1. Development of organic wine production in South Africa
Development of organic wine production in South Africa. A wine tourism perspective.
Radu Mihailescu

2. Wine tourism has recently been earmarked as an important driver of tourism development and it can represent a major contributor of rural economic development. The wine estates form an important component of the South African tourism industry with wine estates providing wine tasting as well as supporting restaurants, guest houses and shops.

3. Wine production worldwide in 2016, by country (in million hectoliters)
Source: Statista, 2017

4. The competition in the wine tourism has increased rapidly, with many countries trying to capture a share of the tourism market. As a result in order to obtain competitive advantage among destination eco-friendly attributes and claims are starting to play a key role in attracting wine tourists as shown by a number of researchers (Getz and Brown, 2006, Orsolini and Boksberger, 2009, Holohan & Remaud, 2014 ).

5. Objective of the research
The development of a with focus on : - Potential WTP revealed by the respondents using a contingency valuation method - The extent to which the Willingness to Pay can represent a signal for the wine producers in their quest for attracting more visitors and also in selling more wine products.

6. Methodology
A hypothetical market situation for a good or service is created by means of the Contingent Valuation Method (CVM). CVM creates a hypothetical market situation for a given good or service. It tends to quantify the value consumers confer to products by associating that value with the sum of money they are willing to pay. (Kawagoe & Fukunaga, 2001; Sellers-Rubio & Nicolau-Gonzalbez, 2016 ) A total of 215 tourists were interviewed in different locations of selected hotels and wineyards in the Western Cape. Subjects were randomly intercepted to participate in the experiment. The wineyards selected were Avondale, Lazanou Organic vineyards and Reyneke Wines. These wineyards produce both organic as well as non-organic wines.

7. Methodology
Each respondent was asked at the sampling point if he/she was willing to pay the difference between conventional and organic prices. In order to obtain the parameters estimates for each selected product, a Binomial Multiple Logistic Regression was applied. The method is based on the following formula: WTPij = α +β1 (Pj) +β2 Yj +β3 πj +F (Zj) Where: WTPij i consumer´s willingness to pay for j type of wine; α, β1, β2, β3. Coefficients to be estimated, where P is the organic price premium; Y Income level; π quality attributes perceptions; Z Socio-demographic characteristics. The model was run separately for both white and red wines. The demographics of the respondents where explored based on the age, income country of origin.

8. Profile of the respondents (n = 215)
Age 
21-30 39
18%
30-40 89
41%
40-50 55
26%
50 + 32
15%
Country of Origin 
South Africa
129
60% UK 30
14%
Germany 22 9%
Netherlands 13 6%
Rest of the World 21
11%

9. The fit of the WTP function for red organic Dependent variable WTP
Coefficient
Standard Error
Z-Stat
p-value
Constant
12.25
-1.77
0.010
Awards
1.235
19.180
2.058
0.040
Taste
25.130
22.842
1.100
0.017
Quality Perception
-1,710
12.710
-1,130
0.050
Certification
2.620
10.830
1.400
0.042
Recommendations
15.323
12.177
1.880

10. The fit of the WTP function for white organic Dependent variable WTP
Coefficient
Standard Error
Z-Stat
p-value
Constant
11.23
-1.54
0.026
Awards
1.219
18.180
1.058
0.037
Taste
26.539
20.142
1.119
0.045
Quality Perception
-1,230
10.310
-1,429
0.039
Certification
2.301
10.133
1.735
0.049
Recommendations
13.450
10.717
1.960
0.034

11. Predicted WTP equation for the red and white organic wines
WTP (red) = Award Taste Perception Cert Rec WTP (white) = Award Taste Perception Cert Rec When the median values (obtained from the sample data) are substituted then predicted Median WTP (red) = R 32 (Eur 1.5) and Median WTP (white) = R 41 (Eur 2.67)

12. Potential benefits to the development of organic wine tourism
The WTP results show that the respondents might be willing to pay a premium for South African organic wines.
Taste and recommendations have the highest positive impacts on the WTP, which makes a case for an increase in marketing efforts by the wine producers.
Preliminary reports show that about 40% of the respondents have visited the wine farms after the experiment.
WTP only shows indication of purchase
Due to legislation the quality of organic wines differs greatly.

13. Thank You !