Demand side shifts and strategic responses in South African wine value chains

Changes in consumer behaviour are driving structural transformation in the global wine industry, with slowing demand in mature markets, increasing sustainability pressures, and shifting preferences among younger consumers reshaping wine consumption and value creation. This study examines how South African wineries are responding to these demand-side changes and whether their strategies enhance resilience. Using a systems thinking approach, we conducted in-depth interviews with 17 wineries and industry stakeholders and applied causal loop diagramming to identify feedback mechanisms shaping strategic decisions. The findings show that wineries do not respond uniformly; instead, business model differences influence adaptation strategies. Some wineries become trapped in discounting cycles that erode margins, while others protect profitability through premium branding, tourism and experiential offerings, market diversification, and pricing discipline. The study concludes that wineries’ capacity to maintain profitability, as an important economic dimension of resilience, depends less on reacting to declining consumption and more on a winery’s structural position within reinforcing and balancing feedback loops that shape strategic responses.