only after ensuring judges included Pinot producers or overseas palates. The wine took double gold. In the same year, Bouchard Finlayson’s Galpin Peak Tête de Cuvée 1997 received a three-star local magazine rating, then took gold, and shared the Burgundy and Pinot Noir trophy with a Volnay at the International Wine Challenge. Sourced from eight select barrels, 2,000 bottles sold out from the cellar door at SAR200 (around £18), with 300 magnums going at SAR450 (£40).
For winemaker Peter Finlayson, the recognition was useful in affirming Pinot Noir as a serious South African wine, and in illustrating that the region’s prices are internationally competitive, compared with Oregon Pinot Noirs or Burgundy premier crus at $50–$60 (£34–£41). A complaint from some local consumers is that imported wines offer better value. ‘We sell 70% locally, so obviously consumers will pay. Some overseas visitors to the farm, especially from North America, seek us out for our reputation. Pinot producers outside France are limited, so there is a Pinot fraternity that is always searching,’ he explains. Like Raats, Finlayson believes successful wines should offer top quality in small quantities.
At La Cotte Wine Sales in Franschhoek, Ludwig Maske offers a small but focused imported wine selection. La Cotte’s distance off the beaten consumer tracks of Cape Town and Johannesburg means his stocks of acclaimed local Pinotages and Cabernets, many auction selections, have not been depleted. It’s why wine stewards and
producers send over customers in search of rarities or older vintages. ‘A guy from Sweden bought a lot of foreign wines here because he said the selection was better than it was back home. South Africans are largely unadventurous about overseas labels, except for those in the industry,’ he says. ‘You’ve really got to push them to leave South African labels they know, and to go for something different.’ He also feels that premium South African wines should be made in large enough quantities so as not to ‘irritate the market’, and that they should offer uniqueness to compete on a global scale.
Oscar Foulkes, who runs two Enoteca wine outlets in Cape Town, believes that premium South African wines were underpriced in international terms until recently. ‘A Kanonkop Paul Sauer 1995 still retails for SAR100 (£9), for instance. How many Aussie or Californian wines sell for the equivalent? Our prices need to be more on a par with international trends,’ he states.
Johann Krige of Kanonkop says if producers raise prices they should give consumers extra value. He doesn’t believe in raising the price of Paul Sauer (SAR89, or £7.80, ex-cellar) too often, yet other premium reds, such as Simonsig Merindol Shiraz and Rickety Bridge Paulinas Reserve, fetch more than SAR100 (£9) at the cellar door. ‘The pinnacle of South African wines are priced too low overseas, but then our image is lower because we’re from Africa. Producers have to market their products better, winemakers must get out there. We need more Beyers Truters [Kanonkop’s innovative winemaker],’ he says. Also auction manager of the annual Cape Winemakers’ Guild auction for five years, Krige says guild wines showcase the best of South Africa as producers usually make special blends. The 2000 sale fetched just under SAR1.9 million (£167,200), so wines averaged at SAR135 (£12) per bottle. Premium reds such as Thelema Merlot Reserve 1998 fetched SAR265 (£23.50) apiece, and there was interest in premium whites too. Meerlust’s barrel-fermented Chardonnay sells for around SAR80 (£7) from the cellar door, and usually gets a 20% retail mark-up.
Richard Kelly MW, of importer and local distributor Vinimark, visited Chile, California and Portugal to see how South African wines compared to the local offerings. He feels that South Africa’s selling point is good value, noting that while premium Californians offer consistent quality, they also bear premium prices, whereas South Africa offers better wines at commercial level. For quality, Kelly believes South Africa generally pips Portugal in the £10–15 category, but sees Chile as competition. ‘Chilean wine is suited more to the US than the UK market, with softer, Parker-type characteristics, but many South African wines conform more to UK tastes. Unlike Australia, which has successfully moved its wines within UK price points, South Africa was historically sold at lower price points. It’s tarnished our reputation,’ he says, alluding to earlier market domination, often with inferior products, by companies such as KWV International.
