South African Wine Industry Uncorks Opportunities

Wine-making is one of South Africa’s oldest industries and plays a key part in the country’s economy. And now both wine making and production are being transformed and creating new economic opportunities. Once seen only as the preserve of the country’s white minority population, wine is slowly becoming a black thing too.

With exports growing from less than 50 million litres in 1994 to more than 400 million litres in 2008 – year-on-year growth of 17 percent – it is an industry that would be remiss if it didn’t share the profits of this success with the 80 percent of the country’s population who are black.

Since the end of the racist Apartheid regime (http://en.wikipedia.org/wiki/South_Africa_under_apartheid) in the mid-1990s, various government and industry initiatives have begun to reverse the iniquities of the country’s wine-making industry – and in turn, introduce more black South Africans to the pleasures of drinking this fine local product.

One product of this shift in sentiment is Zimbabwean Tariro Masayiti. A vintner for the prestigious South African winery Nederburg, he made history by being commissioned to create two of the three selected official wines for the World Cup of football held in South Africa this year. His Sauvignon Blanc and Dry Rose were drunk while fans watched the competition.

He says his introduction to the world of wine-making came about by chance.

“It was by accident really,” he said. “My brother used to work at a farm close to the Mukuyu wineries in Marondera (Zimbabwe). During my days at the university he recommended I do general work at the winery as I needed pocket money and something to help my family with.

“It was here that I got interested in winemaking. I used to see visitors from all over the world and some of them encouraged me to take up winemaking as a career. I applied and was accepted for a place at the University of Stellenbosch where I studied Viticulture and Oenology (winery),’ Masayiti told SW Radio Africa news.

“I was headhunted by Nederburg before I even finished my studies.”

Masayiti’s job involves testing the grapes that go into the winery’s product.

“I smell them and at the same time look for specific characters and flavours,” he said. “You improve on the job with training – you just need to taste a lot of wine. You need to love wine and having a science background is useful, so you understand the technical processes. But one thing that serves me well is I am dedicated and passionate about winemaking.”

Another symbol of these changes is Vernon Henn, general manager of Thandi wines (http://www.thandi.com). He worked his way up to this prestigious role in the white-dominated South African wine industry from being an office cleaner. Thandi is the first wine brand in the world entirely owned and run by a black collective.

Thandi (which means “nurturing love” in the Xhosa language) was started in 1995 and became the world’s first Fair Trade-certified wine in 2003. It sells cabernet sauvignon, merlot, pinot noir, sauvignon blanc, semillon, chardonnay and chenin.

“The whole of the industry has been changing slowly,” Henn told the Guardian newspaper. “We can now up the pace of transformation. There’s still a misconception that anything from black-owned manufacturing has to be inferior. We have always focused on quality and tried to redress misconceptions about black-owned labels.”

Other black-owned labels include M’hudi (http://www.mhudi.com); Ses’fikile (http://www.winedirectory.co.za/index.php/138/sesfikile), led by three former township schoolteachers; and Seven Sisters (http://www.sevensisters.co.za/wmenu.php) – cultivated by seven sisters.

“We are a tiny minority but we are here to stay,” said Vivian Kleynhans of the African Vintners Alliance, comprising eight companies led by black women. “So they will just have to accept us.”

Another success is the Indaba brand (http://twitter.com/IndabaWines) first launched in the US in 1996, just after South Africa became a democratic republic. “Indaba” is the Zulu word for “a meeting of the minds,” or a traditional gathering of tribal leaders for sharing ideas.

The brand was created as a celebration of the democratization process in South Africa, and from its inception the wines have conveyed the spirit of South Africa to the world’s wine drinkers.

The Indaba range of wines consists of the Indaba Sauvignon Blanc, Indaba Chenin Blanc, Indaba Chardonnay, Indaba Merlot and Indaba Shiraz.

There is also the 6^th annual Soweto Wine Festival (http://www.sowetowinefestival.co.za/About.htm) held in the Soweto township of Johannesburg. Soweto was home to the resistance against the Apartheid regime, and still has a very poor slum area in its midst. But it is also home to the new and rising black middle class. Many parts of Soweto could now pass for affluent suburbs in any wealthy country. Hatched as an idea in 2004, the wine festival is about “introducing South Africa’s quality wines to the remaining 80 percent of our population,” says Mnikelo Mangciphu, co-founder of the Soweto Wine Festival. “Wine is not for white South Africans only to enjoy. It should be a way of life for all South Africans.”

