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SELLING SKINNYGIRL WINE IN JOHANNESBURG

Sub-Saharan Africa Marketing Plan


Running head: Selling Skinnygirl Wine in Johannesburg, South Africa
Luke Ball, Lindsay Berk, Chris Crawford, Matt Bishop
Towson University

SELLING SKINNYGIRL WINE IN JOHANNESBURG

I. Executive Summary
With the South African wine market expanding rapidly, our group decided to
market a low calorie alternative to the people in Sub-Saharan Africa. The product,
Skinnygirl Wine, is targeted at women aged 18-34 in the Gauteng region of South Africa,
specifically in the city of Johannesburg. This wine, both low in calories and small in
portion size, will combat current wines through a competitive price that women of the
city can afford.
Skinnygirl Wine will break through the South African market with five of the
most popular American wine flavors. These flavors consist of California White Wine,
Chardonnay, Pinot Grigio, Moscato, and Cabernet. To help with the introduction to the
South African wine market, we have inquired with Sasha Pieterse to promote the
Skinnygirl lifestyle. Sasha, world famous from her role as Alison DiLaurentis on the
ABC Family show Pretty Little Liars, was born in Johannesburg and is seen as a status
symbol in the city. With her help, our wine will establish itself not only as a healthy
alternative to drinking but also as a social queue to the high class lifestyle many South
African women this age like to lead.
II. Johannesburg General Facts
1. Geographical setting
The specific region that we chose to start a new product line in is Johannesburg,
South Africa. We chose this particular city because it is the largest and wealthiest city in
Sub-Saharan Africa and equally contributes to the capital region of South Africa (Ryan
and Holley, 2014). Currently, with a population of about eight million people,
Johannesburg is in a constant state of growth. Located 550 kilometers south of the
countrys northern border and 1400 kilometers from the southern border, Johannesburg is

SELLING SKINNYGIRL WINE IN JOHANNESBURG

geographically supported by mountain ranges from the northern and western edges of its
borders (Johannesburg Geography, 2014). These borders, which are located in the
Gauteng region of the country, help separate this cosmopolitan city from the rest of South
Africas region, establishing its capital. Thus, these geographical features as well as the
cultural ties among its population have allowed Johannesburg to prosper as the hottest
tourist attraction in South Africa (Ryan and Holley, 2014).
Another factor leading to the growth of Johannesburg is its favorable climate.
Opposite from what Americans are used to, October to the middle of March is considered
to be Johannesburgs summer months, and their winters last from May to August (Ryan
and Holley, 2014). Typically, one can expect sunny and dry weather with some rain
showers experienced anytime between October and April. Additionally, in the months of
January where we would typically experience cold fronts, Johannesburg has a favorable
temperature of seventy-nine degrees Fahrenheit (Ryan and Holley, 2014).
When winter comes along in Johannesburg it is a very great time of the year. As
the months progress into June, the weather declines and Johannesburg reaches a
temperature of around sixty-one degrees Fahrenheit (Ryan and Holley, 2014). These days
consist of enjoyable and calm days in which most citizens enjoy. Johannesburg rarely
ever has snow; the last time it snowed in this region was in 2007, before that was in 2006,
and then again in 1981 (Ryan and Holley, 2014). The reason that Johannesburg has such
great weather patterns is due to its high altitude that is directly above sea level (South
Africa Info). The area where it is located on the map is classified as North towards the
Vaal River, at the top of South Africa (Johannesburg Geography, 2014).
2. History
Historically speaking, Johannesburg was founded in the 1880s, right after the
discovery of diamonds and gold on the land (Ryan and Holley, 2014). Because of this

