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African Countries Re-branding for New Economic Role

By David SouthDevelopment Challenges, South-South Solutions

SOUTH-SOUTH CASE STUDY

Africa’s diverse countries have been subject to years of negative stories in the media. The effect on global audiences has left many to cast the whole continent in a bad light and to know little about the individual countries and cultures.

This has damaged business confidence over the years. Just like products and people, nations need to have a strong and positive brand to do well in the global economy. Nation branding, the process by which countries alter people’s perceptions, has taken hold in Africa as the continent seeks to reverse the bad vibes.

South Africa is the continent’s leader in nation-branding, and countries including Nigeria, Kenya and Ghana are newly pursuing it. South Africa’s ‘Proudly South African’ (http://www.proudlysa.co.za/) campaign is known around the world.

The past decade has seen economic growth and rising tourism in many African countries. But the reality that many people around the world can’t tell the difference between most African countries, or have mostly negative impressions formed from news reports, means they are unaware of the positive developments and opportunities.

Author and researcher Simon Anholt, in his book Brand New Justice, claims Africa’s biggest obstacle to growth is the image of the continent itself. He argues that in a globalized world it is the responsibility of good governments to understand, measure, and exercise control over a country’s reputation if it is to prosper. However, he has criticized nation-branding if it is just a marketing strategy without substantial changes to how things are done in a country.

And it is clear the winners in nation re-branding will be the countries that prove on the ground that they are changing and living up to the fine words and catchy phrases.

In Nigeria’s Lagos State (www.lagosstate.gov.ng), Governor Babtunde Fashola – known as ‘Nigeria’s Obama’ – has launched a campaign to turn around the country’s long-standing reputation for corruption. Using the slogan Good People, Great Country, the city of Lagos has set itself ambitious goals that are dependent on significant increases in investment.

Lagos wants the city to be transformed into a place anyone can do business and be attractive to tourists.

The city has seen its population triple in the last 50 years and is on track to be the third largest city in the world by 2015. Thinking long term, plans are in place for the city to eventually be home to 40 million people.

Critics are blunt about their hostility to the re-branding exercise: “How do you re-brand a product when the content stinks?” asked Akinola M.A. on news website Mynaija News. “I can’t understand the meaning of this project when basic facilities like good roads, water and electricity are virtually not available.”

Supporters say the governor’s strategy is based on action, not words. Investment is going into a Rapid Bus Transit (BRT) system, traffic management, security, street lighting, beautification, and public-private partnerships to improve services.

“Nigeria cannot wait until it solves all her problems before it can stand to give serious thought to re-branding its battered image,” Nigeria’s information minister Dora Akunyili told Online Nigeria. “This is because our development is tied to our image. This negative perception has had destructive effects on our people and stymied our growth and national progress.”

Showing the power of trans-African approaches, the Wisdom Keys Group, a Nigerian company founded in South Africa (http://www.wkg.co.za/network.html) and working in 16 countries with partners, was contracted to do the campaign.

As the pioneer of brand power in Africa, South Africa’s International Marketing Council (http://www.imc.org.za/) heads a relentless campaign to engage an international audience and expatriate South Africans. It is a sharp, multi-media outfit tackling every aspect of South Africa’s domestic and international reputation. Products include e-newsletters, campaigns to lure back expert South Africans, a vast network of web content, and a highly targeted advertising and marketing campaign that lures businesses and tourists to the airport (via ads on taxis and in subways) and on to flights to South Africa.

For Kenya (http://www.brandkenya.go.ke/), the focus is on instilling pride within the country. As Kenyan media consultant Kwendo Opanga told the Nation Branding website, “it is not branding Kenya for foreigners that is difficult. It is branding Kenyans for Kenya and Kenya for Kenyans that is a tough call.”

“We even work with the school system to ensure that this is in the curriculum so that children are told that they need to start living dignified lives.”

Rwanda, despite experiencing a horrific genocide in 1994, is gaining attention for turning its image around. It has taken a different approach and has targeted building powerful networks of support around the world to make deals. As Rwandan government adviser Elaine Ubalijoro told FastComany, “How do you take a country that’s been through hell and bring it to security and prosperity? This is about healing, and this is about hope. We think it can be done.”

The Rwandan strategy is hinged on exploiting a global network of high-profile and powerful contacts that includes former British Prime Minister Tony Blair, Starbucks CEO Howard Schultz and Google chief Eric Schmidt. The results include a training programme where British civil servants work in Rwanda. Starbucks, meanwhile, has become one of the top purchasers of Rwandan coffee.