The Priciest Wine
It’s not surprising then that South African producers are sceptical of KWV’s 1999 release, Abraham Perold 1996, a new French and American oak-matured Shiraz. Priced universally at US$100 (£68), it is South Africa’s most expensive wine. Despite being well made and offering good fruit, oak and ageing potential, it’s not going to knock out the competition with its wow factor. All the same, if the company that is partly responsible for letting South Africa’s reputation slip is prepared to put its extensive financial and marketing resources into promoting South Africa as a top drop, why not?
Chief cellarmaster Kosie Müller says that before launching, the company did extensive research, letting panels taste Perold alongside Grange, Hermitage, Opus One and the like: ‘The rest of the world is used to these wines. Our aim wasn’t to say we’re better, simply that we’re in the same league. We need a bigger vision.Ten producers with 10 different labels, each to be sold at Perold’s prices, which will raise the image of our country. We need to show the world we’re able to make top quality in large volumes.’ Müller doesn’t believe that a benchmark wine needs to be variety-specific. ‘It’s the best that KWV can produce, regardless of the variety. If a vintage doesn’t deliver we won’t produce. And there won’t be a limit on volumes as long as there’s quality.’ The first release totals 450 cases.
Rupert & de Rothschild Vignerons (R&deR) is a partnership between Anthonij Rupert (son of Anton, who has controlling interests in many local wine tanks) and Benjamin de Rothschild, owner of Château Clarke in Listrac. The wines were released internationally in London last year, but publicity in South Africa was low-key in comparison. ‘We feel it’s an international product,’ explains marketing manager Debra Savage. With Michel Rolland as a consultant and a stylish underground barrel cellar, you could easily be in a Bordeaux chai. With big names come big expectations, so let’s hope the Baron Edmond red blend (around £20) delivers to international consumers.
In a similar price bracket overseas (£18–19 or US$27), Rust & Vrede Estate Wine sells for SAR125 ex-cellar locally, a price that winemaker Louis Strydom feels is justified. ‘Our prices have gone up dramatically in the last three years,’ he says. ‘There was no equilibrium between what we were putting in (vineyard work, best oak, labour and so on) and putting out. We also sell out too quickly if we drop prices.’ He stresses the Estate’s consistency as a producer since 1979. ‘Cult wines come with a track record. We’ve had gold and double gold awards in Veritas for six consecutive years. A cult wine of 200 cases is no good. My ideal is to have 10,000 cases to spread the market further.’
Winecorp Limited wasn’t shy when it launched its flagship Naledi Cabernet Sauvignon and Sejana Merlot at SAR175 (£15.50) a bottle. Winecorp recently merged the Longridge, Savanha and Spier Cellars brands, each tiered to target specific markets at specific price points. The long-term vision is market-driven. Winecorp is modelling Southcorp by identifying and securing vineyards in a 10-year plan, providing growers’ incentives, and putting Australian winemaker Ben Radford at the head of a well-travelled cellar team. Benchmark wines from big producers is another Southcorp concept, of course.
Naledi and Sejana are flagship Savanha labels, made by Stephane de Saint Salvy (who trained in Pomerol) in consultation with Alain Moueix – perhaps that’s why the Merlot has the edge. They sell at Harrods at £16 and £25, and have global distribution via Bordeaux Rive Droite France, which markets icon wines Almaviva, Sassicaia and Pétrus. Like R&deR with Rolland (and a gentleman’s agreement with the Mouton-Rothschilds not to compete in South Africa), Winecorp is creating a South African icon using overseas expertise, but it’s also forging strong brand awareness locally. Like KWV, it wants premium wines in large quantities (3,000–4,000 12-bottle case productions of Naledi and Sejana) to ensure everyone gets a piece of the pie. The goals of the heavyweights sound amazingly similar, even if their philosophies are different. The future is certainly promising if perceptions of brand South Africa can move up a few tiers. Meanwhile, if the odd lightweight develops a fan club, fantastic.
Written by KIM MAXWELL