What next for Kumala?

While many South African winemakers would find this statement hard to swallow, it really does seem that Kumala is the lifeblood of South African wine.

It is rare that one brand could have such an impact on an entire country's wine production and sales figures - but a significant fall in sales of Kumala has coincided with a 10 per cent in the total South African wine market.

What is remarkable is that in any other country, another brand would pick up the slack. But it appears that brands are hard to cultivate in the very diverse growing conditions of the Western Cape.

As Charles Back from Fairview puts it: "One of the problems South Africa faces [in terms of big business] is that as a big New World wine producing country, you are supposed to be able to produce row upon row of homogeneous land which can produce chardonnay or another popular grape.

"In South Africa you cannot do that - it is very difficult because the land is so different, even within individual vineyards."

Now there have been other brands appearing on the horizon, not least First Cape (owned by Brand Phoenix) which has leapt into the number two position in the list of South African wines in the UK. However, First Cape is a totally off-trade focused product. The only brand to challenge Kumala in the on-trade is on-trade exclusive Cape Promise.

But neither of them have the spread of popularity across the two trades that Kumala had.

The ownership problem

So what has happened to Kumala? Undoubtedly the biggest problem the brand has had to face has been a change of ownership. The brand was built up for years by Western Wines, a UK-based company. Its purchase in 2004 by Canadian company Vincor did not seem to affect things. However, last year's purchase of Vincor by brands giant Constellation has significantly changed affairs.

And according to James Reid at Constellation Europe, it has taken a bit of time for the new owners to get to grips with the brand.

"I believe we only began to get our heads around the brand seven or eight months ago," he says. "Undoubtedly Constellation has had to spend some time getting to understand the brand and the South African category, but now what we want to do is get back in the driving seat and lead the category."

Constellation argued at the time of the deal that Kumala had reached the peak of its potential penetration under the ownership of Western Wines and that the move to Constellation would give it a new lease of life. Suffering category?

However, several commentators have directly blamed the transition period for Kumala's poor performance, with this directly leading to a drop in the overall performance of South African wine. This is a fact that James says is unfortunate, but quite probably true.

However, he also says that Constellation are not just focused on Kumala but on the South African wine category as a whole.

"There has been a significant fall in sales but that is undoubtedly as a result of the transition - the fact that our fall in sales estimated at 500,000 cases over the last year - has led to an overall fall in South African wine sales shows how important Kumala is to the whole category," says James. "And I think in six to seven months time you will se a recovery and we are working really hard towards that. In many ways I am more competitive towards other brands in the Constellation stable than I am to my South African rivals. I want to see other South African wine brands succeeding."

Kumala's future

Constellation has big plans for Kumala in 2007. Under the tagline 'Let the adventure begin', the company is spending £5m on a new marketing campaign, with advertising being seen on the sides of taxis, in the press and as part of a sponsorship on radio station Heart FM in the UK.

"We will be providing leadership for the whole South African wine category - we have a unique opportunity to do so with the Kumala brand," says James.

"South Africa sits at the front of Constellation Europe's plans, which is really encouraging for us."