- Meet Gerrit van Zyl of Botha Kelders, a 74-year-old producer cellar in the Breedekloof producing up to 36 million litres of wine annually.
- Bulk wine is not responsible for South Africa's cheap wine image abroad.
- The virtues of South Africa's producer cellars and wine.
Driving through the 3.9km Huguenot Tunnel, connecting Paarl and Worcester, has always felt like international travel to me.
The guide
The weather on the other side of the tunnel is almost always different to where you came from. Through the looking glass. Last week I was fortunate to be taken on a guided tour of two of the top producer cellars in the Breedekloof Valley by Jaco Potgieter, a buyer and winemaker for DGB, one of South Africa's largest independent wine and spirit producers and distributors.
DGB is a big customer of both these cellars, and Jaco, with his long-term relationships with the people, the perfect guide.
Bulk wine
Did you know that premium South African wine only makes up 3% of South African wine? The remaining 97% is bulk wine. By that premise, it seemed necessary for us to understand bulk wine. Its role in the South African wine industry. Why it had historically been lambasted for lowering the price of South African wine internationally. The people behind the wine. And the wine behind the wine.
Jaco obliged and drove me to the first cellar, Botha Kelder, where we met with managing director Gerrit van Zyl. Gerrit was so thorough in his tour, and I, incapable of shutting up, meant that we had very little time at Slanghoek Cellars, and I'll have to go back there sometime soon - though Gerrit provided more than enough fodder for this article.
Botha Kelders
Botha Kelders comprises 36 member producers/ farms, a private company, with the members serving as board directors. They represent about 1900 ha under vine in the Breedekloof from family-owned, multi-generational farms, producing anything from 33 to 36 million litres of wine annually.
You should see the tanks, marked in hectolitres. I went full-Zuma trying to decode how much 3500.00 HL is.
Gerrit eventually said that in an 850 HL tank, 85 000L of wine, if you drink one 750ml bottle per night, you will have a bottle of wine every night for over 300 years, which gives you just a little bit of perspective about the true scope of the place-literally producing years of wine. And they have to because they make very little money per litre.
Depending on the cultivar, they'll get anything from R10 to R12 per litre for Cabernet and Chenin, currently a gentlemanly R6.50. Just think, the R120 bottle of wine you drink at the restaurant that comes from a producer cellar (think Distell, DGB, and KWV brands), if you tip the waiter 10%, you're basically giving them double the price of the wine. When you detract the R1.65 cellar costs, the end producer gets R4.85 on the litre (for Chenin).
Bulk wine is a numbers game, and it comes down to rands and literally cents.
South Africa in context
Simon Farr, one of the founders of the UK's Majestic, the previous owner of Bibendum, now part-owner of what he calls the Malgas Monopole of Sijnn and fine wine marketplace Cru, helped clarify the global wine economic situation for me, and South Africa's place in it. And it's small.
Like Gerrit and Jaco told me, if the Spanish yield fluctuates by 5%, that's South Africa's entire production right there.
We're virtually nothing in terms of production worldwide, and yet there is an awareness of South African wine. Small but mighty.
According to Simon, this awareness started in 1994, fuelled by the abolition of apartheid and the opening of our export markets, but also with this initiative called GEIS, the General Export Incentive Scheme. This initiative offered exporters a 15% rebate from the government, meaning co-ops offered 15% off their price.
Making SA wine seem incredibly cheap then, but also created an enormous awareness that South Africa existed as a wine-producing country. Thus, a double-edged sword, and where this concept of SA wine as cheap wine began internationally. So not bulk wine's fault...
Slowly the government retracted this 15% rebate and, with it, almost any form of support.
In Europe, agriculture is state-subsidised, which means the state indirectly subsidises most co-op (producer cellar) producers. Therefore their prices do not reflect the actual production costs, presenting as artificially low, a built-in competitive advantage.
