Regional groupings, competitiveness and the potential for clusters in the wine industry

Abstract

Before 1994 the South African wine industry was largely isolated from the global market. Access to markets after 1994 meant that South Africa had to adapt its product quality, style and operating procedures to compete internationally. In recent years, labour unrest and trade regulations have hampered both the reputation and the ability of South African wine producers to penetrate the export market. Using the theoretical framework of cluster theory and generic marketing this inquiry investigates whether regional groupings and clusters could result in the South African wine industry becoming more competitive. This inquiry examines the role of regional identity, generic marketing, research and development, policy, and leadership in driving competitiveness in the wine industry and whether the potential for clusters exists through wine routes in South Africa. The study employs an exploratory research model which utilised semi structured interviews. The findings suggest that the research and development component of South Africa’s wine industry lags behind other New World wine producing nations, and that none of the three tiers of government are in the process of creating conditions which would be conducive for the formation of clusters. The results also indicate that wine routes have a positive effect on regional identity, and that generic marketing complements the activities of boutique wine farmers.