Mangciphu is also the owner and manager of the only wine shop in Soweto – Morara Wine & Spirit Emporium, which he launched after the first Soweto Wine Festival in 2005.

The idea behind the festival is to shift attitudes in South Africa about wine drinking. Soweto has been the home to many trends in the country, from politics to fashion to pop music. And so it seemed the right place to start shifting attitudes towards wine. The number of participants has grown from 3,000 people to 5,520. Five years after it began, the festival showcases wines from 103 wineries.

Mangciphu had spotted a shift in drinking habits away from just beer and so he opened his wine boutique in Soweto to cater to these new tastes. The shop is an elegant place with wooden shelves displaying the bottles of wine.

South Africa’s wine industry now employs around 257,000 people directly and indirectly, including farm labourers and those involved in packaging, retailing and wine tourism.

Wine tourism alone employs over 59 000 people. The Western Cape region, home to much of the wine industry, has seen its economy grow on the back of wine tourism.

By volume, South Africa ranks ninth in the world for wine production.

There is a scholarship fund also available to encourage young people to enter the South African wine industry as a career. Mzokhona Mvemve was one of the first awarded the Indaba Scholarship and became South Africa’s first black wine maker in 2001, working for Cape Classics.

By David South, Development Challenges, South-South Solutions

Published: October 2010

Development Challenges, South-South Solutions was launched as an e-newsletter in 2006 by UNDP's South-South Cooperation Unit (now the United Nations Office for South-South Cooperation) based in New York, USA. It led on profiling the rise of the global South as an economic powerhouse and was one of the first regular publications to champion the global South's innovators, entrepreneurs, and pioneers. It tracked the key trends that are now so profoundly reshaping how development is seen and done. This includes the rapid take-up of mobile phones and information technology in the global South (as profiled in the first issue of magazine Southern Innovator), the move to becoming a majority urban world, a growing global innovator culture, and the plethora of solutions being developed in the global South to tackle its problems and improve living conditions and boost human development. The success of the e-newsletter led to the launch of the magazine Southern Innovator.  

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Chinese Trade in Angola Helps Recovery

Two-way trade between Africa and China has been an outstanding success story of the past decade. It has led to significant new investment in the continent and brought many new job opportunities. The Chinese community in Africa comprises a mix of entrepreneurs and workers. In formerly war-torn Angola, Chinese workers and investors have led an economic boom as the country recovers from decades of conflict.

The Chinese are generally young, well-educated, English-speaking, ambitious and hard-working. Estimates put the number of Chinese people in Angola at 100,000, and about 1 million across Africa.

The reason these bright young things need to come to Africa goes back to the essential reality of modern China: despite rapid economic growth, per capita incomes classify it as a poor country. While the outside world sees the glitzy, go-go progress of China’s cities, the country’s rural poor go unseen. Around 400 million of China’s 1.3 billion people have annual per-capita income equivalent to US $8,000, while the remaining 900 million have per-capita incomes as little as one-tenth that amount.

Some 6.3 million people in China will graduate this year from university, and it is still very hard for a well-educated Chinese person to get a good job right away. More than a quarter of these graduates will be unemployed, according to the Education Ministry.

There has also been disquiet in parts of Angola over China’s role, with some calling it “neo-colonialism”. But clearly, both Africa and China have much to gain by increasing cooperation.

In the southern Chinese city of Guangzhou (http://en.wikipedia.org/wiki/Guangzhou), a trading hub nicknamed “Africa Town” has emerged since 1998. There are officially 20,000 African traders and entrepreneurs in the city of 18 million, but unofficial estimates put the number at more than 100,000. This African trading hub has emerged to the benefit of both the Chinese and Africans. It is a coming together of small traders matching Africa’s strong demand for consumer goods with China’s manufacturing powerhouse.

In Angola, the mix of entrepreneurs and workers is having a big impact on the country’s development.

Betty, a 22-year-old Chinese woman who has various projects in Angola, including the local Chinese language newspaper, is a typical go-getter.

“I am doing much better here than if I had stayed in China,” she told the BBC.

Another beneficiary of the two-way trade is Deng, a construction a worker: “I earn twice as much as I would at home and I have got a better job,” he said.

For most Chinese, foreign travel is still rare and the excitement of going to Africa to work both attracts and repels because of the continent’s reputation.

“At first I found it frightening, “said Wang. “You hear lots of stories of Chinese people being robbed by the locals.” But he found “there are great opportunities here.”

Another, Jet, who runs an air conditioning business, came to Angola five years ago.