SELLING SKINNYGIRL WINE IN JOHANNESBURG

discovery, many people flocked to this area in hopes of jobs and money. Deemed Egoli
in the native African language Zulu, (known as City of Gold in English)
Johannesburgs past successes are unparalleled across the globe (Ryan and Holley, 2014).
Historians have claimed that around 40% of the worlds gold first originated in
Johannesburg. Thus, the original migration of people to Johannesburg has led to not only
the expansion of the Gauteng region, but also South Africas overall GDP.
3. Language
The languages used in Johannesburg are rooted in rural South African history. Its
main language, Zulu, carries the most influence among the locals. Some others include
the native tongues Afrikaans and Xhosa, as well as a combination of nine others to add to
its varied culture (Ryan and Holley, 2014). Additionally when it comes to business
communications, English is the most common language used, as it typically is around the
world. However, it should be noted that the dialect of this English is rooted in British
influence rather then American influence (South African Info). Hence, these languages all
contribute to the day-to-day interactions of the people that live in Johannesburg.
III. Economic Analysis
1. Population and its distribution
Johannesburg is the capital of the Gauteng province of the country of South
Africa. This city, with a population is 3.2 million people spread across 1,006,930
households, (Joburg, 2014) is the economic powerhouse of Sub-Saharan Africa. Within
Johannesburg, 42% of the residents are under the age of 24, while 49% of the population
is under the age of 34 (Joburg, 2014). The city covers a total of 1 644km, with an
average density of 1 962 persons per km. The most spoken language in South Africa,
Zulu, is spoken by 22.7% of the people (Joburg, 2014). While black Africans make up

SELLING SKINNYGIRL WINE IN JOHANNESBURG

79.2% of the population, 8.9% are Caucasian and 2.5% are Indian/Asian (Joburg, 2014).
The country has a population growth rate of -.048%, and 62% of the people live in urban
environments (Joburg, 2014). Johannesburg South Africa proves to have a dense
population in which most of the population are under the age of 40 and would be subject
to our target market. Based on population information, the Skinnygirl product would have
positive feedback and exposure in this area.

2. Economic Statistics
Johannesburg South Africa is classified as one of the larger inland ports in the
world as it handles up to 30% of South Africas exports (CIA, 2014). The infrastructure
of Johannesburg matches roads and telecommunications as there are 7,519 km of roads in
Johannesburg in which 614 km are tarred roads (Joburg, 2014). Johannesburg has
increased its maintenance of current infrastructure by three fold as the current 2.4% of
budget was attributed now to 7% of the budget which is a 4% increase (Joburg, 2014).
The plan to attract investment by building businesses to the inner city are
increasingly showing results, as The Central Business District is becoming a precinct that
has emphasis on mixed-used plan development with an increased demand for low-income
housing.The inflation rate of Johannesburg is 6.4% based on a 2013 result (Joburg,
2014). The city has 1.5 million economically active people out of the 3.2 million
population, as Gauteng is the financial capital of Africa with more than 70 foreign banks
that have their head offices in the province (CIA, 2014).
In South Africa, the GDP official exchange rate was $353.9 billion as the GDD
per capita was $11,500 in 2013 (Joburg, 2014). The countrys backbone financially is

SELLING SKINNYGIRL WINE IN JOHANNESBURG

based on gold and diamond mining, as they hold up to 40% of the worlds gold in the
country's landscape (Ryan and Holley, 2014). It also has the worlds largest producer of
platinum, gold and chromium. Automobile assembly, metalworking, exiles and
machinery are also made in South Africa. Agricultural products include, corn, wheat,
sugarcane, fruits, vegetable, beef, poultry, mutton, wool and dairy products (Ryan and
Holley, 2014). The industrial production growth rate is .9% while the labor force commits
to $18.54 million in 2013 (Joburg, 2014). The population below the poverty line is at
31.3% as the unemployment rate is at 24.9% in 2013 (Joburg, 2014).
Lastly, the exports of the country account for $91.05 billion of the country's
money, and imports account for $99.55 billion (Joburg, 2014). Some export partners of
South Africa include China, USA, Japan, Germany and India (Joburg, 2014). This
relevant economic statitistics should prove helpful in the conquest of our product.
IV. The Product
1. Analysis of relevant trends
With the expanding wine market in South Africa, there are some relevant trends
that will contribute to the success of Skinnygirl Wine. The first is the growing Black
Diamond Middle Class in Johannesburg. This economic class is made up of black
individuals in Johannesburg that once worked the mines and is now in a position of
growing power throughout the Gauteng region (Loubser, 2004). This group is looking for
ways of promoting social wealth such as public consumption of wine vs. beer (Loubser,
2004). Wine is a social symbol and the growing class should help in our sales area.
Some other trends that will contribute to stores wanting to sell our product include
portion control from the government, the expanding wine industry in South Africa, and
an expected grape shortage in the country. The government in Johannesburg is looking

