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How South Africa Built a Booming Wine Business In a very short time period, South Africa has become a credible player in the worldwide wine marketplace.

By Tracy Byrnes

Opinions expressed by Entrepreneur contributors are their own.


Nelson Mandela, the South African anti-apartheid revolutionary, politician, and philanthropist said, "After climbing a great hill, one only finds that there are many more hills to climb."

The South African economy has climbed many hills. Even today, with mining as the main economic driver, the Rand is very weak.

So maybe it's high time the country look toward the lower west coast and embrace its flourishing wine industry.

"Do not judge me by my successes, judge me by how many times I fell down and got back up again." – Nelson Mandela

South Africa, a country on the southernmost tip of Africa, has been making wine for more than 350 years.

It basically started when the Commander of the Dutch Colony at the Cape of Good Hope planted his first vines in 1685, says Alyssa Rapp and her research team at Bottlenotes.

Around this time the Huguenots, French Protestants who were persecuted in France for their religious beliefs, showed up. Well, the Dutch presumed, that since they were French, they knew how to make wine (much like people presume that since I'm Sicilian I can make a good meatball.)

So they threw them in the vineyards, and while they did impose their Bordeaux beliefs, they land was blessed with fertile soil, sloping hills, and ocean breezes, so they started to produce some great wine regardless of their past skills.

Eurpoean high society, including British writers such as Charles Dickens and Jane Austen, took notice, says Rapp.

Even Napoleon, while in exile at St. Helena, requested the Constantia, a sweet red dessert wine, named after the area where it was from.

But outside of Constantia, the vineyards were hit with diseases, they weren't clean and most of the wine ended up in brandy.

The wine industry fell apart and it wasn't until the end of Apartheid, when Nelson Mandela become president, that things changed for everyone.

It was then, in 1994, that the modern South African wine industry officially was reborn.

Related: The Top Wine Trends Expected in 2016

But it wasn't easy. Many of the older vines had to be ripped up and replanted. And they continued to fight much ignorance.

Are there lions in the vineyards?

Can I get ebola from South African wine?

"No and no," says Jim Clarke, marketing manager for the Wines of South Africa, USA.

It wasn't really until the 2010 Soccer World Cup that the world's perception of South Africa finally changed -- for the good.

"When people are determined they can overcome anything." -- Nelson Mandela

The vines are now 15 to 20 years old. They have the largest Chenin Blanc (a white wine grape from the Loire Valley that is halfway between a Sauvignon Blanc and a Chardonnay) plantings in the world.

Which is why 55 percent of the wine they produce is white and about 45 percent is red.

And there is production integrity now. They have sustainable wine-growing practices and the wines have seals as proof.

With that, the money is coming.

The native professional golfers started it. David Frost, who won 11 times on the PGA Tour and grew up in the wine business, produced his first vintage in 1997. Ernie Els produced his in 2000.

Then Charles Banks, entrepreneur, wine collector and founder of Terroir Capital took a trip to South Africa with his wife, tasted some of the oldest Chenin Blanc on the continent and fell in love.

In 2011, he bought two South Africa wineries: Mulderbosch Vineyards in Stellenbosch and Fable Mountain Vineyard in Tulbagh. He is also a part of Marvelous Wines, a collaboration with a local winemaker and chef.

And it wasn't just American entrepreneurs that saw potential.

Lawrence Graff, the British diamond magnate, is now there making his Delaire Graff wines, says Clarke. And the Indian entrepreneur Analjit Singh ("He is essentially the Indian Charles Banks," says Clarke) saw opportunity and partnered with Mullineux Family Wines.

In 2014, Kendall Jackson, the California-based company, invested in property with a mission to create high-end wines.

"Education is the most powerful weapon which you can use to change the world." – Nelson Mandela

When guys like Charles Banks drop gobs of money somewhere, people take notice. But more needs to be done.

Native Ken Forrester, known for his fabulous Chenin Blancs (My tip: Try the FMC), is one of the most powerful voices of the South African wine industry. He travels the world and his wines are getting the accolades they deserve.

Related: Drink More Wine. It's a Resolution You Can Keep.

Unfortunately many of the local South African winemakers are not doing that yet – but need to.

The marketing needs a lot of improvement for the industry. Banks, a brilliant businessman, created a label on his Mulderbosch wines that is basically a stripe down the bottle. It just jumps out at you on the shelf. Genius.

"This is another area where the South Africans still fall short," says Clarke. "They need to learn to market their wines to the U.S."

And they still need better distribution and more focus from retailers and restaurants, says Banks.

But it's all coming. Sommeliers are more open to including these wines on their lists.

"I have been discovering lots of gems as of late," says AJ Ojeda-Pons, wine director for the Zakarian Hospitality Group, with restaurants that include The Lambs Club in Manhattan and The National in Greenwich.

"It always seems impossible until it's done."– Nelson Mandela

Sales are rising again. Wine lovers are realizing that they indeed are producing great wines at even greater values. (We mentioned this in our recent wine trends column.)

That $15 to $20 bottle of wine is the sweet spot for South Africa and so many consumers.

And while Chenin Blanc, the versatile zesty white wine that pairs really well with food, has been their bread and butter, red blends are rising about 13 percent per year, says Clarke. "And I would put a South African Cabernet up against a Californian cab any day," he says.

"We can make world-class wine for a very fair price," says Banks.

So much is yet to be discovered but with capital and expertise coming to the region, the opportunity is there to boost the nation's economy and create jobs.

The entrepreneurs see it. Wine lovers see it.

I think Mandela would be proud.

Related: How Entrepreneur Robert Mondavi Changed Wine Forever

Tracy Byrnes

Principal, Wine on the Street

Tracy Byrnes has what many might call a dream gig, matching a career as an experienced and well-respected business journalist with her passion for wine. She began a wine column, Wine With Me, for FOX News Channel in 2010 and later started Wine on the Street as a way to educate professionals about wine and provide an open forum for content around the wine business. Prior to founding Wine on the Street, Tracy was an anchor and reporter for the FOX Business Network, a writer for and an accountant with Ernst & Young. She is also the author of Break Down Your Money: How to Get Beyond the Noise to Profit in the Markets. 

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