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U.S. Economist Tells South Africa: Don't Focus on One Variety

Mike Veseth, the keynote speaker at this year's Nederburg auction
© Nederburg Auction | Mike Veseth, the keynote speaker at this year's Nederburg auction
Wine-growing countries must remain versatile.

South Africa's wine industry has been warned that it should not follow New Zealand and Argentina's lead in focusing on one grape variety to win over export markets.

Mike Veseth, the author of "Wine Wars," who is also known as "The Wine Economist," was the keynote speaker at the 38th Nederburg auction. He told delegates that South Africa should learn lessons from the tendency of other New World countries to become one-trick ponies.

“When you look closely right now, Marlborough sauvignon blanc has penetrated the [American] market. But realistically it has only opened the door for more Marlborough sauvignon blanc," said Veseth. "I thought it had opened the door for Central Otago pinot noir, but that was the 'Sideways' phenomenon."

In addition, he said, "the riesling, the pinot gris and the beautiful Hawkes Bay reds are not flooding in."

Veseth, who is professor of international political economy at the University of Puget Sound in Washington State, reported that the same problem had befallen Argentina and malbec – one of the fastest-growing categories in the United States. Despite malbec's success, the grape had failed to pave the way for the other varieties that Argentina produces. “A signature varietal can open the door, but how wide will the door open? How many of your wines can you get through?” Veseth asked.

Jonathan Snashall, a local South African wine consultant, is hopeful that the country's most-planted white variety, chenin blanc, could be a calling card.

“Chenin blanc could be our zinfandel, our malbec or our sauvignon. We can blow the world away with our chenin," Snashall said. "The problem is, chenin is not as international as chardonnay and many people haven't even realized it is a variety."

Chenin blanc accounts for almost one in five vines in South Africa, but the country's wider varietal portfolio is diverse. In the United States, however, limited shelf space makes it difficult to communicate that diversity to consumers. Veseth recounts how a national wine distributor told him: “South Africa has two feet to tell its story." In Veseth's view, "the story that is often told is defined not so much by the wines as by their labels.”

Many of these labels are “critter” wines (those which feature animals) from wineries such as Goats do Roam, Wolftrap and Porcupine Ridge. Veseth says that firstly, there's a danger they could be confused with Australian brands, and secondly, they could come to define South Africa's image.

"While they [critter brands] can be hugely successful for the individual wineries that deploy them, they can potentially undermine a region’s reputation if they are so numerous and prominent that they become the de-facto collective brand. So Brand South Africa could use an upgrade in the United States if you want to expand beyond the self-limiting critter category.”

Snashall believes a lack of knowledge about the modern South Africa has also inhibited the success of the country's wines overseas. “Buyers love your wine, and then you say, 'Africa,' and the shutters come down," he said.

"Ignorance is rife about South Africa. There's Aids, apartheid and famine. It's hard for them to picture that something elegant and refined could come out of Africa."

You can view Mike Veseth's full speech at the Nederburg auction here.

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