South African bulk wine, in contrast, with little to no governmental support, looks expensive next to these wines reflecting their actual production costs, and who ends up paying the difference to remain competitive? The producers, someone, eventually has to pay.
So when Gerrit took me to see their latest expansion, I was confused. Why were they expanding, given all the negative information he'd given me? Answer: They must keep up and produce more wine to compensate for the dwindling profits.
Two separate businesses
The other important point that both David Trafford of De Trafford wines (and Sijnn) and Simon kept hitting back on was that the bulk and premium wine industries are two separate businesses that happen to share fermented grape juice as a common denominator.
I kept trying to tie them together, to imply that one influenced the other, but Simon made me understand. Bulk wine is a commodity. Premium artisanal wine is a luxury item.
One needs millions of consumers, and the other only needs a few ardent collectors. You don't drink an R300 bottle of wine every night. That's the beauty of wine. You get to pick and choose and explore depending on your mood and budget on the night.
I think its quite remarkable that producer cellars like Botha Kelders, who have been in business since 1949, 74 years, have remained always poised on a knife's edge navigating market forces, nature, and socio-economic factors, but somehow have managed to survive and grow, representing 36 family farms with some up to 7 or 8 generations.
This is true wealth, not a flash-in-the-pan, get-rich-over-night-scheme that our society craves. Nothing easy about it, and it's not quantifiable in monetary terms.
Gerrit has helped test and design a computer programme with a developer that keeps track of every ml of juice and gram of must that goes in and out of the cellar. Tailored to their every need, it demonstrates the years of experience that helped them teether on this precipice for 74 years. They're not making money, but they've managed to support a community for generations. How valuable is that?
How?
As we drive, I ask Oom Jaco, "How?". The statistics and the figures seem absolutely implausible. Read this article from the Wine Economist if you don't believe me.
How do they survive?
"Hulle is taai." / "They're tough."
And when I ask Gerrit why he stays, he says: "Dis die lekkerste industrie, die wyn industrie." / "It's the lekkerste (no translation) industry, the wine industry."
When I ask Simon Farr why he invested in a South African wine farm (Sijnn), he says: "I like long-term things." Not to say that Sijnn, a premium wine producer that only got one barrel out of their 2021 Cabernet Sauvignon harvest, is the same as Botha Kelders' million litres. I'm just saying it's perhaps the same ethos, the will to create something for future generations, and the challenge of hanging on by your fingernails to make it so.
Wine prices are going up on 1 March, with some premium wines up to 45%. These price hikes account for everything from load shedding, glass shortages, and the hangover from our Covid alcohol restrictions (they haven't recovered).
When I ask Simon if this is unique to South Africa, he responds emphatically: "Join the club."
Europe is dealing with war, and one of the most prominent French glass producers serendipitously moved their factories to Ukraine before the Russians invaded. They have lower yields and their own energy struggles. We are not alone, and even with our price hikes, specifically in the premium wine sector, we will still be cheaper than some of the fine wines of Europe.
Though I can't help but wonder what happens to the South African wine-drinking market.
Simon says we have a massive influx of international wine drinkers in South Africa through our thriving tourism sector, further distracting from our actual wine-buying power. But it all boils down to this: making and selling wine has never been an overnight phenomenon. It is definitely not a get-rich scheme.
In fact, in premium wine, every profit you make on the wine needs to be pushed back into the farm to perpetuate the success in the next vintage. And whether you're drinking your R300 bottle of wine tonight or your R50 bottle (end of the month), you can be assured that there's a group of people hellbent on staying alive behind it.
Making a living off of pure wine money today seems impossible. Still, they do, and they (premium and bulk) represent a valuable facet of South African culture and something worth protecting.
If I accomplished nothing other than making you consider trying these producer cellars' wines or helping you understand the incoming price hike. I'm happy. Next up, box wine.
You can visit Botha Kelders' delightful tasting room or shop the wine here.
And Slanghoek here.