SELLING SKINNYGIRL WINE IN JOHANNESBURG

for ways to fight DUIs and portion control is an answer for doing so. Our product is sold
in portions of 15 FL OZ, which is much smaller than the norm (Euromonitor, 2013). This
should provide an incentive for stores to carry Skinnygirl. Also, according to the Distell
Group, because of the expanding wine market in South Africa, the major producers of
wine are worried about an upcoming wine shortage within the next five years (Distell,
2014). Using North American grapes, our product will not be affected by this shortage
and will have an economic advantage over the competition. These two factors are trends
that will hopefully lead to the success of the product.
2. SWOT analysis
When discussing the SWOT analysis of the product market of our product,
Skinnygirl Wine, there are many factors that are present. First, we will talk about the
strengths of bringing this product to Johannesburg. One of the strengths would be that
wine is a big and emerging industry in South Africa. Since Johannesburg is one of the
richest cities in South Africa, citizens will be able to purchase our new wine and enjoy it
to the fullest. Price should not be an issue when trying to introduce Skinnygirl into this
area. Another strength is our pricing compared to other wine bottles in South Africa. We
are selling these bottles for 55 Rand or $5.23 each. Our bottles are 15 fluid ounces, which
is half the size of a normal wine bottle sold in South Africa. Even though citizens residing
in this city have money, we are offering them this wine at a low price so it will influence
them to want try out the wine when it first comes to the market. We think that since
Johannesburg is such a wealthy, highly populated town, with many entrepreneurs and
businesses highly active that it will be no problem trying to sell this wine bottle to the
general public.

SELLING SKINNYGIRL WINE IN JOHANNESBURG

Another strength would be that these smaller bottles of wine would only contain
around 100 calories per bottle. This keeps the people that are drinking this wine feeling
better because they are only consuming a certain amount of wine and it is not nearly as
many calories if they consumed a regular bottle of wine. When conversing about
weaknesses they are also a few factors. One of the major ones would be that there is
already a large range of wines being offered in Johannesburg that the residents drink. This
could be looked at as strength as well because it is great that the residents already
established that they are drinking and interested in wine. However, people already have
their wine preferences decided and it might be hard to sway peoples opinions on what
types of wines they should purchase.
One weakness for Skinnygirl is that this is a new brand name because people in
Johannesburg might not want to expand their horizon. We would need to be able to
market this product successfully so that the people will give it a chance. It is also a
weakness that Skinnygirl is already a company in America. Sometimes people have
preconceived judgments when new products are put into place. Since this product is
already a company in America anyone could look up reviews and topics on these wines
and if there is bad publicity out about it then no one will be willing to try it. We are
hoping that people will have an open mindset when going to try Skinnygirl and not base
it off of any negative comments that there might be out about it.
Some opportunities that we hope will come out of introducing Skinnygirl in
Johannesburg is first that we hope the residents enjoy this wine and make it successful so
that it can continue in the market. We are hoping that since we are using Sasha Pierterse
as a spokesperson for Skinnygirl that she will also be able to attract woman who see her

SELLING SKINNYGIRL WINE IN JOHANNESBURG

as a celebrity and wish to indulge in the wine because she is connected to it too. We think
that opportunities will come out of selecting Sasha as the spokesperson because she is
originally from Johannesburg South Africa so that the residents are familiar with her face
and like her as a person. Sasha is an actress on ABC Family show Pretty Little Liars. She
is already an established pretty face and demonstrates the typical Skinnygirl image that
we would think of. We are hoping by using a famous local as the spokesperson that it will
be able to take this product even further because she is well liked by the townspeople and
also people all over the world.
Some other opportunities that could result from Skinnygirl are that it could turn
people into drinking healthy. Everyone is aware that drinking adds calories onto
everyones daily consumptions. We are hoping that this will change the way people drink
and will not be harmful to them because the calorie intake is much less. We are adding a
smarter choice drink that will hopefully shape the minds of woman who are trying to
watch their weight, but still wish to indulge in alcohol occasionally.
There are some threats that are also apparent when trying to introduce Skinnygirl
in Johannesburg. There is currently a lot of competition in the wine industry. There are
many wine shows and events that take place frequently in this area. According to
Localwineevents.com there is a spring event every year that has many wines from all
over that are trying to gain more customers (Local Wine Events, 2014). This is a threat
because we have many competing customers and that could affect us when entering this
industry. Another threat could be any other type of alcohol that is popular in
Johannesburg such as beer and vodka. We would like everyones full attention to be on

