One of the issues I wanted to explore during my visit to South Africa was the nature of international investment, partnerships and strategic alliances in that country. There is so much about South African wine that is very old and traditional that I wondered how it was dealing with the new and global. Here’s some of what I found out.
[This is part of a series of posts reflecting on my recent visit to South Africa. Click here to see all the posts in this series.]
The International Connection
I am interested in international economic connections in particular because they have proved to be so important elsewhere in the Southern Hemisphere wine world. The modern wine boom in New Zealand really took off when the international wine trade was opened up, for example, along with opportunities for inward investment. Now the export-focused NZ wine business is largely foreign owned, part of the Faustian bargain that generated New Zealand’s great success.
International investment, partnerships and strategic alliances have been important in Argentina, too, with European, American and Chilean relationships exerting strong influence. Chile and Australia also have important stories to tell in this regard, too, but as they say on Facebook “it’s complicated” for these two countries — too complicated to be included here.
The Screaming Eagle Connection
What’s the story in South Africa, I wondered as I walked into CapeWine 2012? I didn’t have to wait long to find out. The opening general session featured remarks by Charles Banks, former managing partner of California cult winery Screaming Eagle, and Troy Christensen, CEO of Accolade Wines, which is the phoenix that has risen from the ashes left behind when Constellation Brands offloaded their wine assets in Australia and Europe. Banks and Christensen were seen as leading indicators of international interest in the South African wine industry.
Banks received special attention, which probably isn’t surprising given his Screaming Eagle background. He is CEO of Terroir Capital, an investment group whose international holdings now include Mulderbosch Vineyard and Fable Wines in South Africa. He is very positive about South Africa’s wine future and obviously purchased assets there with an eye towards taking them to the next level.
Mulderbosch was already a global brand, he told the international audience, and he saw potential to increase quality and expand scale. With Fable Wines Banks intends to take a highly-regarded existing South African winery (Tulbagh Mountain Vineyard) and rename (to make it more pronounceable, Banks said), rebrand and re-position it in international markets. The focus is on old bush vine Chenin Blanc and red Rhone varietal wines.
So clearly South Africa is on the wine investment radar, I concluded, despite what American investor Bill Foley told Lettie Teague in a recent Wall Street Journal article. But how deep does the interest go?
A Half Dozen Answers
I got my answer and more at a seminar the next day that was organized and led by Mike Ratcliffe, the managing director of Warwick Wine Estate. Mike wanted to showcase international investment in the South African industry and he decided to do it through a tasting of the six wines shown in the photo at the top of this post and listed below. Each wine had a different international story to tell and together I think they give an idea of the variety of actors, interests and motivation.
| # | Wine & Vintage | |
| 1 | Waterkloof Circle of Life White | 2011 |
| 2 | Delaire Graff Botmaskop | 2009 |
| 3 | Glenelley Lady May | 2009 |
| 4 | Anwilka | 2008 |
| 5 | Fable Bobbejaan | 2010 |
| 6 | Vilafonte Series M | 2009 |
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Waterkloof Wines is the creation of UK wine executive Paul Boutinot, whose title is listed as “Custodian” on the website, which suggests that he is in this for the long run. Boutinot, his UK business, is an ambitious and successful enterprise that produces, imports and sells wine; it was named Sommelier Wine Awards “Wine Merchant of the Year” four years in a row. The South African winery is a personal investment that reflects Boutinot’s passion for wine and sincere interest in terroir. I expect it will also benefit from his business background and distribution experience.
Delaire Graff Estate is the project of Englishman Laurence Graff, Chairman of Graff Diamonds International and I think you can see the luxury lifestyle influence in the video and on the website. The intention was to create more than a winery — Delaire is a destination resort that includes the winery of course, but also luxury lodges, a “destination Spa,” and two restaurants in an atmosphere filled with art and natural beauty.
Madame May de Lencqauesaing is the proprietor of Glenelley Estate and you are correct if you guess that she is French. She was born in Bordeaux and managed her family estate Chateau Pichon Longueville Comtesse de Lalande until its sale to the Roederer Champagne house in 2007. Since then she’s focused on her South African estate, which makes “South African wine with a French Touch” according to the website.
Anwilka is a multinational partnership between South Africa’s Lowell Jooste of Klein Constantia, Hubert de Bouard, co-owner of Chateau Angelus in Bordeaux and Bruno Prats, former owner of another Bordeaux property, Chateau Clos d’Estournel. The bulk of Anwilka’s production of its Syrah-Cab-Merlot blend is exported, according to a Wine Advocate note, and sold through the Bordeaux marketplace.
The fifth wine was the Bobbejaan from Fable Wines , which I’ve already discussed. It added an American name to the mix and was the perfect prelude to the final glass.
Mike Ratcliffe saved his own project for the last act, but it was worth waiting for. Vilafonté is an ambitious collaboration between South Africa, represented by Ratcliffe, and America in the form of head winemaker Zelma Long and head winegrower Dr. Phillip Freese. Long is legendary in California for her work at Robert Mondavi, Simi and her own family winery, Long Vineyards. Freese was head of winegrowing for Mondavi for 13 years and designed the first Opus One vineyards. He has consulted with several South African wineries including Warwick. Like the other wines in the tasting, Vilafonté was a South African wine made to international standards and positioned for export.
These wines will be good ambassadors for South Africa, I believe, and represent intelligent (and generally delicious) international initiatives and collaborations. Each international investment brings something useful to the South African wine table while highlighting the best of what’s already here.
I know that there are other international investments in South Africa (Donald Hess’s investment in Glen Carlou springs to mind) and I know that all of them have not worked out as well as the ones showcased here (I won’t name names). It’s too soon to tell how the story will turn out in the end, but on balance it seems to be a healthy collaboration so far.
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This is the last post in my series on South African wine, but look for the topic to come up again in other contexts. Thanks to Mike Ratcliffe for organizing the seminar and encouraging me to attend.
I hope you don’t mind the videos that I’ve inserted in the post. I found them on YouTube and I think they add something to the story.