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With South Africa Category Stuck In Neutral, Cape Classics Bets On France

February 10, 2017

New York-based Cape Classics, the leader of the South Africa wine category in the U.S. with a 25%-30% share, has aggressively diversified its portfolio lately, assembling a range of upscale French wine brands from the Loire, the Rhône and Burgundy, with an entry into Bordeaux expected in the near future.

“The French part of our business is growing rapidly. I think we’ll eventually cover most of France,” says André Shearer, Cape Classics’ chairman and CEO. “We plan to have about 25 to 30 strong French brands,” up from the current 15, he adds, noting that many French wineries have been revisiting their U.S. routes to market as a result of generational transitions or ownership changes over the past decade. Cape Classics’ French offerings currently account for about 12% of the group’s sales. With France providing a boost, Shearer projects company revenue to rise by as much as 50% in the next four to five years.

Among the key French brands in Cape Classics’ stable are the Loire’s Vincent Carême, Burgundy’s Philippe Colin, Roussillon’s Mas Janeil (François Lurton) and the Rhône’s Pierre Dupond. The French portfolio has also allowed Cape Classics to make further inroads with retail and restaurant partners who’ve been reticent about diving into the South Africa category full-tilt, Shearer observes.

Meanwhile, the company’s core South Africa business continues to show potential for the long term, particularly with the Chenin Blanc varietal. But for now, the U.S. category is “stuck,” Shearer says. “I don’t think it’s ever had a higher degree of respect amongst the trade and press,” he notes. “But it remains invisible as a regional brand that people can understand and feel an affinity for.” Shearer believes South Africa has missed opportunities to build a regional identity in the minds of U.S. consumers in the way that fellow New World wine marketers like Australia and New Zealand have over the past couple decades. “As a nation, we should be putting together a strategy in which we take 25 phenomenal products from South Africa that could become entrenched in the U.S.,” he says.

Overall, South Africa’s bottled wine shipments to the U.S. have hovered between 900,000 and 1 million cases annually since 2005. Cape Classics’ two biggest South Africa brands, Excelsior and Indaba, combine for roughly 150,000 cases in the U.S. Indaba recently unveiled a new “Indaba Education Fund” under which a portion of the brand’s global sales are dedicated to early childhood education efforts in South Africa’s Cape wine country. The philanthropic effort has also included contributions from Cape Classics’ U.S. distributor partners like Southern Glazer’s, Fedway and M.S. Walker. —Daniel Marsteller

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