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South African Wines Gaining Traction In U.S.

June 30, 2014

South African wine may still be a relatively small category in the U.S. market—with bottled shipments up 11% to 954,000 cases last year—but its expansion has accelerated lately, and key players are bullish on growth opportunities, especially at the premium end.

“Where South Africa is showing the most growth is not under $10, but in the $10-$15 and $15-$20 tiers,” says Johann Meissenheimer, managing director of Indigo Wine Group, whose South African portfolio includes the Robertson, Rustenberg and Groot Constantia labels. “It’s safe to expect 10%-15% growth for the category the next five to 10 years.”

Jerry Neff, president of Vineyard Brands, which imports the MAN Family Wines, Fairview and Goats Do Roam brands among others, agrees. “We’re seeing quite a bit of activity for wines over $20. That’s probably the most encouraging thing,” he says.

Meanwhile, South Africa-centric wine marketer Cape Classics has shown recent success with its Bayten label ($14.99 a 750-ml.) “In the last six to eight months this category has changed gears,” and is gaining momentum, says Cape Classics president and CEO Robert Bradshaw.

Another South African brand on the move is Mulderbosch Vineyards, which has seen significant investment since being acquired by Terroir Capital in 2011 and aims to triple its U.S. sales volume to 150,000 cases within five years. Mulderbosch has focused on its Chenin Blanc ($13-$14), Sauvignon Blanc ($17), Rosé of Cabernet Sauvignon ($10), and Faithful Hound Bordeaux blend ($25) in the U.S.

The United States is the sixth-largest export market for South African wine, with the U.K. taking the top spot at 4.5 million cases, according to Impact Databank. But trade group Wines of South Africa (WOSA), says the U.S. is where it’s now investing its greatest resources. “South Africa has always been known for offering value for money, but there’s an opportunity to get above that—to the above-$20 segment,” says WOSA’s CEO Siobhan Thompson.

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