Ghana’s newly launched Brand Ghana office was set up to coordinate the development of an engaging national image for the country. Its head, Mathias Akotia, told Nation Branding: “We are in competition with other nations for attention, wealth, tourism and for the export of products. Country branding is about the management of our national identity and values in a way that will take us forward.”

Still in the early stages of re-branding, Ghana plans to hold a national summit to draft a plan and identify the country’s values and identity.

Branding is not merely slogans and catch phrases. Word-of-mouth can radically change a country’s image, and its prospects. The international magazine Monocle (www.monocle.com), a publication that prides itself on spotting the next big thing, has highlighted the East African nation of Burundi (http://en.wikipedia.org/wiki/Burundi) as the place to watch. The magazine thinks that by reinventing itself as a place of tourism, coffee and oil, with some of Africa’s best inland beaches and a wealth of art-deco architecture recalling Miami’s South Beach area, Burundi can distance itself from past conflict and become a must-see destination. At present, 80 percent of its earnings come from coffee and tea exports. It is hoping to become a tourist and transport hub with a new port, linking central and east Africa.

As the magazine says, “Bujumbura has got all the substance – and architecture – required to turn Burundi’s backwater capital into an African success story, and the country’s upcoming elections are a chance to create lasting peace after 15 years of civil war. But corruption could still derail the dream.”

The Nation Branding website (http://www.nation-branding.info/) (“everything about nation branding and country brands”) is the place to visit for all those interested in nation branding, country brands and how countries can improve their image abroad. Upcoming nation branding events can be found here: http://www.nationbrandingevents.com/nationbranding.

Published: November 2009

Resources

1) Monocle Magazine: Launched in February 2007, Monocle is a global briefing covering international affairs, business, culture and design. Developed for an international audience hungry for information across a variety of sectors, the magazine is a consistent champion of Southern countries and their economic opportunities. Website: http://www.monocle.com/

2) A BBC radio documentary on Nigeria’s experience of nation branding. Website: http://www.bbc.co.uk/worldservice/documentaries/2009/html

3) Brandchannel: The world’s only online exchange about branding, packed with resources, debates and contacts to help businesses intelligently build their brand. Website: www.brandchannel.com

4) Small businesses looking to develop their brand can find plenty of free advice and resources here. Website: www.brandingstrategyinsider.com

5) Catwalk for Africa: A fashion show taking place from December 4-6, 2009 in Tunisia. Website: http://www.catwalkforafrica.com/accueil/accueil_en.php

https://davidsouthconsulting.org/2022/11/11/african-breakthroughs-to-make-life-better/

https://davidsouthconsulting.org/2022/11/20/african-bus-to-tackle-african-roads/

https://davidsouthconsulting.org/2022/11/19/african-culture-as-big-business/

https://davidsouthconsulting.org/2022/10/20/african-hotel-boom-bringing-in-new-investment-and-creating-jobs/

https://davidsouthconsulting.org/2022/11/17/african-ingenuity-attracting-interest/

https://davidsouthconsulting.org/2022/11/15/african-innovators-celebrated-in-prize/

https://davidsouthconsulting.org/2022/10/21/african-media-changing-to-reach-growing-middle-class/

https://davidsouthconsulting.org/2022/11/02/african-online-supermarket-set-to-boost-trade/

https://davidsouthconsulting.org/2023/01/16/african-theatre-becomes-european-success/

https://davidsouthconsulting.org/2022/10/20/african-tourism-leads-the-world-and-brings-new-opportunities/

https://davidsouthconsulting.org/2022/11/22/happy-nigeria-west-african-nation-has-good-attitude/

https://davidsouthconsulting.org/2022/10/20/online-education-could-boost-african-development/

https://davidsouthconsulting.org/2022/10/18/woman-wants-african-farming-to-be-cool/

Development Challenges, South-South Solutions was launched as an e-newsletter in 2006 by UNDP’s South-South Cooperation Unit (now the United Nations Office for South-South Cooperation) based in New York, USA. It led on profiling the rise of the global South as an economic powerhouse and was one of the first regular publications to champion the global South’s innovators, entrepreneurs, and pioneers. It tracked the key trends that are now so profoundly reshaping how development is seen and done. This includes the rapid take-up of mobile phones and information technology in the global South (as profiled in the first issue of magazine Southern Innovator), the move to becoming a majority urban world, a growing global innovator culture, and the plethora of solutions being developed in the global South to tackle its problems and improve living conditions and boost human development. The success of the e-newsletter led to the launch of the magazine Southern Innovator. 

https://davidsouthconsulting.org/2021/03/05/southern-innovator-issue-2/

Creative Commons License

This work is licensed under a
Creative Commons Attribution-Noncommercial-No Derivative Works 3.0 License.

