TRANSFORMATION
Wine sector requires renewal
It is unlikely that the wine industry will be able to capitalise on growth without also integrating a strong transformation agenda
Widely regarded as one of SA’s most promising economic sectors, the wine industry is still struggling to deliver a return on investment, which is now at less than 1%. For an industry that provides direct and indirect employment to 300,000 people it is critical to increase profitability. Intuitively, if value were commensurate with SA’s reputation for wine, the aggregate price points realised would be higher. However, price-taking behaviour, the sheer quantity of disparate voices in the industry, and institutionalised preference for driving volume through bulk wine channels, among other factors, have stymied the price advantage gained by a recent leap in product quality. The Wine Industry Strategic Exercise (Wise) report-back indicates that production is 60% bulk and 40% packaged product. The target is to reverse this to 40:60 by 2025. Transformation is behind target too. While the Wise measure for transformation in the industry has improved from 1.5% in 2015 to the current 2.5%, thi...
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