The Cape wine business gets some bad financial press

There have been a number of blog articles following from a frontpage story by Stafford Thomas in the South African Financial Mail. Neil Pendock was one of the few who made positive comments re the article in his blog. He expanded on his thoughts on wine.co.za today.

The article has been on my mind for a few days and following today’s article felt compelled to put down some thoughts based on our own experience at Vrede en Lust. I bought the estate nearly 15 years ago and can relate to a lot of the comments. Been there, done that, got the T-shirt…

I think the point that many new entrants miss is quite simple: Ask most why they enter the wine business and they will tell you it is because of a ‘passion for wine’ or something like that.

The problem is that there is no shortage of wine and esp. very good wines out there. There is however a shortage of passion and the authentic stories that builds smaller brands.

There are many wine factories out there, corporate affairs focused and with economies of scale. They have the distribution, buying power and marketing budgets to flatten all. Think Distell and Two Oceans.

The only way a smaller winery, no matter how beautiful or impressive, can compete, is by being a family winery in the true sense of the word. That means you need to be involved deeply as a family, close to the customers, close to the business and with a great deal of passion. Obviously one needs to make very good wines too, but as we all know there is a lot out there!

With all respect to GT, whom I admire greatly, telling everyone that he would not do it again does not reflect an ounce of the right kind of passion. In fact the complete opposite!

Buyer of wine from smaller wineries pay more for the wine and do so mainly because what they buy is the result of personal involvement, the capacity to retell the stories learned, which differentiates the wine from the impersonal corporate product it so often is.

I am not speculating re this, from personal experience I can tell you that our wine business improved dramatically once we stepped in and really put our time and our backs into it! I took over sales and marketing 2 years ago and my wife Anneke took over all direct sales and the tasting room. Growth since then has been dramatic.

We could not do this without the excellent contribution by Susan and her wines, with the support of my brother Etienne and his teams in the vineyards. But I am sure they were also much more motivated with us fully involved and committed to the business.

One has to understand that it means weekends and holidays are prime time at the cellar door, and that it does not really help to get a PR company to write your blog, tweet for you etc. The customer experience needs to be real!

If you are not prepared to do this fully involved, then best to buy a spot with a nice view and rather spend the millions on fitting out a beautiful cellar and stock it up with the best out there…..