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Photo for: South Africa Wine Part Two: Current Challenges Facing the Wine Industry


South Africa Wine Part Two: Current Challenges Facing the Wine Industry

Navigating Challenges: South Africa Wine Industry Insights

This is the second part of a two-part series on South Africa Wine, the new trade organization launched in 2023. Wanda Augustyn, communications manager with South Africa Wine, kindly organized getting answers to some of my questions about the state of the South African wine industry. 

In Part Two, we come to the hurdles facing the country’s wine producers. 

I asked about the top five challenges facing South Africa's wine industry and how South Africa Wine helps winegrowers and exporters face and overcome those challenges. 

Rico Basson, South Africa Wine CEO, listed the first four for me, while Gerard Martin, RDI executive, tackled the fifth: climate change. Many are unique to South Africa, and their discussions provide intriguing insights into winemaking’s future profitability. 

Cape Town Port

Like many ports worldwide, the Port of Cape Town has experienced various challenges that have impacted its efficiency and reliability, leading to significant delays and disruptions in the supply chain. Some key woes at the Cape Town port include congestion, infrastructure constraints, labor issues, and administrative bottlenecks. The delays and disruptions have resulted in export delays, quality control issues, and cost escalation.

Source: Engineering News

Overall, the woes at the Port of Cape Town pose significant challenges for the South African wine industry, impacting its export capabilities, supply chain resilience, and global market competitiveness. Addressing these challenges requires collaborative efforts among port authorities, government agencies, industry stakeholders, and logistics partners to improve port infrastructure, streamline administrative processes, and enhance operational efficiency to support the wine industry's growth and sustainability. 

South Africa Wine plays a proactive role in addressing the port woes on behalf of its members in the wine industry by advocating for their interests, fostering collaboration among stakeholders, and driving positive change to enhance port efficiency and reliability. 


Electricity supply challenges and Eskom woes present significant obstacles for the wine industry in South Africa, impacting production costs, operational efficiency, and sustainability efforts. Addressing these challenges requires collaborative efforts between government, utilities, industry stakeholders, and energy providers to ensure reliable, affordable, and sustainable electricity supply for wine producers. 

Load shedding, a controlled process of electricity rationing implemented by Eskom to prevent grid overload, has been a recurrent issue in South Africa. It disrupts production schedules and operations for wine producers, leading to downtime, production losses, and decreased productivity. Wineries rely on a consistent and reliable electricity supply for various processes, including refrigeration, fermentation, bottling, and storage, making them vulnerable to the impact of load shedding on their operations. 

The rising cost of electricity in South Africa is a significant concern for wine producers, who rely heavily on energy-intensive processes throughout the winemaking cycle. High energy costs increase production expenses, eroding wineries' profit margins and making them less competitive in the global market. Wineries must invest in energy-efficient technologies, renewable energy solutions, and energy management practices to mitigate the impact of high energy costs on their operations. 

The reliability and stability of electricity infrastructure, including transmission lines, substations, and distribution networks, pose challenges for the wine industry. Infrastructure failures, voltage fluctuations, and power outages can disrupt operations, damage equipment, and compromise product quality. Wineries may need to invest in backup power systems, voltage regulators, and surge protectors to safeguard their operations against electricity-related disruptions. 

Electricity generation in South Africa predominantly relies on coal-fired power plants, which contribute to environmental pollution and carbon emissions. The wine industry is increasingly focused on sustainability and environmental stewardship, seeking to minimize its carbon footprint and adopt renewable energy sources. However, the transition to renewable energy technologies, such as solar power and biomass, requires significant investment, regulatory support, and infrastructure development, posing challenges for wine producers. 

Policy uncertainty and regulatory challenges in the energy sector exacerbate the challenges faced by the wine industry in terms of electricity supply. Uncertainty regarding government energy policy, tariff structures, and renewable energy incentives can deter wine producers' investment in energy infrastructure and technology upgrades. Clear and consistent energy policies, coupled with supportive regulatory frameworks, are essential to incentivize investment in sustainable energy solutions and enhance the resilience of the wine industry to electricity-related challenges. 

South Africa Wine actively addresses the energy crisis by advocating for the wine industry's interests and concerns on various forums and platforms. Recognizing the significant impact of the energy crisis on wine producers and the broader industry, South Africa Wine serves as a vocal advocate, representing the industry's voice and narrative in discussions with policymakers, government agencies, and energy stakeholders. Through strategic engagement and advocacy, we raise awareness of wine producers' challenges due to energy shortages, load shedding, and high electricity costs. By amplifying the industry's concerns and advocating for solutions, we aim to influence policy decisions, drive regulatory reforms, and promote sustainable energy solutions that support the resilience and growth of the South African wine industry.  

Market Access

Market access for the South African wine industry faces several challenges. Mainly, these include:  

- International trade barriers (tariff and non-tariff) vary for different markets. 

- Competition from other wine-producing regions often comes down to pricing and stock volumes.

- Fluctuating exchange rates affecting export costs, South Africa has a very volatile exchange rate, which can be favorable for the - producer at times and favorable for the importer at other times, leading to its own set of challenges. 

- Stringent regulations in target markets often favor locally produced wines. 


Profitability among wine industry producers is indeed a significant challenge. Profit margins can be thin due to production costs, market competition, pricing pressures, and fluctuating demand. External factors like weather conditions, regulatory requirements, and economic conditions can further impact profitability. 

