South Africa to focus on US and emerging African markets says new WOSA chief
South Africa will increasingly target the entire domestic market of Africa along with the US as trading conditions become ever more challenging in mature export markets such as the UK, according to the new head of Wines of South Africa (WOSA).
Siobhan Thompson, who starts work as chief executive at the promotional trade organisation this week, stressed the country’s biggest export destination would remain a key focus but the challenge was maintaining momentum in the UK.
Thompson, whose previous dealings with UK retailers were in her former role as global head of marketing for Distell’s liqueur brand Amarula, said: “I have seen over the years from personal experience how the supermarkets have pushed margins down and that’s become quite difficult in terms of trading. But that doesn’t mean the UK is not still an important market. It’s all about maintaining momentum.”
Thompson said African countries like Angola and Nigeria had huge potential, as did the US which is only on the beginning of its journey with South African wine.
“These [African] countries are improving economically and have an emerging middle class which is starting to be introduced to wine”, she said. “There are obviously the complexities of dealing with third world countries, but from what I’ve seen on my travels there’s a huge opportunity.
“Then, I think the US has to be a target. It’s quite a complex market, but wine as a category is still growing and there has been huge growth in terms of brands entering the market. South Africa is still very small in terms of its presence there. It needs to be focused and it needs to have the right wines there.”
The rand weakened 38% against the pound between January 2011 – January 2013 (Nielsen) and Thompson said although this could benefit exporters selling wine in foreign exchange, the downside was the increasing cost for those using rands for marketing spend like WOSA.
Thompson said her focus was to learn as much as possible first, but she believed South Africa had a great marketing story in terms of the “diversity and quality of the wines” as well as the beautiful landscape and cultural richness.
The latest Nielsen stats show there has been a big increase in South African bulk wine exports, with Germany, the UK and Russia the leaders in this segment. In bottled wine, UK is still number one followed by Sweden and Germany and the UK is still the leading export destination overall.
* You can read a more in-depth interview with Siobahn Thompson in our Q&A section here.