“Everything had been destroyed,” he recalled. “There were no roads, railways, shops, nothing. Some Western companies were already here selling their products but I knew I could import things cheaper from China.”

The large infrastructure projects being undertaken by major Chinese companies are also creating new opportunities. Many Chinese labourers are working on building roads, railways, hospitals and vast housing complexes.

One of the more visible symbols of Chinese investment in Angola is the restoration of the Benguela Railway (http://en.wikipedia.org/wiki/Benguela_railway), considered one of the great routes of Africa and built by British contractors. An engineering triumph, its 1,344 kilometres (835 miles) of track stretch up the Angolan coast, right into southern Congo. The railway took almost 30 years to build in the late 19^th and early 20^th centuries, but little remained. Until very recently all but a tiny stretch of the line was closed. Now Chinese investment is rebuilding the railway and bringing economic improvement in its wake.

“I couldn’t do this before the railway was fixed,” a woman using the train to get to the market to sell her plump red tomatoes told the BBC. “Before, I had to travel by car which was much more expensive.”

And her income has improved along with the refurbished railway. “I am not rich, but a bit richer,” she said.

And unlike the British, who used the railway to export copper without paying for the resource, the Chinese labourers are getting paid and the Angolan government is paying back the Chinese loan for the railway repairs by selling oil overseas for a market rate.

By David South, Development Challenges, South-South Solutions

Published: October 2010

Development Challenges, South-South Solutions was launched as an e-newsletter in 2006 by UNDP's South-South Cooperation Unit (now the United Nations Office for South-South Cooperation) based in New York, USA. It led on profiling the rise of the global South as an economic powerhouse and was one of the first regular publications to champion the global South's innovators, entrepreneurs, and pioneers. It tracked the key trends that are now so profoundly reshaping how development is seen and done. This includes the rapid take-up of mobile phones and information technology in the global South (as profiled in the first issue of magazine Southern Innovator), the move to becoming a majority urban world, a growing global innovator culture, and the plethora of solutions being developed in the global South to tackle its problems and improve living conditions and boost human development. The success of the e-newsletter led to the launch of the magazine Southern Innovator.  

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Palestinian Olive Oil’s Peaceful Prosperity

The economic devastation of the conflict between Israel and the Palestinians (http://en.wikipedia.org/wiki/Palestine) has brought much hardship to the Palestinian people. The United Nations under the UNRWA mission has been working to lesson the hardship for over 60 years (http://www.unrwa.org). But there is only so much it can do.

However, several business initiatives are creating strong Palestinian food brands to improve the reputation and awareness of Palestine around the world. In particular, Palestinian olive oil has led the way and enjoyed strong sales in countries like the United Kingdom.

Since 2004, the Palestine Fair Trade Association (PFTA) (http://www.palestinefairtrade.org) has been leading the movement of fair trade producers in Palestine, linking small Palestinian farms in fair trade collectives and cooperatives across the country.

Zatoun (http://www.zatoun.com) – or Zaytoun (http://www.zaytoun.org) as its known in the UK – are olive oil and soap brands using the Arabic word for olive. Olive oil (http://en.wikipedia.org/wiki/Olive_oil) is a popular cooking and seasoning oil and is sought after for its health benefits. Most of it is cultivated in the Mediterranean region, with Spain the largest single producer. Like wine, the quality of the olive oil varies greatly and the bouquet and viscosity of the oil play a big role in how consumers select a brand. The trend in the past 10 years has been for consumers to be more selective about the olive oil they buy and to be more informed about the choices available. This increasingly sophisticated consumer choice is what is helping the Palestinian oil succeed.

Another factor is the growing global popularity of the traditional Mediterranean diet. Research has linked it to the prevention of cancers, obesity and cardiovascular diseases, and an aid to food digestion. Olive oil and olives make up one of the six key groups of foods that are part of the Mediterranean Diet. The other elements are grains, fruits and vegetables, legumes and nuts, dairy products and fish.

The Zatoun brand of olive oil uses its profits to help olive tree farmers and their families in Palestine.

The brand is also hoping to alter public perceptions of Palestine. As its website states, “Zatoun helps to create a context based in ordinary everyday life to view and discuss the situation in Palestine-Israel. No longer is it an abstract geopolitical issue involving power elites and undefined national interest.”

The Zatoun brand is led in Canada by Robert Massoud, winner of the 2004 YMCA Peace Medallion. Zatoun is sold in Canada through peace groups and social justice and faith groups and is “intended as a tool to help promote their work and bring home the message that the struggle of Palestinians is ultimately one of human rights and social justice.”

