While diplomatic efforts are underway to negotiate the significant tariffs imposed on South African exports by the US earlier this month, the wine sector is looking at alternative revenue streams, such as wine tourism, not just to boost revenue but to strengthen brand loyalty.
South Africa Wine says it is “deeply concerned about the imposition of a 30% tariff on South African agricultural exports to the US. This decision places our industry at a severe disadvantage compared to countries that continue to benefit from lower tariff rates”.
Wanda Augustyn, Spokesperson for South Africa Wine, said: “We are actively engaging with the South African government and relevant stakeholders to support urgent diplomatic efforts to secure more favourable trade conditions. The US remains a key market for South African wine and maintaining access under fair terms is vital for the sustainability of our sector and broader agricultural value chain.”
South Africa’s wine exports to the US currently total around R600 million per year.
Carolyn Martin, Co-Founder of Creation Wines in Hermanus, said the tariffs place South African producers “at a distinct disadvantage compared to competitors like Chile and Argentina” that face a 10% tariff.
Need for diversification
“While this will be difficult for export-driven labels, it highlights the critical need to diversify revenue streams. At Creation, we’ve always viewed tourism as vital – not just for revenue but for deepening our brand's emotional and cultural relevance,” said Martin.
The vineyard offers a multisensory approach, offering guests vineyard tours, art exhibitions, walks and food and wine pairings, catering to a mix of local and international visitors.
“We invest heavily in hospitality because it fosters loyalty and strengthens direct-to-consumer sales, which provide three to four times higher margins than export channels while bypassing tariff-affected routes entirely,” she said.
US visitors to Creation have increased by 253% over the past year, likely due to improved air access, which is why it is important that South Africa and the US retain cordial relations, Martin added.
Untapped potential
“South Africa’s wine industry is in an outstanding position to reach new heights by making wine tourism its superstar attraction,” said Daneel Rossouw, Head of Sales for Agriculture at Nedbank Commercial Banking.
“What South African wine tourism has to offer is nothing short of remarkable. With 522 wine cellars stretched across 23 wine routes in the Western Cape, Northern Cape and KwaZulu-Natal, the country offers a rich and easily accessible wine experience,” he said.
Wine tourism is already doing some heavy economic lifting in a sector that is facing increasing costs, smaller margins and changing wine drinking behaviours.
Research by South Africa Wine reveals that wine tourism contributed R9.3 billion (US$528 million) to the economy in 2022. It also shows that wine tourism is responsible for an average of 17.3% of total winery turnover. This increases to 36% of total turnover for micro wineries (with a turnover of less than R10 million) and 35% for small wineries.
A 2019 survey by Vinpro, among 113 wine farms, shows that day visitors to wine farms are 35% local, 29% domestic and 36% foreign. The US is one of the leading international source markets, accounting for 14% of wine farm day visits.