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wine and that might not be possible if the citizens are enjoying beer and vodka more
regularly then wine.
3. Target market
Breaking down the population of Johannesburg we have reached a specific target
audience for Skinnygirl Wine. Specifically, we are targeting women, aged 18-34, of
Caucasian and Black Diamond races, in urban centric Johannesburg. After using the
statistics found on Joburg.com, Johannesburgs official website, we have concluded that
this market consists of around 590,000 women (Joburg, 2014). The reason as to why we
chose these market segments is broken down below.
According to Professor SS Loubsers Generic Market Development Strategy for
South Africa, there are certain market segments that thrive in the sale of wine.
Specifically, the Gauteng region makes up the majority of total wine consumption in
South Africa. In this region, women consist of 62% of alcohol drinkers the only consume
wine, 40% are aged 18-34, and black and white drinkers make up over 90% of the market
(Loubser, 2004, pp. 10-13). With the expected shortage of grapes in South Africa and
growing Black Diamond middle class, these numbers are expected to grow.
4. The product
a. Skinnygirl wine and its need
Skinnygirl Wine is a series of cocktails and wines that are light in calories. The
purpose of Skinnygirl Wine is a to allow the consumption of a flavorful alcoholic
beverage without suffering a high calorie intake (Skinnygirl, 2014). This type of wine is
perfect for the current South African trend in demand for low calorie alcoholic beverages
(Euromonitor, 2013). Skinnygirl Wine will be offered in five core flavors: California
White Wine, Chardonnay, Pinot Grigio, Moscato, and Cabernet. These wines, made from

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northern California grapes (Skinnygirl, 2014), will help combat current wine
consumption in the country. According to the South African Country Wine Report,
women of South Africa are the driving force behind this trend (Euromonitor, 2013). This
parallels our target market because we are focusing on selling Skinnygirl Wine to women
in Johannesburg, where there is a substantial amount of women 18-34 years old (Green,
pp. 11).
b. Benefits and usage
Skinnygirl Wine fits the current trending demand of South African women for two
reasons. According to the Washington Post, Skinnygirl Wine contains just over 300
calories for every 45 ounces consumed (Ingraham, 2014). Our fifteen-ounce bottle, which
is on average around four standard drinks (Drinkaware, 2014), is typical consumption of
casual drinking. Using simple math, one can then calculate that our Skinnygirls bottle is
roughly around 100 calories. This means that the women of Johannesburg can drink three
Skinnygirl Wine beverages while maintaining a low calorie diet. Additionally, another
other benefit of Skinnygirl Wine is that production of single serving size bottles. This
parallels the South African Country Wine Report, which states that women in South
Africa are fearful of getting DUIs (Euromonitor, 2013). By selling the wine in individual
bottles it will help meet the demand of South African women of being able to monitor the
amount they drink.
The usage of Skinnygirl Wine in Johannesburg will be the same as the usage of
alcoholic beverages anywhere else in the world. Our product will be used in casual
drinking situations as well as club and bar situations. Whether Skinnygirl is drunken in a
casual circumstance or a binge circumstance, it will remain beneficial in comparison with

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any other alternative. If Skinnygirl is consumed in a 1-3 drink manner, it will still reduce
calories when compared to any other alcoholic beverage consumed in a 1-3 drink manner.
If the women choose to binge drink, they will also still reduce calories by choosing
Skinnygirl over any other alternative.
c. Competitive landscape, positioning, and distribution
The main competitor for Skinnygirl Wine is the Distell Group. The Distell Group
as of 2012 controlled 35% of all the South African wine volume sold (Distell, 2014). The
Distell Group owns 44 different types of wines that are sold in South Africa (Distell,
2014). However of these wines, none offer a low calorie makeup such as Skinnygirl.
According to the South African Country Wine Report, the Distell Group predicts a
decline in their wines in the next 5 years due to a grape shortage (Euromonitor, 2013).
This is beneficial to Skinnygirl because not only will this increase the demand but the
Skinnygirl wines will be imported meaning the grape shortage wont affect the product.
Some other sources of competition include the low calorie drinks already offered
in South Africa. Some examples of wine that fit this description include Fluer Du Cap,
Olive Brook Wines, Robertson Winery, and Uitkik. Although these wines are low in
calories, their sugar contents are still very high and are not offered in small portions.
The positioning and distribution of Skinnygirl will be accomplished through
selling the wine to Johannesburg wine stores. This will allow women of drinking age to
easily obtain Skinnygirl Wine. Additionally, by offering Skinnygirl at clubs, we will
hopefully be able to sell the image of our product through different promotions. Using
price segmentation, we can maintain an affordable price in the market while keeping a
social status in Johannesburgs nightlife.