ORCID iD: https://orcid.org/0000-0001-5311-1052.

© David South Consulting 2022

Categories
Archive Development Challenges, South-South Solutions Newsletters

Grassroots Entrepreneurs Now Have Many Ways to Fund their Enterprises

By David SouthDevelopment Challenges, South-South Solutions

SOUTH-SOUTH CASE STUDY


In the past, African entrepreneurs were extremely limited in the options for funding their plans. They had to rely on often ineffective national banks or local networks based on political, tribal or family connections to secure funding for enterprises. That has now changed, and there is an explosion in new thinking on business start-ups and how best to help grassroots entrepreneurs.

Concepts such as socially responsible investing, social enterprises and fair trade have opened up new frontiers for business development. All focus on the so-called triple bottom line: people, planet, profit. Economist Milton Friedman’s refrain that the only social responsibility of business was to increase profits, is being proven wrong. Some even go as far as to say social enterprise is the model for the 21st century.

“There’s lots of money to be made here,” said James Baderman of What If, an innovation company in the UK that employs 300 people and devotes 10 percent of its profits to helping social enterprises develop and grow. “There are huge opportunities; just look at the double-digit growth in fair trade and organic goods over the past decade. Consumers are increasingly making choices based on the ethical nature of products.”

Many in the social enterprise movement believe breaking the cycle of poverty and economic stagnation requires more than charity; it requires the creation of sustainable businesses that will pay local taxes and employ local people. They have also adopted and adapted the techniques used by multinational companies to improve the desirability of their products. A key part of these new socially responsible businesses is branding and marketing.

In Kenya, the UK’s Traidcraft (www.traidcraft.co.uk) – an organization that fights poverty through a wide range of trade-related activities combining a development charity with a trading company – is working with the Kenya Organic Agriculture Network to develop markets for Kenyan herbs, spices and related products in local and international markets. These include gums, resins (e.g. frankincense), herbs such as coriander, oregano, garlic and lemon grass; spices such as paprika, chillies, rosemary, lemon balm, and essential oils such as pepper tree oil, sinoni oil, and megalocapus oil – all grown in marginalised, arid areas.In another development focused on Kenya – but applicable across Africa – is being led by the UK-based Mark Leonard Trust (http://markleonard.net/). Called the Mainstreaming African Crafts project, it seeks to boost demand for Kenyan craft products in the UK market. It will build demand by focusing on growth areas (such as baskets, jewellery, leather), emphasizing the distinctiveness of African craft products and support product development in line with identified market trends. The aim is to launch a branded Kenyan product range at an international trade fair in 2008.

Along with improving the branding and marketing of social enterprises and fair trade businesses, funding options are becoming more varied. One new source of funding for budding social entrepreneurs is the William James Foundation’s 4th Annual Socially Responsible Business Plan Competition. It awards winners who develop business plans that blend people, planet and profit together with over US $40,000 in cash and expert advice to make sure it is spent well. Past winners have included business ventures as varied as an Afghan company that sends SMS text messages on security alerts, to others making hand-made organic clothing and portable vaccine packs for remote areas.

“We’re at a tipping point wherein the entrepreneur who builds in long-term values of sustainability is the one who will be successful,” said Ian Fisk, executive director of the William James Foundation and a long-time sustainable business activist through Net Impact (http://www.netimpact.org/index.cfm). “Most of what people think of as environmental and social activism in business is simply long-term thinking about energy costs and human resources. There are thousands of good ideas out there. The foundation wants to find those that are attached to solid business plans and help them succeed.”

The success of this approach has also attracted the attention of multinational companies like the oil company Shell. At the Shell Foundation (www.shellfoundation.org), they look at all the enterprises they support from a hardnosed, business perspective. Rather than seeing a producer who needs to produce, they look first at the market and the consumer, and then work backwards to get the producer to make the appropriate products that will sell. “No micro-enterprise is sustainable unless there is a viable route to market,” said Sharna Jarvis, Programme Manager for the Shell Foundation. “The problem with the standard model for micro-finance is that it begins with the producer, not the consumer. It is all about what someone wants to make – there is not enough emphasis on whether anyone will buy it.”

