The Wine Industry South Africa - 1307 Words

The Dutch introduces the wine industry to South Africa in 1652 (Three Centuries of Cape Wine, n.d.). After centuries of evolution, the South African’s have found the wine industry to be very profitable. In Fact, South Africa is the 7th largest wine producer in the world (Giokos, 2016). This industry is so sturdy that during the recent recession while many South African’s have found themselves out of a job, the wine industry is touting that its exports have increased 5% in 2015 and were projecting even further growth in 2016 (Giokos, 2016). We will examine various aspects of the wine industry and conclude with an entry strategy into the market along with a potential business structure. Mike Veseth (2016) described the distribution of profits and loses of the South African wine industry with only 15% of the producers making strong profits. He broke out the rest of the market as follows: 49% making low and unsustainable profits, 6% breaking even which leaves 30% of th e companies losing money. Later he stated that even in the high cost areas of South Africa, wine is sold at a fairly low price compared to other nations in the world. The fact is that South African’s prefer to drink one of wines top competitors, beer, so the demand on wine in South Africa is relatively low. All of this shows that less than half of the South African industry it truly thriving in this market and leads to the fact that the money is in exporting the wine out of South Africa for the maximumShow MoreRelatedKwv Wines Shareholers Report Marina Ulkar Jimmy Essay examples956 Words   |  4 PagesKWV WINES SHAREHOLDER’S REPORT BY: MARINA YUROVA ULKAR NAJAFOVA JIMMY HUMANIA COMPANY’S DESCRIPTION KWV is one of the most famous and leading â€Å"wine and spirits† producing company in South Africa. 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