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Lastly, the unique, low-calorie features of Skinnygirl will separate it from the
standard Distell Group Wine. The Distell Group Wine doesnt meet the current demand
by women for a low calorie wine in South Africa.
d. Pricing
According to the Cost of Living statistics by Numbeo, the average bottle of wine
in Johannesburg sells for about 48 Rand or $4.95 (Numbeo, 2014). This works great for
Skinnygirl because each serving size bottle of Skinnygirl can be sold around that price
range. Not only does this meet the trending demand for portion control due to DUIs, but
also it will allow Skinnygirl to make more money per ounce than the Distell Group. The
Distell Group according to their website only specializes in selling multiple serving size
bottles (Distell, 2014).
e. Promotion
In order to promote Skinnygirl, it is important to focus strictly on how it meets the
South African womens demand. In Johannesburg where there is a big target market, it is
important to get the wine as much exposure as possible. Promoting Skinnygirl would be
beneficial on billboards, signs on stores, and discounted beverages in wine stores. The
use of billboards and signs on stores will make sure that women are exposed to the
identity of Skinnygirl. The store advertisements will be where in places women go
frequently such as grocery stores and jewelry stores. The offering of discounted
beverages in wine stores will encourage new customers to buy Skinnygirl for the first
time since it will be cheaper then other wine. As we stated before, Sasha Pieterse will be
our spokesperson in all of these promotion places in the city. Through her fame and our
product promotion, Skinnygirl will develop an immediate identity in Johannesburg.

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V. Projections
1. Sales volume
The sales volume that we are going to sale starts off with the price and the
population of the target market. The price that we are going to sell the single serving size
bottle is 55 Rand ($5.23). Since it is only a single serving size bottle (15 ounces), it will
important to have a high distribution of bottles. As a starting point, we will distribute
1,000,000 single serving size bottles at 55 Rand per bottle. In order to obtain the
penetration rate a number is derived from the demographic statistics discussed earlier that
approximately forty percent of people in Johannesburg are 24 years of age or younger
and approximately fifty percent of people in Johannesburg are 34 or younger (Joburg,
2014). The calculation of the penetration rate is as follows:
.10 (population of target market as percent) X 3,200,000
=320,000
320,000/3,200,000
=10 percent Penetration Rate
2. Revenue
The revenue is calculated by multiplying the penetration rate by the target market
population by the price per bottle. The following is the calculation of the revenue:
.10 X 320,000 people X 55 Rand
= 1,760,000 Rand or $167,200

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However, since alcohol is typically bought multiple times, this number only
reflects if one single serving bottle was bought per person. If two bottles were bought per
person, this number would double and so on. Below is a chart representing this.
1 Bottle Per Person
2 Bottles Per Person
3 Bottles Per Person
4 Bottles Per Person
5 Bottles Per Person
6 Bottles Per Person

1,760,000 Rand
3,520,000 Rand
5,280,000 Rand
7,040,000 Rand
8,800,000 Rand
10,560,000 Rand

3. Profit
The profit is derived from the difference of the cost of selling and the expected
revenue. The cost of selling can be determined by finding out the manufacturing cost of
Skinnygirl Wine. According to the New York Times, the average profit margin of a bottle
of wine is 40 percent. Since we will be distributing Skinnygirl Wine in 15 ounce bottles,
every 4 bottles of Skinnygirl we sell will amount to the typical wine bottle. It can be
assumed that since 4 bottles would equal a 40 percent profit margin, then 1 bottle of
Skinnygirl will equal a 10 percent profit margin. According to the South Africa Wine
government website, a permit will need to be acquired with a fee in order to import more
than 24 liters in a single shipment (Euromonitor, 2013). This permit includes tariffs for
imports and costs of shipment, however this information is case to case and wasnt
disclosed (Euromonitor, 2013).
10 Percent Profit Margin X 1,760,000 Rand Revenue
= 176,000 Rand
1,760,000 Rand Revenue 176,000 Rand Profit
Total Expenses= 1,584,000 Rand

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The total profit projection per bottle sold is shown below:


1 Bottle Per Person
2 Bottles Per Person
3 Bottles Per Person
4 Bottles Per Person
5 Bottles Per Person
6 Bottles Per Person

176,000 Rand
352,000 Rand
528,000 Rand
704,000 Rand
880,000 Rand
1,056,000 Rand

References
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Foxcroft, M. (2009, January). Growing the consumption of wine amongst emerging


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South African Info. (2012, November 15). Gauteng province, South Africa. Retrieved
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