A new internet search engine has also been launched that is seeking a new way to create a steady flow of funds to nonprofit enterprises working to reduce poverty. Called GoodSearch (www.GoodSearch.com), it plows 50 percent of its advertising revenue (about a penny a search) back into nonprofits selected by its users. Powered by the well-known portal Yahoo!, if for example 1,000 supporters just searched twice a day, it would raise US $7,300 a year for an organization.

Published: February 2007

Resources

  • The Fairtrade Foundation (FTF) helps farmers and other producers to earn a decent living and obtain good healthcare and education. Fair Trade Resource Network: http://fairtraderesource.org/about.html
  • Unltd (pronounced Unlimited), a charity supporting social entrepreneurs: www.unltd.org.ukExcellent resource to link with branded social enterprises and all the resources required to get started: www.socialenterprise.org.uk
  • Equitrade helps businesses in poor countries to develop finished or part-finished products to sell in rich countries: www.equitrade.org
  • The 4th Annual Socially Responsible Business Plan Competition is open to for-profit business (or business ideas) with at least one member who is a current student or has graduated within the past five years.
  • For more information contact: www.williamjamesfoundation.org or email ian.fisk@williamjamesfoundation.org.

https://davidsouthconsulting.org/2021/02/04/cuban-entrepreneurs-embracing-changes-to-economy/

https://davidsouthconsulting.org/2022/10/09/entrepreneurs-use-mobiles-and-it-to-tackle-indian-traffic-gridlock/

https://davidsouthconsulting.org/2022/10/20/ghana-oil-rich-city-sparks-entrepreneurs-and-debate/

https://davidsouthconsulting.org/2022/11/11/havanas-restaurant-boom-augers-in-new-age-of-entrepreneurs/

https://davidsouthconsulting.org/2022/11/15/indonesia-best-for-entrepreneurs/

https://davidsouthconsulting.org/2020/12/20/mobile-phones-engineering-souths-next-generation-of-entrepreneurs/

https://davidsouthconsulting.org/2020/12/17/mongolias-musical-entrepreneurs-led-way-out-of-crisis-2018/

https://davidsouthconsulting.org/2021/02/11/turning-street-children-into-entrepreneurs/

Development Challenges, South-South Solutions was launched as an e-newsletter in 2006 by UNDP’s South-South Cooperation Unit (now the United Nations Office for South-South Cooperation) based in New York, USA. It led on profiling the rise of the global South as an economic powerhouse and was one of the first regular publications to champion the global South’s innovators, entrepreneurs, and pioneers. It tracked the key trends that are now so profoundly reshaping how development is seen and done. This includes the rapid take-up of mobile phones and information technology in the global South (as profiled in the first issue of magazine Southern Innovator), the move to becoming a majority urban world, a growing global innovator culture, and the plethora of solutions being developed in the global South to tackle its problems and improve living conditions and boost human development. The success of the e-newsletter led to the launch of the magazine Southern Innovator.  

https://davidsouthconsulting.org/2021/03/05/southern-innovator-issue-2/

Creative Commons License

This work is licensed under a
Creative Commons Attribution-Noncommercial-No Derivative Works 3.0 License.

ORCID iD: https://orcid.org/0000-0001-5311-1052.

© David South Consulting 2023

Categories
Archive Development Challenges, South-South Solutions Newsletters

Women Empowered by Fair Trade Manufacturer

By David SouthDevelopment Challenges, South-South Solutions

SOUTH-SOUTH CASE STUDY

There is sometimes a great deal of negativity surrounding the issue of manufacturing in Africa. Some claim the risks of doing business are too high or that the workers are not motivated enough. But one garment manufacturer is out to prove the skeptics wrong. It pays decent wages and gives its mostly female workforce a stake in the business in a bid to drive motivation and make it worthwhile to work hard.

Liberty and Justice (http://libertyandjustice.com), one of Africa’s newest fair-trade garment manufacturers, is drawing attention for the way it is transforming women’s lives. It is also giving opportunities to a group often ignored by employers: women over the age of 30.

Liberty and Justice has factories in Liberia and Ghana, and 90 per cent of its workers are female. The company says it pays 20 per cent higher wages than the industry norm, and gives employees collectively a 49 per cent stake in the enterprise.

The global fair trade market – in which producers are guaranteed a minimum fair price and goods are marketed under the Fairtrade logo – has been growing year on year since it was established in the late 1980s.

The brand and certification process is managed by the Fairtrade Foundation (fairtrade.net) and is considered the most recognized ethical mark in the world.

