Busting the Big Tank Myth: Durbanville Hills

dhwThere are easier ways to get to Durbanville Hills Winery than aboard a snorkel-equipped Land Rover, but I don’t think there’s a better way to go.

They brought out the 4×4 vehicles (snorkel-equipped — who knew? — so the engines can breathe even in deep water crossings) so that we could experience and appreciate the hills, the vineyards and the rugged terrain even before we came to the winery itself and the braai lunch that was planned for us there.

My visit to Durbanville Hills Winery started as adventure and became a learning experience about the diverse nature of wine in South Africa. Now it is also Exhibit A in the case against the One Big Tank myth that I wrote about last week.

The Big Tank theory is that giant wine and drinks companies with dozens of brands in their portfolios offer consumers the illusion of choice, not real choice. It’s as if all the different wines came out of one big tank.  Although there is a grain of truth in this idea, I think it is fundamentally bogus and Durbanville Hills is a case in point.

From Oom Tas to Nederberg Noble

Durbanville Hills Winery is part of the Distell drinks empire. As I wrote last week, Distell is South Africa’s largest wine and spirits producer and is a global power in several beverage categories. They superficially fit the Big Tank stereotype, but within their range of brands you will find choices over a wide range starting with very basic wines such as Oom Tas (described as “an inexpensive, dry, golden, unsophisticated wine of constantly good quality and taste”) and Kellerprinz (” an unpretentious, fun wine, its quality is nevertheless good and consistent, offering value for money”) and moving on up the ladder to the rather special Nederberg Noble Late Harvest wine I wrote about last year.

Durbanville Hills Winery is a relatively new addition to the Distell group.  The winery is beautiful in a modern way that does not seem out of place for its setting. The public spaces are welcoming, the restaurant gets good marks and you can’t beat the views looking out over the vineyards or on to the city. It looks like Distell has put a lot of time and money into the operation and the result is impressive.

Even Lettie Likes It

The wines are impressive, too. I especially liked the Sauvignon Blanc, which seems to do especially well in these hills. And the Pinotage is good enough to get a nod from self-confessed Pinotage-hater Lettie Teague, wine critic for the Wall Street Journal.

Durbanville Hills’ wines are distinctive (which runs counter to the Big Tank myth), but in fact the whole operation is unusual and not what you would expect from a “drinks company” winery at all.

Durbanville Hills was founded in 1999 as a partnership between Distell and seven wine farms in this region and the first wines were released in 2001. This area has a long history of wine growing — the youngest of the farms was founded in 1714 according to the winery website.

Triple Bottom Line

Distell’s representatives sit on the winery board, as I understand it, along with the farmer partners plus a workers’ representative. The wine farm workers have a 5% equity stake in the business that is administered through a trust that provides a number of social and economic benefits to workers and their families. Durbanville Hills was one of the first wineries to be accredited by the Wine Industry Ethical Trade Association. 

Cellar master Martin Moore is an enthusiastic promoter of a particular brand of sustainability that is sometimes called the “triple bottom line” approach (although he never used this term when talking with me). Businesses need profits to sustain themselves in the long run, of course, but economic sustainability doesn’t mean much if the environment is sacrificed (true for all business, but especially for wine), so you have to add that factor into the equation. And what are planet and profit without people? Communities must be sustained along with business and the environment. So true sustainability is the intersection of the three spheres of life taken together.

To quite intentionally organize a wine company around these values is a long term commitment and not the sort of thing that you associate with a corporation nervous about quarterly earnings reports. But it seems to me that everyone at Durbanville Hills is in this for the long run and the structure of the business is meant to keep it that way. It’s an impressive achievement and it makes a glass of Durbanville Hills wine a particularly satisfying drink.

Not Free Range

Clearly there are values and principles beyond a simple short-term profit motive behind the Durbanville Hills project, but they are usefully balanced with a sense of realism — you have to be pragmatic to make the triple bottom line work because this idea of business  isn’t about avoiding trade-offs, it’s about confronting them and making effective choices.

I saw this in a sort of sustainability manifesto that Martin Moore gave me at the end of my visit. Moore writes that, “We farm responsibly … not organic, not biodynamic … but sustainably.”  I think his point is that it is difficult to balance all three bottom lines if you swear off potentially important tools. “I would not even claim that we have free range vines,” he jokes, “as most of it is stuck in a trellis system.”

