27 October 2021
With so much happening in the world of wine and in the wider world that impacts wine, we are repositioning our quarterly newsletter from the CEO. The idea is to track important trends and developments and consider their potential significance for our industry.
In this issue we highlight new export gains and, with all eyes on the upcoming UN Climate Summit COP 26, we look at some of the related topics of sustainability, transparency and packaging.
SOUTH AFRICAN SPARKLING SUCCESS
This year, South Africa celebrates 50 fabulous years of sparkling wines made according to the traditional méthode Champenoise. For a long time, they were referred to as MCCs (Méthode Cap Classique) but now the straightforward term Cap Classique has been adopted by all local producers. With no more acronyms, it’s clearer, catchier, easier to recall, highlights origin and helps us to differentiate our traditionally made bubblies from those produced in other countries. This is especially important as exports grow.
Daniel Mettyear, research director at IWSR Drinks Market Analysis, is confident the global wine sector, sparkling wine included, will recover fully from the pandemic by 2023. (https://www.thedrinksbusiness.com/2021/05/unfinished-fizzness/) He told The Drinks Business there’s expected to be an almost twofold increase worldwide in the proportion of sparkling to still wine sales, saying: “The volume share of sparkling wine globally in 2014 was around 10%, but by 2024 we expect that to be 18%, so a big increase.”
Until recently, nearly 85% of Cap Classique was sold domestically but that’s changing. With more shout-outs from overseas critics, the trade and scintillating results achieved on international shows such as the Decanter World Wine Awards, (https://www.decanter.com/decanter-world-wine-awards/success-for-south-africa-462841/) they’re acquiring a whole new cachet.
Internationally, Cap Classique falls within the upper-middle price segment. This places the segment well above Prosecco and many Cava expressions, but below Champagne. Adding to their reputational and pricing allure, these bubblies have a distinctive South African flair and intriguing provenance for those new to the category.
Here’s a quick value growth snapshot of our three biggest Cap Classique markets for the 12 months to September 2021: year-on-year sales rose in the UK by 34%; in the US by 19% and the Netherlands by 55%. There were other standout performances in Germany (18%) and, off a smaller base but still very encouraging: in China (63%) and Canada (21%).
When South Africa established the Integrated Production for Wine (IPW) in 1998, it was hailed as a far-reaching programme to promote fully traceable production integrity and to improve compliance with newly set eco-, and later, socially sustainable standards. Then in 1995 Sustainable Winegrowing New Zealand was formed, followed by similar initiatives in California, Australia, Chile and elsewhere.
These bodies have done a great deal to embed more eco- and socially sustainable wine- growing and winemaking practices in their respective regions. But if we take note of recent alerts from organisations like the Intergovernmental Panel on Climate Change, all industries, wine included, have much work ahead, and time isn’t exactly on our side.
Of course, we’ll hear a whole lot more on this subject at the upcoming COP 26 UN Climate Change Conference in Glasgow, and also Planet: Tech in Lisbon.
Both these climate change platforms have stressed before that we need global collaborations to solve global problems. The same applies in the wine industry. Collectively we can do more to address the impact of new weather patterns, land usage, water scarcity and habitat destruction, and across the supply chain, to offset the impact of GHG emissions, packaging and waste. We can also help each other to find solutions in fighting the corrosive impact of social inequality and intergenerational poverty.
Here’s the thing, by collaborating, we also get to set universally accepted metrics and standards that mean the same things to industry players and consumers, wherever they are.
That’s why WoSA is so proud to be a founding member of the newly created, Sustainable Wine Roundtable (SWR), along in South Africa with WWF and producer Journey’s End. To date, SWR is the only global, independent coalition to include all wine value-chain stakeholders. As I write, it is working towards defining sustainable wine in practical detail and in developing a global wine sustainability standard.
This is in no way to negate the value of our individual local bodies. They do absolutely essential work in raising and implementing sustainability standards. But just think how much better can we all do and be, if we have the means to share and learn from each other’s research and best practice.