More than 1 million small-scale producers and workers around the world participate in the Fairtrade system. As of 2013, fair trade has become a 5 billion euro-a-year (US $6.79 billion a year) global movement.

The label can be found on more than 30,000 products, ranging from tea to bananas to sugar and chocolate. It benefits more than 1.35 million farmers and workers around the world.

Liberty and Justice specializes in “high-volume, time-sensitive, duty-free goods for leading American clothing brands, trading companies, and other importers who care about exceptional quality, on-time delivery, social and environmental impact, and geographic diversity.”

The company wants to “transform the apparel supply chain from worker exploitation and environmental degradation to partnership and sustainability.”

Liberty and Justice was established by Chid Liberty (http://libertyandjustice.com/#about), the son of an exiled Liberian diplomat. His life had been a privileged one living amongst Africa’s overseas diplomatic community.

“I thought Africans drove (Mercedes) Benzes and dressed up every day and went to the best schools,” he told Fast Company magazine. “It even messed up my orientation on things like race, because we had all different kinds of people working in my house as a kid – German, Indian, Turkish – and all of them were serving us in some way. So I just kind of grew up thinking that Africans were at the top of the food chain.”

Living in a prosperous bubble in Germany, he had an awakening to the real conditions in Africa when he was in the seventh grade: “When I read only 2 per cent of people have a telephone, I was so confused,” he said. “I started to really understand my place.”

After the death of his father, Liberty started to wonder about life back in Liberia. He had moved on to working in Silicon Valley in California, helping technology startups get funding. Inspired by Liberia’s President Ellen Sirleaf (http://en.wikipedia.org/wiki/Ellen_Johnson_Sirleaf) and the end of the country’s 15-year civil war, he thought: “‘All right, well, I think I can apply that skill to providing economic opportunities for women.’ And decided to come here and try, in an industry that I knew absolutely nothing about.”

In 2010 he and Adam Butlein founded Liberty and Justice fair-trade apparel manufacturer. The company now makes tops and bottoms for brands such as Prana, FEED Projects, Haggar and others in the US.

“We really try to be worker-focused,” Liberty said. “And we actually think that’s what gave us a cutting edge at the end of the day: having really devoted workers. People don’t really believe in these types of factories in Africa, because they believe that African workers aren’t motivated. I think that’s hogwash.”

The company faced a dilemma common to any manufacturing enterprise trying to make goods for the highly competitive global export markets. How to produce the garments fast enough? A consultant had advised them to only hire young women. But Liberty and Justice had hired women in their 30s, 40s and 50s. Rather than firing everyone, the company decided to invest in the workers’ skills and get productivity to where it should be.

“These older women really set the culture of the Liberian Women’s Sewing Project, our first factory,” Liberty said. “They come to work an hour early – we never asked them to do that – they pray and sing together before they get on the machines, they’re very serious about the details of how your uniform should look, and you just wouldn’t have gotten that out of a bunch of 19-year-old girls the first time.”

Liberty and Justice expanded to Ghana in 2012 and launched the Ghanaian Women’s Sewing Project. It had to adapt to how things are done in Ghana, and that was a steep learning curve.

But the company has learned a great deal about how to succeed in Africa as opportunities increase alongside growing wealth and incomes.

“You could easily get squashed in Africa if you don’t know the right people. You’ll just get sent down rabbit holes every day,” Liberty said.

“In Liberia, the World Bank reports that about 40 per cent of children are enrolled in school. Among the women for whom we provide jobs, 98 per cent of their children are in school. So to me it’s very clear: You give a woman the opportunity to work, and her priority will be putting her kids in school.”

And he believes this is just the beginning of something big. As LIberia recovers from civil war, it will lead to an economic and innovation renaissance that will filter out across West Africa.

“I really think that the opportunities for innovation are right here. And once we get the social finance opportunities right, I think you’ll see a little West African impact renaissance happening. There’s still a lot of work to do. I hope Liberty and Justice can be a small part of that.”

