Michael Jordaan on the world of wine

Former banker turned venture capitalist Michael Jordaan has just stepped down from chairing the SA  wine export promotion body Wines of South Africa (WOSA).   The Cape Messenger caught up with him to find out why.

CM.  Why are you leaving WOSA? Did you resign, or were you pushed?

MJ.  I resigned after 3 years as WOSA chairman as the 21 startups in which I am now invested are growing up fast and need more of my time. In addition the two main strategic goals we have set for SA wine exports are gaining traction. The one is to move from volume to value, the other is to reduce the historic over-dependence on Europe as a wine export destination and grow – specifically – in the USA and China.

CM.  You refer to moving SA wine exports from volume to value.  What do mean by this?

MJ. In the past our wine export marketing was about increasing the amount of litres exported. This had the unfortunate side-effect of putting SA wine in lower price categories. We produce excellent quality wine, so the growth efforts are now about lifting the price of SA wine to the levels enjoyed by our New World competitors  – such as Australia, New Zealand and Chile.

CM. Wine is fun to drink, but is the wine industry an important industry?

MJ. The industry produces R36 billion of SA’s GDP (or 1,2%) and employs 300 000 people. Wine tourism grew 22% last year and it is a great way to introduce foreigners to our beautiful country, friendly people and great wines.

CM. In which export markets are we doing well?

MJ.  The focus on the USA and China are paying off very well and we averaged double digit value growth in the last 3 years.

CM. Do our wines meet global standards?

MJ. Undoubtedly. We are doing better and better in international wine tastings. It is time to become far more confident about what we can create in the Cape.

CM. Government has teetotal ministers making policy affecting the wine industry. Do you wish they were more supportive?

MJ. Yes. All our competitors have far larger marketing budgets to promote wine exports.

CM. Are you defensive about transformation in the industry, or is this issue now being actively addressed?

MJ. There are more and more great examples where previously disadvantaged individuals have excelled in the industry, including some very successful black-owned brands. The volume of ethically accredited wine volumes is now over 50%. Land transformation remains slow at 2%.

CM. WOSA is a big wine industry organisation. Does it provide a voice for the industry, and if not where should this come from?

MJ. WOSA is tasked with export promotion while other organisations such as VINPRO and SAWIS are more active domestically. I have been impressed by the manner in which the industry is increasingly co-operating and supporting each other in export markets.

CM. We have asked you this before, but how important to the wine industry is tourism in the wine-lands?

MJ. Tourism is one area where our country can still grow rapidly. We have such amazing natural beauty, warm people and we are certainly not expensive. Fortunately wine tourism, which is a high-value tourism segment globally, is growing fast and has many spinoffs for other industry segments such as accommodation and restaurants.

CM. And then there is the water challenge. Does the current crisis, and a prospect of permanent water shortages, scare you?

MJ. Yes. We have taken water for granted for too long. I am particularly irritated by alien vegetation which consumes so much runoff. We also have to irrigate more smartly (such as at night) and less (lower yields are usually associated with higher quality anyway).

CM.  You still travel a lot. Do you still smile when you return to Stellenbosch?

MJ.  Of course, we live in a beautiful part of the world and are lucky to be surrounded by people who want to contribute to make Stellenbosch and the country better.

CM. Are you a cork man or a screw-top man?

MJ. I love all new things in tech, but when it comes to wine I am a bit of a traditionalist, so cork it is.

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