But I do believe that if we continue improving strengthening our 3 pillars of sustainable farming Durbanville Hills, our producers, our farm workers and community will hand over a successful business to the future generation without having to apologize.P1040576

Myth and Reality

Clearly Durbanville Hills Winery doesn’t fit the Big Tank theory and I think it is an indication that Distell and other giant wine and drinks companies are capable of offering wine consumers real choice — choice in both the wines themselves (which is the point after all) and in the entire wine experience.

It would be easy to make the case that Distell and Durbanville Hills are special cases. South Africa has a unique wine history that stretches back for hundreds of years and a unique social history, too, which motivates many there to address directly issues of race and inequality.

And then there is the Rupert family’s influence on Distell. If anyone understands the the benefits of product differentiation and avoiding a Big Tank syndrome, it is probably the Ruperts, whose broad holdings control many luxury brands including Cartier. They would certainly appreciate the business value of distinctive products compared with Big Tank uniformity.

Distell is a unique wine company in many ways, but I don’t see it as unique in terms of the Big Tank myth.  While I don’t deny that there are a few Big Tanks out there, in general I believe that even giant wine companies have strong business incentives to provide consumers with diverse choices (and even in some cases to take seriously the triple bottom line).

It is a sad fact that some of the great potential diversity of wine production does get filtered out by the logic of distribution and retail economics, and the vast scale and scope of the wine giants indirectly contributes to that problem. But, as I said in my last post, it takes a village to raise a child and it takes an entire supply chain to deliver diverse wine choices … or not. But it’s not just a Big Tank problem.

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I realize that one example, even a really good one like Durbanville Hills, isn’t enough to bust a myth (n=1 is a pretty small sample size). But there are lots of examples if you only take off the “Big Tank” glasses and look around.

Thanks to Cellar master Martin Moore and Managing Director Albert Gerber for taking the time to answer all my questions at Durbanville Hills and Cape Wine 2012. The images up top are from the winery’s website.

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6 responses

  1. Thank you Mike!

    I am “forty-something” that recently decided to change careers by graduating in 2011 from as a wine maker from the Elsenburg training institude in Stellenbosch. I did my first harvest at Durbanville Hills Wines in 2012, and is currently temporarily employed at the cellar. We are all in anticipation for the 2013 harvest to begin.

    Your article makes me proud as a South African and even prouder to be associated with “the Hills”!

    Regards,
    Johan Botha

    PS: We will have to organize a trip for Pinotage-hater Lettie Teague, rather sooner than later! (-:

  2. Hi Mike,

    I liked your article very much and I have some comments on it:
    1) The big tank theory is not as much of interest in the discussion of consumer real choice as it might be the degree of concentration that a given industry has in terms of % share of total supply. That is, what really matters is the monopoly power a particular winery may have in the market. and for this the only thing you can do is just to apply antitrust policies to regulate the market. Independently of the size of the operation (does size matters?), it is possile to guarantee consumer real choice by product differentiation and by the capability of a particular winery to offer a “unique” wine. You know what I mean by that! An unrepeatable wine!
    2) As respect to sustainability, I completely agree with you that it must be a multivariable concept In what I desagree is in the hieranchical order of those variables. For me the three of them have the same importance. For example, if there is not profitability we will have a beautiful environment but not productiomn at all and very high unemployment. The ssociated social unrest will do the rest to avoid sustainability.
    Cheers,

    Aldo

      • I think the philosophy behind the triple bottom line is that all three spheres have equal importance, although I appreciate that this is difficult to do in practice. Regarding monopoly power, here in the US the most significant “bottleneck” (where market power is most likely to exist) is on the distribution side rather than grape growing or wine making.

  3. Oom Tas. Well I have just bought my first bottle – one litre for the princely sum of R30-00. What can I say. It’s wet, it’s alcoholic and that’s about it. I found it thin, tasteless and almost odourless (bouquet is far to posh a word in this case). Yes, I suppose “an inexpensive, dry, golden, unsophisticated wine….” is a fair description. I await the morning after hangover with some trepidation!

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