Published: March 2014

Resources

1) Fairtrade International: Fair trade is an alternative approach to conventional trade based on a partnership between producers and traders, businesses and consumers. The international Fairtrade system – made up of Fairtrade International and its member organizations – represents the world’s largest and most recognized fair trade system. Website: http://www.fairtrade.net/

2) Fairtrade Max Havelaar Netherlands: The Max Havelaar Foundation is an independent non-profit organization that licenses use of the Fairtrade Certification Mark on products in the Netherlands in accordance with internationally agreed Fairtrade standards. Website: http://www.maxhavelaar.nl/

3) Ten Thousand Villages: Ten Thousand Villages is an exceptional source for unique handmade gifts, jewelry, home decor, art and sculpture, textiles, serveware and personal accessories representing the diverse cultures of artisans in Asia, Africa, Latin America and the Middle East. One of the world’s largest fair trade organizations and a founding member of the World Fair Trade Organization (WFTO), the company strives to improve the livelihood of tens of thousands of disadvantaged artisans in 38 countries. Website: http://www.tenthousandvillages.com/

4) Ananse Village: An online marketplace selling traditional African crafts produced in a fair trade environment. Website: http://www.anansevillage.com/

5) Ecouterre: An online guide to the best ideas, innovations and emerging trends in eco fashion, sustainable style, organic beauty and ethical apparel. Website: http://www.ecouterre.com

6) Partnering with the United Nations-endorsed Ethical Fashion Initiative, whose motto “Not Charity, Just Work” seeks to promote sustainable development over aid, New Zealand designer Karen Walker tasked Kenya’s finest micro-producers, designers, and craftspeople to produce screen-printed pouches that will accompany every Karen Walker eyewear purchase from the collection. Website: http://www.karenwalkereyewear.com/ and https://www.facebook.com/media/set/?set=a.10152167286434183.1073741834.92673569182&type=1

Google Books: https://books.google.co.uk/books?id=WBM9BQAAQBAJ&dq=development+challenges+march+2014&source=gbs_navlinks_s

Slideshare: http://www.slideshare.net/DavidSouth1/development-challenges-march-2014-published-44135069

Southern Innovator Issue 1: https://books.google.co.uk/books?id=Q1O54YSE2BgC&dq=southern+innovator&source=gbs_navlinks_s

Southern Innovator Issue 2: https://books.google.co.uk/books?id=Ty0N969dcssC&dq=southern+innovator&source=gbs_navlinks_s

Southern Innovator Issue 3: https://books.google.co.uk/books?id=AQNt4YmhZagC&dq=southern+innovator&source=gbs_navlinks_s

Southern Innovator Issue 4: https://books.google.co.uk/books?id=9T_n2tA7l4EC&dq=southern+innovator&source=gbs_navlinks_s

Southern Innovator Issue 5: https://books.google.co.uk/books?id=6ILdAgAAQBAJ&dq=southern+innovator&source=gbs_navlinks_s

Development Challenges, South-South Solutions was launched as an e-newsletter in 2006 by UNDP’s South-South Cooperation Unit (now the United Nations Office for South-South Cooperation) based in New York, USA. It led on profiling the rise of the global South as an economic powerhouse and was one of the first regular publications to champion the global South’s innovators, entrepreneurs, and pioneers. It tracked the key trends that are now so profoundly reshaping how development is seen and done. This includes the rapid take-up of mobile phones and information technology in the global South (as profiled in the first issue of magazine Southern Innovator), the move to becoming a majority urban world, a growing global innovator culture, and the plethora of solutions being developed in the global South to tackle its problems and improve living conditions and boost human development. The success of the e-newsletter led to the launch of the magazine Southern Innovator.  

Creative Commons License

This work is licensed under a
Creative Commons Attribution-Noncommercial-No Derivative Works 3.0 License.

ORCID iD: https://orcid.org/0000-0001-5311-1052.

© David South Consulting 2023

Categories
Archive Development Challenges, South-South Solutions Newsletters

China’s Booming Wine Market Can Boost South

By David SouthDevelopment Challenges, South-South Solutions

SOUTH-SOUTH CASE STUDY

A great South-South opportunity has emerged with the recent boom in wine drinking in China and the pursuit of quality tastes. Matching high-quality wine producers from the global South – including South Africa, Chile, Morocco, and Lebanon – with China’s thirsty wine drinkers could deliver a major income boost.

In the past year China has become the world’s fastest-growing wine market with newly wealthy seeking sophisticated tastes and young working women seeking the health benefits of wine (http://www.healthtree.com/articles/red-wine/). Yearly wine consumption in China is expected to increase by 20 percent to 126.4 million cases by 2014, a fact that is grabbing the attention of old and new-world wine producers.

Women are driving China’s growing market for wine, which is perceived as a symbol of affluence, a benefit to health – in moderation – and good for the skin. A new report from the International Wine and Spirit Research (IWSR) group says wine consumption in China and Hong Kong jumped 100 per cent between 2005 and 2009, from 46.9 million to 95.9 million cases.

