Innovate to survive in the SA wine industry
Farmer's Weekly|August 06, 2021
For many businesses, COVID-19 brought with it tragedy, but for family-owned winery Van Loveren, it has served as a catalyst for change. Susan Marais spoke to managing director Phillip Retief about the way in which the pandemic inspired innovation in their business.
Susan Marais

FAST FACTS

The Van Loveren winery lost a quarter of its turnover last year due to South Africa’s COVID- 19 lockdown regulations.

The company has formed three black economic empowerment collaborations.

Within the next three years, 20% of Van Loveren’s wine grape intake will be sourced from B-BBEE producers.

The COVID-19 crisis and its related lockdowns hit businesses hard, and none more so than those in the alcohol and wine industry. As a result of the 2020 ban on alcohol sales in South Africa, which lasted for a total of around five-and-half months, Van Loveren winery in Robertson, Western Cape, run by the four Retief cousins, lost 25% of its turnover and a beloved B-BBEE partner.

However, the cousins didn’t lose their way; instead, the Van Loveren team chose to focus on innovating their marketing and product. And, unlike many other businesses, they were able to retain all their staff during this difficult period.

“Local wine sales were impossible for half [of 2020], but luckily we sell 40% of our wines overseas. This gave us a nice buffer,” says Phillip Retief, managing director of Van Loveren. He believes that diversification has been the family business’s saving grace. “I don’t think all wine companies necessarily did badly in the past year. Many do a lot of business overseas, and I think the weakness of the rand [last year] drove sales and assisted in growing margins.”

Van Loveren produces 1,5 million nine-litre cartons of wine per year. The Retiefs’ farming operations comprises 1 000ha of irrigated wine grapes, citrus, almonds and cherries. “We’re on a bit of an exploratory mission,” says Retief. “Yes, we are still primarily a wine company, but we have realised the value of diversification; not only in terms of branding and wine styles, but also with regard to moving into other products in order to better manage risk.”

They planted their fruit trees five years ago, and they are only now starting to bear. “It takes about 10 years to get a new product running in agriculture,” explains Retief.

AN UNFRIENDLY ENVIRONMENT

The Retief cousins have known for at least the past five years that the wine and liquor industry is not in government’s good books. “We knew this even before the [COVID-19] pandemic, but the events of the past year brought the simmering pot to a boil. The Disaster Management Act has made it easy for officials to do what they have wanted to do to the [wine and alcohol] industry for a long time. As a business, we needed to take this into account when planning our future.”

Going forward, the Retiefs anticipate even more changes to the local wine sector. “It could be a [curbing of] business hours, a minimum packaging volume, minimum unit pricing, or a higher legal drinking age,” says Retief.

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