For smaller or boutique wine producers, achieving profitability can be incredibly challenging. Due to economies of scale, they often face higher production costs per unit, and they may struggle to compete with larger producers who can benefit from cost efficiencies. Moreover, establishing a brand presence and distribution network requires significant investment, which can further strain profitability, especially in the initial stages. 

However, producers must address these challenges openly and proactively seek solutions to improve profitability. This might involve optimizing production processes to reduce costs, diversifying product offerings to capture new market segments, implementing effective marketing strategies to enhance brand visibility and consumer loyalty, and exploring alternative revenue streams such as wine tourism or direct-to-consumer sales. 

Collaboration within the industry, sharing best practices, and leveraging collective resources can help producers navigate challenges and improve profitability. Additionally, staying informed about industry trends, consumer preferences, and market dynamics can enable producers to make informed decisions and adapt their strategies accordingly.

Sustainable Practices in South African vineyards; Source: Reuters 

Climate change

Gerard Martin, RDI (research and development) executive at South Africa Wine told me: 

Climate change has significant implications for the cultivation of grapevines for wine production. The grape-growing process is sensitive to climate conditions, and any shifts in temperature, rainfall, and extreme weather events can have positive and negative impacts on vineyards and wine production. 

The wine industry comprises a diverse collection of growing regions, and due to the Cape’s unique and dramatic topography, current climatic conditions and potential impact will vary significantly among regions. This has been the main driver behind the development of the TerraClim project, which is to understand the status and possible effects on a broader level. The research is still ongoing, and we look forward to the results. There is a common misperception that all regions are impacted similarly, e.g. getting warmer and dryer.  

The industry is taking the threat of climate change very seriously, evident in the significant investment in research and innovation on this topic over the last couple of years. Climate change is a flagship program in the Research Development and Innovation (RDI) environment.  

Flagship programs are large-scale, strategically focused, and highly ambitious research initiatives. They have been designed to tackle complex and significant challenges facing the South African wine industry. The programs are long-term endeavors that receive substantial financial support. Three flagship programs address climate change, water efficiency, and plant breeding. 

A summary of some projects in our Research and Development environment:

Assessing the drought tolerance of selected Grapevine scion cultivars under dryland Conditions in the Swartland region 

The project aims to determine the drought tolerance of selected alternative scion cultivars compared to reference cultivars. 

Several drought-tolerant scion cultivars, not currently extensively planted in South Africa but that could hold promise for the wine industry, have been identified. However, there is no scientifically based information regarding the growth, yield, and quality of the recommended alternative scion cultivars under South African conditions. 

This project aims to generate the knowledge to make recommendations on scientifically verified results. A new vineyard was established with 17 different scion cultivars. It must be noted that the project aims to assess grapevine responses in an almost worst-case scenario, i.e. under dryland conditions in sandy soil in the Swartland region. 

Producing quality grapes with limited water 

This study uses a holistic approach and novel techniques to evaluate and compare the adaptability and resilience of current commercial scion/rootstock combinations established and maintained under optimal and sub-optimal water conditions. 

A model vineyard where grapevine water stress studies can be conducted over the lifespan of grapevines on a vineyard scale was established in partnership between the South African wine industry and Stellenbosch University. A specialist Water Programme Committee designed this vineyard (site selection, row layout, and rootstock-scion selection). 

The model vineyard will be a long-term resource to transfer knowledge and skills to the industry and viticulture students on grape production with limited water. It will showcase the outcomes of limiting water on a seasonal basis and over many seasons on various scion/rootstock combinations.  

The impact of innovative technologies in monitoring water stress could also be showcased. 

Vineyards of the Future 

On a practical level, Vinpro launched a Vineyards of the Future project called the Gen Z Vineyard Project. Here, we are experimenting with new grape varieties, rootstocks, trellis systems, etc., on commercial farms in every growing region to build a pool of local knowledge on alternatives in the face of climate change. The project is based on a “seeing is believing” principle, and data is continuously uploaded for producers to track the progress of this exciting project.  

Some of the grapes planted in trials have been reaped up by early movers like Sakkie Mouton in the commercial space, and one can now buy wines from Mediterranean drought-tolerant varieties such as Assyrtiko (Greece) and Vermentino (Corsica) from the original Gen Z trials.  

Climate Change Industry Initiatives

Finally, Wanda pinpointed some of the initiatives of the industry to lessen the impact of climate change and protect the industry in the future. These include: 

From a research perspective – see TerraClim 

Source: Terraclim

The online Terraclim platform is a new, integrated technology tailored to agriculture. It is ideal for aiding long and short-term decision-making at the farm and field level in the context of climate change in the complex terrain of the Western Cape.  

Terraclim provides high-resolution terrain and temperature information based on a robust climate and terrain database. The project will maintain, extend, and improve the climate database and wireless logger networks. 

The Terraclim project aims to mine the geospatial database (geodatabase) for climate variability and cultivar suitability information. This goal aligns well with South Africa Wine’s strategy. 

This project will ultimately:

1) provide up-to-date climate situational reports for within-season decision-making

2) delineate areas most at risk of climate variability to inform new plantings

3) map terroir to understand wine character better

4) identify areas most suitable for the planting of specific cultivars

5) maintain and expand the centralized climate database. 

From a knowledge transfer perspective – see 

Finally, the IPW regulatory system promotes various sustainable practices through a scoring/auditing system, and the WWF Biodiversity in Wine Initiative demonstrates how natural areas bring ecosystem resilience. 

Thank you to Wanda Augustyn and everyone else at South Africa Wine for providing this detailed perspective on this wonderful vinous nation.

South African winery; Source: iStock

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