No doubt, a growing area of SWR’s concern will be fire management and smoke taint. With our own summer just starting, we welcome any new understanding to help us through the season.
There are, of course, other international coalitions already in place. Some South African producers are members of the Porto Protocol, also representing the entire viticultural value chain. Stellenbosch Wine Routes is both a partner and a member of this non-profit that aims to be a catalyst for better managing climate change.
The International Wineries for Climate Action (IWCA) is another collaborative working group of environmentally committed wineries wanting to “decarbonise” global wine. Founded in 2019 by Familia Torres and Jackson Family Wines, it has since added many new members. And we are fortunate that Jackson Family Wines has a presence in South Africa.
You may have come across reports on the new e-label platform pilot launched by the EU’s wine (Comité Européen des Enterprises Vins) and spirits industries. Ultimately the idea is to give consumers standardised information on ingredients, nutritional values, responsible drinking guidelines and sustainability details, including where and how ingredients are grown and sourced. Scanning QR codes, users are taken to a website where the information supplied per product can be accessed in any of the EU’s 24 main languages.
For wine producers, the U-Label, as it is known, will create a template for presenting mandatory information set by EU legislation. Additional voluntary information will also be accommodated, provided it isn’t of a marketing nature.
This is yet another example of promoting standardisation and transparency, and for those of our members exporting to EU countries, it is important to investigate. Although at the moment, supplying the information for the template is voluntary, that could change. In time, it could provide the basis for the proposed, wide-ranging label requirements the EU is currently considering.
Labelling takes me to packaging. We’ve already updated you on Government’s amended legislation covering the new Extended Producer Responsibility Scheme set for paper packaging and some single-use products. The intention is to curtail their environmental impact and wastage, encourage reuse, recycling and recovery and so reduce the “environmental toxicity of the resulting post-consumer waste stream”.
Estimates vary, but from a range of research projects undertaken in many parts of the world, anything from 40% to 50% and more of a wine producer’s carbon output is produced from packaging and the transportation of wines.
There have been many exciting developments in sustainable packaging in recent years. Increasingly, sustainable packaging is becoming an important touchpoint for consumers. We know this from the extensive marketing and behavioural economic discussions online and in boardrooms, on what Millennial and Generation Z wine lovers want. Quite bluntly, they want to know more about the impact on the planet of not just what they eat and drink, but how it reaches them.
South Africa is no different. More brands are offering their wines in cans (about 55% recyclable, lighter and easier to transport than bottles). More premier wineries are selling their brands in bag-in-boxes, and, as you may have heard, producers of PET-recycled flat-bottles, Garçon Wines recently announced plans to explore opportunities in South Africa.
I was very interested to read an article recently in Time (https://time.com/6101846/is-reusable-packaging-sustainable/) that suggests “recycling our way out of [the climate crisis] will not work,” but that “Reuse, as well as plain elimination of a lot of packaging we don’t need, will also have to be a crucial part of the solution”.
The thinking is that replacing single-use containers with those that can be used again and again, is one important strategy. Certainly, glass is one material that fits the bill. Glass collection and deposits paid to those returning bottles already do provide vitally necessary employment in South Africa.
According to the World Economic Forum, a single flight from London to New York generates almost 1,000kg of CO² per passenger, compared with the average bottle of wine that releases just over 1kg of CO² over its lifetime. Taking just carbon into consideration, you’d need three years of having a bottle of wine a day to match the emissions of one cross-Atlantic flight.
But, repeatedly reusing glass or the aluminium, however noble in intention, still doesn’t account for the water and energy associated with lengthening the lifecycle of these materials.
As an optimist, I look forward to even more transformative innovations in packaging materials. It’s great that we are re-imagining wine containers, using more biodegradable inks and labels, that we are opting for recycled cartons to transport wine and compostable pulp liners for shipping direct to consumers.
But can the global wine industry also become a next-level sustainability innovator? Already, grape waste is being repurposed in exciting new ways from grape seed oils to fertilisers to dietary supplements. What next can we do with packaging itself?
Till next time.