The olive oil is certified fair trade under the Institute for Marketecology (IMO) (http://www.imo.ch/index.php?seite=imo_index_en) in Switzerland. The brand is operated as a not-for-profit with volunteer labour and the entire cost of the product goes to the farmers, customs and shipping costs, and promotion and administration. Each 750mL bottle sells from between CAD $15 (US $14) and CAD $17.50 (US $17.22) and each bar of soap is CAD $5.00 (US $4.90).

In the U.K., the Zaytoun brand was started by British women Heather Masoud and Cathi Pawson, also in 2004. The Palestinian olive oil has benefited from sales promotion during the United Kingdom’s annual Fair Trade Fortnight: a highly publicized promotion over two weeks that has consistently raised the profile of all Fair Trade products. Palestinian products were profiled during the 2009 event.

The Zaytoun brand is certified with the World Fair Trade Organization (www.wfto.com) and has been able to break through to sales in British supermarkets as a result. Having this certification is key to being accepted for display on the supermarket shelves. By being certified, the farmers are able to get guaranteed above market prices for their olives. This makes it easier to plan and invest in the farm and the community and avoid the wild fluctuations of market prices. It is common around the world for farmers to be bankrupted and impoverished when market prices crash and fall below the cost of growing and harvesting the product.

“We have been working for the Fair Trade certificate for four years,” Nasser Abufarha, chairman of the Palestinian Fair Trade Association told the Guardian newspaper. “Fair Trade will increase our sales, and bring us new markets and widen our reach.

“We have given farmers hope,” he said. “An economic exchange that recognises Palestinian farmers’ rights and respects the value of their connection to their land, after marginalization under Israeli occupation, is a major accomplishment.”

Olives are Palestine’s biggest crop, and critical to the local economy. The industry employs more than 100,000 people and its economic health affects many more. But the ongoing conflict has harmed the olive industry in many ways, from the bulldozing of orchards to make way for the Israeli security fence – over 1,100 hectares olive orchards were cut off by the fence in the West Bank village of Anin alone – to clearing fields for the building of new settlements.

For some of the farms, fair trade has meant access to outside markets they haven’t had for 40 years.

The Palestinian olive oil is in a market with fierce competition. In the UK, the oil can retail for £14.49 (US $23) a litre, while some Italian olive oils can be had for just US $9. But the Palestinian olive oil has a number of advantages in the marketplace: consumers have shown a willingness to pay the premium to support the farmers and Palestine, and most importantly in the competitive world of food sales, food connoisseurs rave about it. Food and wine writer Malcom Gluck called Zaytoun olive oil “one of the aggressive yet pungently attractive olive oils I have tasted”. He believes it easily ranks alongside the best Sicilian, Cretan and northern Spanish oils.

Another Palestinian company having success with the olive products is the Anabtawi Group (http://www.anabtawigroup.com/index.php?a=1&lid=3&lid1=24). Based in Nablus in the West Bank, it started in 2008 the Al-Ard Palestinian Agri-Products Company and sells Al-Ard extra virgin olive oil, virgin olive oil and an olive oil soap. Operating on a large scale, the group has the largest olive oil storage facility in Palestine and provides training and support to the farmers. It also undertakes marketing of the products in new markets including Latin America.

Ziad Anabtawi, the company’s president and CEO, told the Brazil-Arab News Agency “Palestinian olive oil is known worldwide for its high quality and its very striking aroma. It is ‘premium’ and organic by nature. Farmers grow the product the traditional way. They do not irrigate the olive trees, [irrigation] comes from rainwater and we do not use any chemicals.”

The Palestinian experience shows it is possible to create new economic opportunities for farmers under even the most arduous political and security conditions.

By David South, Development Challenges, South-South Solutions

Published: October 2010

Development Challenges, South-South Solutions was launched as an e-newsletter in 2006 by UNDP's South-South Cooperation Unit (now the United Nations Office for South-South Cooperation) based in New York, USA. It led on profiling the rise of the global South as an economic powerhouse and was one of the first regular publications to champion the global South's innovators, entrepreneurs, and pioneers. It tracked the key trends that are now so profoundly reshaping how development is seen and done. This includes the rapid take-up of mobile phones and information technology in the global South (as profiled in the first issue of magazine Southern Innovator), the move to becoming a majority urban world, a growing global innovator culture, and the plethora of solutions being developed in the global South to tackle its problems and improve living conditions and boost human development. The success of the e-newsletter led to the launch of the magazine Southern Innovator.  

