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How To Start Wine Business In South Africa

Last updated on April 28, 2022

How To Start Wine Business In South Africa

Learn How To Start Wine Business In South Africa ; The wine industry is capital intensive but with the right skills set and educational background, it can be as easy as any other industry.

Today, South Africa is the ninth-largest wine producing market globally. The country’s agricultural area in terms of grape cultivation is around 93,021 hectares (930km2), with an even balance or red (44.8%) and white varieties (55.2%) grown across these vineyards.

South Africa produces around 3.4% of the world’s wine and has seen an enormous growth in the last decade, with exports of wine more than doubling between 2005 and 2015.
Although the quantity of wine produced in the last 4 years has remained relatively stable, the quality of = wine deriving from this country has significantly improved, reinforcing the local economy and providing hundreds of thousands of jobs.

What is a wine company?

A winery is a building or property that produces wine, or a business involved in the production of wine, such as a wine company.

How To Start Wine Business In South Africa

  • Come up with a name and choose a business entity. Before you get in too deep with creating your wine business or winery, you need a name and a business entity in mind.
  • Write a business plan.
  • Navigate licensing, permits and taxes.
  • Create a budget.
  • Get funding for your wine business

Wine business startup costs to consider

In your first year alone, you’ll need to invest some serious capital into your wine business. In this industry, in particular, investing in expensive fixed assets — think land, machinery and equipment—is non-negotiable.

While your expenses will be ongoing, the vast majority of your investment will go toward establishing your vineyard’s infrastructure and operations during your first two years of business. Jerry White of Cornell University lists the following as expenses to consider within your first two years of starting a wine business alone:

  • Land.
  • Equipment, including refrigeration, cellar equipment, winery buildings, trucks and receiving equipment.
  • Vines.
  • Fermentation and storage.
  • Cooperage.
  • Bottling line.
  • Office.
  • Tasting room.

Other startup costs to consider include payroll for your staff, shipping, marketing and business insurance. In all, White estimates that your first five years require a capital investment of over $1.5 million.

Frequently Asked Questions (FAQs) On How To Start Wine Business In South Africa

How much does it cost to start a wine farm in South Africa?

Stellenbosch farms sell for about R800 000 to R1 million per hectare, and for about R400,000 to R600,000 per hectare in the Paarl Valley. Historic farms tend to attract a lot of attention especially those with well-preserved Cape Dutch heritage architecture, Seeff said

How much does it cost to make your own wine in South Africa?

R400 per person for wine blending only; R700 per person including picnic lunch; R845 per person including three-course lunch; R1 250 per person including lunch with their winemaker.

Where can I make my own wine in South Africa?

Come and visit Stellenrust Wine Estate, where you will have the unique opportunity to make your own wine! You will pick your own grapes, stomp them and brew your very own award winning wine. The day usually starts out with a refreshing glass of sparkling wine and a chance to meet the owners of the estate.

Do wine farms make money?

Industry survey shows 28% of wine grape producers made a profit in 2019, up from 15% in 2015. Profitability is slowly returning to the wine industry after years of decline.

Is wine business profitable in South Africa?

The wine industry has built and continuously maintains a strong brand reputation for South Africa on the global stage where we export to 132 countries. The wine sector annually contributes R55 billion to GDP and provides employment to more than 265 000 people.

How much does it cost to create your own wine?

Making wine at home is not very costly. For your first batch of wine (5 or 6 gallons), supplies and equipment will cost between $100 and $200. Afterwards, a batch of each bottle will cost between $2 and $7. Grapes and / or other fruits can be grown for about a dollar per bottle if you are growing them yourself.

Can you make wine without a vineyard?

You can’t make wine without a facility. Because of that, you must decide where exactly the winemaking process will take place. Some common facilities that wine labels regularly utilize are garages, new wineries, or custom crush facilities (oftentimes called “cooperatives”)

Is selling wine a good business?

Is The Wine Industry Profitable? In general, the wine industry as a whole is very profitable, as the wine industry growth rate suggests. For restaurants and bars, wine is easily the most profitable item on the menu. And wine, in large part, drives a lot of the profitability of bars.

Are small wineries profitable?

Although vineyards are associated with a relatively high investment (compared to annual crops), they can be very profitable. Winegrape growers have two options: selling grapes to cellars and brokers, or making their wine and selling it.

How do I invest in a winery?

You can start investing in wine by purchasing individual bottles from sites like Winebid.com and Wine.com or using a platform like Vinovest to purchase a portfolio of wines managed by someone else. You can also invest in wine stocks to access the industry rather than buy individual bottles of wine

What do I add to wine before bottling?

I always recommend that sulfite be added before bottling, as well. This is the dose that keeps the wine fresh and free of oxidation while in the wine bottle. Before fermentation and before bottling are the two times I would never forgo. I also suggest adding sulfites to wine after the fermentation has completed.

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