Import taxes have been reduced as China entered the World Trade Organization (WTO), and this has prompted foreign wine brands to lunge into the market.

The government is trying to get people to switch away from high-strength alcoholic drinks by increasing the tax on them.

Awareness and experience varies widely amongst the winemakers of the global South. Some countries, such as South Africa, Chile and Argentina, have long-standing international reputations for producing quality wine, and use sophisticated branding and marketing campaigns to connect with their customers. But other countries, including Lebanon, Tunisia and Zimbabwe, have lower profiles and do not pack the same brand punch. But all these countries help show the role viticulture can play in economic development. By tapping into this Chinese wine drinking boom, they could reap rich rewards.

In Lebanon, viticulture – the harvesting of grapes for wine (http://en.wikipedia.org/wiki/Viticulture) – has prospered despite the country’s wars and instability.

Lebanon has a long and illustrious history of winemaking stretching back 5,000 years. The modern Lebanese wine industry dates itself from 1857, when Jesuit monks at Ksara in the Bekaa Valley began importing vines from Algeria. After World War I, when the French took control of Lebanon, its vineyards expanded to satisfy France’s thirsty imperial troops.

Then Lebanon was hit by the brutal civil war of the 70s and 80s. And things have remained unstable and uncertain since.

But despite this, well established businesses like Ksara (http://www.ksara.com.lb/), Kefraya (http://www.chateaukefraya.com/) and Musar (http://www.chateaumusar.com.lb/english/cave.aspx), and small boutique producers, thrive.

Massaya (http://www.massaya.com/old/wine.htm) is one of Lebanon’s most dynamic and successful wineries, owned by brothers Sami and Ramzi Ghosn. Both are Christians like many of the Lebanese winemakers. They have been able to succeed in an area fraught with tension from past conflicts.

Another winery is using the business to revive a community and restore old skills. In the hills east of Beirut, the BBC found Naji Boutros – who used to be an investment banker in London – and his wife Jill. Boutros started Chateau Belle-Vue in Bhamdoun (http://www.chateaubelle-vue.com/), in the village where he grew up. As well as producing wine, the Chateau finances community projects and a library.

The two kings in the global South of wine exports are South Africa and Chile. Both countries have very strong brand awareness in export markets and both have triumphed after years of boycotts due to the political situations in the respective countries (Chile’s military dictatorship and South Africa’s Apartheid regime).

Wine-making is one of South Africa’s oldest industries and plays a key part in the economy (http://www.wine.co.za/), with exports growing from less than 50 million litres in 1994 to more than 400 million litres in 2008 – year-on-year growth of 17 percent.

Since the end of the racist Apartheid regime (http://en.wikipedia.org/wiki/South_Africa_under_apartheid) in the mid-1990s, various government and industry initiatives have begun to reverse the iniquities of the country’s wine-making industry. South Africa has been pioneering switching black Africans on to the pleasures and profits of wine making and drinking.

Like Argentina, Chile (http://www.winesofchile.org/) has a strategic plan for its wine industry by 2020. It hopes to be “the Number One producer of sustainable and diverse premium wines from the New World by the year 2020.”

Chile – recovering from the severe earthquake on February 27, 2010 – uses a sophisticated marketing strategy to promote its wines, including websites, social networking media and events and tastings. Since 2007, it has unified its marketing efforts under one umbrella organization, the Vinos de Chile, and it also offers wine tourism to further develop a close relationship with drinkers, The Wines of Chile Experience (http://www.chilewinetourism.com/), launched in 2010.

Chile’s neighbour Argentina (http://www.winesofargentina.org/) is the world’s fifth largest producer of wine,

The country has seen its domestic consumption of wine shrink as tastes changed, and has also experienced very extreme economic fluctuations. It has had to raise its game in order to earn income from exporting. This has been a spur to the wine industry and it has seen growth since 1996.

Wine growing has a long history in Argentina, going back to its Spanish colonial foundations in the 1500s. Argentineans drank large quantities of wine domestically in the 1970s but this tailed off in the later decades.

That had been balanced by a great export success with wines from the malbec grape. The flavour of this wine and its brand image has proven to be a weighty ambassador for Argentinean wines in general. By keeping a competitive price, Argentinean wine has flourished during the global economic crisis as people have moved to less expensive brands. The country cleverly has a wine marketing strategy based on Australia’s experience. This is an ambitious plan with the goal of capturing 10 percent of the global wine market share by 2020.