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Indian Newspapers Thrive with Economy

The onslaught of digital media in the developed countries of the world regularly brings pronouncements of the death of the traditional newspaper. But this assumption of digital triumph misses out on the reality in countries across the global South.

As incomes rise and literacy levels go up, so does the desire to consume news and information. And while many are jumping straight to online and mobile phone sources, just as many are enjoying more traditional print media offerings like magazines and newspapers.

India boasts both a fast-growing economy and the largest number of paid-for newspapers in the world. The print media industry in India has seen phenomenal growth since 2005, with the number newspaper titles increasing by 40 percent to 2,700 (World Association of Newspapers). The two factors driving this growth in newspapers are rising literacy and a booming economy

The World Association of Newspapers found China leads the world for newspaper subscribers, with 93.5 million readers a day. India is second. It is estimated the Indian newspaper industry will generate US $3.8 billion in revenues in 2010, a 13 percent growth rate over the last five years.

Estimates place growth in the newspaper industry in the next four years at 9 percent a year, to US $5.9 billion (KPMG).

Part of the reason India is defying the decline in newspaper numbers and readership seen in developed countries is poor internet penetration across the country. Because of this, only 7 percent of the population uses the web for information. And the country’s high number of illiterates (just 65 percent of the population can read) means even if many could afford a newspaper, they couldn’t use it.

According to Amar Ambani, head of research at India Infoline Group, “Unlike the West where the internet publishing and advertising has significantly hit the print media, the Internet threat to print media is still in its nascent stage in India, given the low penetration of computers and adequate bandwidth across the country.”

Newspapers are also growing in a highly competitive market exploding with new television channels on cable and satellite and other media distractions like mobile phone applications.

The newspapers (http://www.world-newspapers.com/india.html) are a strong reflection of how much the economy has changed in the past decade. They contain advertisements for property, mobile phones, cars and dating services.

Cost is also a critical element in their success: at only four rupees each (US $0.09 cents), many Indians buy several newspapers at a time for their home. The publications are able to charge so little because of the health of the advertising revenue coming in. Newspaper advertising in India increased by 30 percent between January and Match 2010 alone, the quickest jump in ads for the Asia-Pacific region (Nielsen India).

There is a hierarchy in the newspaper industry: English-language newspapers attract wealthier readers and can charge the most for advertising. But rising literacy rates combined with increasing personal wealth is fuelling growth in regional papers written in local languages. India has 22 official languages and English as an associate language. The country as a whole has about 33 different languages and over 2,000 local dialects. Hindi newspaper circulation rose from 8 million in the early 1990s to over 25 million in 2009.

The Times of India (http://timesofindia.indiatimes.com) is now the world’s largest circulation English-language newspaper, with 4 million readers. It uses this success to charge 10 times what regional papers can for advertising. At present, the regional newspapers’ bread-and-butter is mostly government-paid advertising.

But if trends continue as they are, then the tables will turn on big beasts like the Times of India. Regional papers will grow as people look for an opportunity to read in their own local language.

Flush with cash and confidence, Indian newspapers are also innovating new ways to advertise untried in other countries. Talking ads attached to the actual newspaper’s back pages caused a great stir when they were trialled in India recently (http://www.guardian.co.uk/media/greenslade/2010/sep/28/newspapers-advertising). The talking ads for a car company delivered a sales pitch but also alarmed and annoyed many people because the talking ad wouldn’t stop talking.

Ambani puts the success of the Indian newspaper industry down to five factors: the economic boom in semi-urban and rural India; growing local content; more opportunity to grow the number of readers; rising advertising spending; and rising literacy as a result of rising secondary school enrolment. He believes students aged between 10 and 15 are getting the newspaper habit and they represent huge future growth in newspaper readers.

By David South, Development Challenges, South-South Solutions

Published: October 2010

Development Challenges, South-South Solutions was launched as an e-newsletter in 2006 by UNDP's South-South Cooperation Unit (now the United Nations Office for South-South Cooperation) based in New York, USA. It led on profiling the rise of the global South as an economic powerhouse and was one of the first regular publications to champion the global South's innovators, entrepreneurs, and pioneers. It tracked the key trends that are now so profoundly reshaping how development is seen and done. This includes the rapid take-up of mobile phones and information technology in the global South (as profiled in the first issue of magazine Southern Innovator), the move to becoming a majority urban world, a growing global innovator culture, and the plethora of solutions being developed in the global South to tackle its problems and improve living conditions and boost human development. The success of the e-newsletter led to the launch of the magazine Southern Innovator.  

Follow @SouthSouth1

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