South African Wine industry eyes lucrative Nigerian market

From Europe to America, South African wines are enjoyed and its vines appreciated. The South African wine market ranks eighth in the world in output and wine producers are looking to Africa for an increase in demand.

Wine producers are pinning their hopes for an increase in demand from Nigeria at the Cape Wine 2012/Photo/Reuters

With an economic crisis hitting its traditional markets in Europe, the South African wine sector is looking to Africa and in particularly powerhouse Nigeria for an increase for its vines.

Wines of South Africa (Wosa), which is tasked to market the country's wines is looking enviously at a slice of the Nigerian market.

The body recently hosted a seminar in Cape Town on wine marketing opportunities in Nigeria.

The associate vice president of global research company Aranca, Sapta Bhattacharyya, told the seminar that the volume of wine exported to Nigeria between 2007 and 2011 had shown a compound annual growth rate of 24.12 percent.

It is estimated that the value of Nigeria's wine market is worth around US$300 million a year and is expected to reach $370m by 2015.

"South African wine exports to Nigeria grew by 12 percent for the 12 months to March," Bhattacharyya said.

Wosa CEO Su Birch said "with a projected annual GDP growth of 11,8 percent until 2016, Nigeria would be the world's fourth most populous nation by 2050, and cannot be ignored by South African wine producers".

According to Birch, most wine consumed in Nigeria is red, which accounts for 73.6 percent of volumes sold. Wosa is now hard at work to market South African wines in Nigeria and potential wine markets were being identified and developed with top-line hotels and restaurants.

Wosa said import distributors account for around 70 percent of distribution, with the balance imported directly by retailers and the hospitality sector. It plans to concentrate its marketing strategy mainly on the Christian south.

While total volumes of all wines sold in Nigeria are expected to grow by 6 percent a year but just 2 percent by value, the potential for growth is high.

Wine producers and marketers are also pinning their hopes for an increase in demand from Nigeria at the Cape Wine 2012, a 3-day trade exhibition taking place in September.

It is also hoped that the recent health visa spat between South Africa and Nigeria is water under the bridge and Wosa is focusing its attention on luring Nigerian connoisseurs away from Spanish and Chilean wines.