Argentina also aggressively pursues new markets by visiting them regularly and doing wine promotions and tastings with potential customers. It also brings people to the country to visit the wineries and experience Argentinean culture and food.

In North Africa, Algeria, Tunisia and Morocco have a long history cultivating wine and have been winning awards since the 1859 Fall Exposition in Paris. Over the years quality control was an issue as political and economic factors disrupted access to global markets. But in the last few years governments have been working to support the industry and regain its past reputation.

Winemaking in North Africa goes back to the Romans and the Phoenicians. Despite Islam prohibiting the consumption of alcohol, the industry has survived. The industry is currently being re-organized to make the most of a free trade agreement with the European Union.

Tunisia has a long, rich winemaking heritage known the world over. About half of Tunisia’s vineyards are dedicated to producing grapes for wine production rather than for sale as table grapes.

Over the last 20 years, Les Vignerons de Carthage, a cooperative of 10 cellars located in the Cap Bon region of Northern Tunisia, have been working under the leadership of Belgacem D’Khili, a Bordeaux trained oenologist to improve and maintain wine quality.

They have kept the old vines, persevered with hand-harvesting and traditional techniques, but have modernised the cellar equipment, the storage and overall approach to hygiene.

North African wines are being collectively marketed by resellers like Cotes d’Afrique (http://www.cotes-d-afrique.co.uk/tunisianwine/history.aspx).

Morocco, too, has become a respected wine maker and has a robust domestic wine-drinking market. Morocco’s oldest winery, Celliers de Meknes (http://www.lescelliersdemeknes.net/), told the Global Post how it handles the delicacies of wine-making in a majority Muslim country.

“We are tolerated,” said Jean-Pierre Dehut, the export manager for Celliers de Meknes. “But the tolerance requires that we stay within certain boundaries.”

Celliers de Meknes sells some 30 million bottles of wine per year — 25 million in Morocco.

A little-known wine producer, Zimbabwe has been producing wines since the early 1950s and commercially since 1965, according to Zimbabwe Tourism. Production peaked in the 1980s and later suffered from an export ban. Despite the country’s economic and political problems, the wine industry has grown. New techniques, equipment and grape varietals have been introduced and winemakers have been trained in Germany, Australia and South Africa. Regular visits from outside consultants have helped with raising standards.

Apart from economic problems the industry struggled with viruses and climate. But since the 1990s the industry has started to win international wine competitions

One of the successful wineries is Mukuyu Winery (http://www.africanbeersandwine.com/pages/wine.html), which produces an average of 1.5 million litres per year from 100 hectares under vines. Over the past 13 years, Mukuyu wines have won Silver and Bronze medals at the International Wine and Spirit Competition in London, and regional wine tasting competitions in South Africa.

Published: January 2011

Resources

1) China Wines Information Website: A website with the latest news and events on China’s fast-growing wine market. Website: http://www.wines-info.com/en/index.aspx

2) Interwine China 2011: The 6th China (Guangzhou) International Wine and Spirits Exhibition and World Famous Wine Expo, May 25th to 27th, 2011. Website: http://www.interwine.org/interwine/pages/2010/index.interwine

3) Shenzhen International Wine Hub: Shenzhen International Wine Hub is located in downtown Longgang, and is designed to provide an unprecedented one-stop platform for all wine-related business, integrating product exhibition, wine trading, wine information and statistics publishing, wine knowledge training, quality examination and evaluation, wine culture showcasing as well as food and recreation. Website: http://www.szwinehub.com/en/

4) Zimbabwe Tourism: Website: http://www.zimbabwetourism.net/index.php?option=com_content&view=article&id=119&Itemid=144

5) Soweto Wine Festival: Website: http://www.sowetowinefestival.co.za/About.htm

Development Challenges, South-South Solutions was launched as an e-newsletter in 2006 by UNDP’s South-South Cooperation Unit (now the United Nations Office for South-South Cooperation) based in New York, USA. It led on profiling the rise of the global South as an economic powerhouse and was one of the first regular publications to champion the global South’s innovators, entrepreneurs, and pioneers. It tracked the key trends that are now so profoundly reshaping how development is seen and done. This includes the rapid take-up of mobile phones and information technology in the global South (as profiled in the first issue of magazine Southern Innovator), the move to becoming a majority urban world, a growing global innovator culture, and the plethora of solutions being developed in the global South to tackle its problems and improve living conditions and boost human development. The success of the e-newsletter led to the launch of the magazine Southern Innovator.  

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