For most people, especially those who enjoy wine, it\u2019s more about adding value to their lives than just making money.<\/p>\n\n\n\n
\u201cIf you’re thinking of wine purely as a commodity, then of course, there’s no sentiment, no feeling of attachment, no real interest in the quality.<\/p>\n\n\n\n
\u201cAll you want to know is that, in the future, it will be worth significantly more than what you paid for it.\u201d<\/p>\n\n\n\n
\u201cI think the downside of that, besides the obvious \u2013 which is that you don’t get to enjoy your hard asset investment \u2013 is that it’s quite a difficult investment to dispose of in the South African market.\u201d<\/p>\n\n\n\n
There are not a lot of places collectors can go to sell their wine, and the places that do, like auction houses, cut into the seller\u2019s profits. <\/p>\n\n\n\n
\u201cThe commission that they charge takes away a lot of the potential profit you may have made.<\/p>\n\n\n\n
\u201cSo I think we should think of wine as a sentimental and emotional investment in the same way as we think of experiences and in the same way as we think of art.\u201d<\/p>\n\n\n\n
When investing in wine, Fridjhon said that people should start by buying the wines that they personally enjoy. When they realise that they have bought too much, they can look towards selling. <\/p>\n\n\n\n
\u201cThere may come a time when you realise you have to rationalise what you’re holding, and that’s the point at which you hope that what you sell will do one of two things.\u201d<\/p>\n\n\n\n
In the first place, sellers can try to make a net profit on the transaction, or secondly, they can use that money to fund their future wine purchases. <\/p>\n\n\n\n
\u201cThat’s an ideal way to look at wine investment,\u201d he said. Buy it when it\u2019s young, store it well under the right conditions, and later sell it for more. <\/p>\n\n\n\n
That way, you get to enjoy some wine now, and down the road, the wines you\u2019ve saved can bring in a return, allowing you to keep enjoying good wine in the future.<\/p>\n\n\n\n
That way, \u201cyou really have done the best you can.\u201d<\/p>\n\n\n\n
\u201cYou’ve had the enjoyment of what you’ve chosen to consume and the pleasure of knowing that what you’ve deferred gratification over has yielded a dividend in more good wine running endlessly into your future.\u201d<\/p>\n\n\n\n In 2023, South Africa’s exports of still packaged wines dropped<\/a> by 17.3%, reaching 113 million litres. Total still red wine exports fell by 9.4%, making up 32.3% of all natural wine exports. <\/p>\n\n\n\n Despite the decline in volume, which totalled 306 million litres, the industry saw positive value growth, with total wine export revenues rising to US$540 million (R10 billion), even amid global economic challenges.<\/p>\n\n\n\n Fridjhon explained that there are a number of factors driving the current resurgence of the wine industry in South Africa.<\/p>\n\n\n\n First, it’s important to realise that the wine industry can be divided into two parts. <\/p>\n\n\n\n One part is focused on high-volume bulk wine production, which is heavily influenced by market trends. <\/p>\n\n\n\n \u201cSo, what we’ve seen is that there is an uptick in sales to China, and that’s because of our relationship with China.\u201d<\/p>\n\n\n\n Last year, South Africa\u2019s wine exports to China decreased, but the market remains an important growth area for the local wine industry and has steadily increased its market share since 2019.<\/p>\n\n\n\n \u201cI think it could be much stronger if the Government of National Unity (GNU), the Department of Trade and Industry (DTI) start trying to do trade-related deals to ensure South African wine gets into that market duty-free as the Australians, for example, have done.\u201d<\/p>\n\n\n\n At that point, he said that South Africa would see large volumes of relatively low-priced wine entering one of the biggest wine markets in the world. <\/p>\n\n\n\n On the other end of the spectrum, there is also the high-end market, which has seen remarkable growth over recent years. <\/p>\n\n\n\n Fridjhon explained that there has been an increase in the number of small producers over the last 20-25 years which has also driven the resurgence in South Africa\u2019s wine market. <\/p>\n\n\n\n These \u201cyoung, ambitious, technically competent\u201d winemakers seek out fruit from vineyards which are sometimes quite old and obscure, \u201cmany of them with old vines where the concentration of fruit is a lot better\u201d.<\/p>\n\n\n\n \u201cThese are the wines that are gaining profile internationally. So in the sort of markets of the world where the important wine critics look at countries and decide whether or not they are sexy\u2026 South Africa has a very high sexy index at the moment.\u201d<\/p>\n\n\n\n \u201cMost of the international critics are saying South Africa is producing the most exciting wines in the world.\u201d <\/p>\n\n\n\n These wines are often produced in small batches, making them rare and sought-after.<\/p>\n\n\n\n However, there\u2019s a downside. Because small-batch wines are rare, they’re hard to find, and once people have them, they’re not eager to sell. <\/p>\n\n\n\n \u201cWhen you’ve got something that no one else has, it’s the one thing you are least keen to give up.\u201d<\/p>\n\n\n\n![\"\"](\"https:\/\/businesstech.co.za\/news\/wp-content\/uploads\/2024\/10\/vineyards-near-Stellenbosch-on-South-Africa-1-1024x576.jpg\")
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