ENGLISH SPARKLING WINE AND CAUTIONARY CAPSTONE TALES
Part one written by Anonymous Part two written by Simon Pavitt
Owning a vineyard and making your own wine; one of the more romantic capstone dreams and one which I am sure many UNHWs have had at some point in their lives. There are so many alluring elements, from the beautiful wine estate with green vine canopies stretching into the horizon, the connection with nature and the land, the opportunity to nurture, grow and make something that is uniquely yours and of course, the joy that comes with sharing your own wine with those you love.
“The fruit of the vine gladdens the heart and surely even more so having been crafted as your own Capstone project: on your own land and with your own hands…”
But having worked with one such UHNW (let’s call him Jim) I have experienced what happens when this dream is entered into blindly, and even worse than that, with misleading information and bad advice.
Jim had bought two acres of established, productive vines in 2012 from his neighbour, which ran along the boundary of his private estate. He employed the help of contractors to manage the vineyard, harvested a good crop in 2014, sent the fruit to one of the UK’s top winemakers and three years later, had 200 cases of very drinkable sparkling wine delivered to his cellar. The process was simple, stress-free and fun.
Jim wasn’t, in fact, particularly interested in wine and didn’t drink very much at all, but he did enjoy being able to serve his own wine at dinner parties and package it up with a nice label, gifting it to friends and business colleagues. It does add a certain ‘je ne sais quoi’ when you can casually pour someone a glass of bubbles or hand over a beautiful bottle and say, “here’s one I made earlier”!
Before too long, friends and colleagues (all very well-meaning I’m sure) began ‘advising’ Jim that he should expand this hobby into a business, riding the wave of the increasingly successful English wine industry. One thing led to another and before he knew it, he had recruited a friend-of-a-friend winemaker from South Africa, moved him and his family into a cottage on his estate and his 2-acre hobby vineyard was turning into a highly ambitious commercial operation. The plan was now to expand the vineyard to 25 acres, increasing production to 100,000 bottles of sparkling wine per year as well as building a state-of-the-art winery, tasting room and restaurant. At one point there was even talk of a vinotherapy spa… In order to generate revenue to support the wine business, a distillery was installed in Jim’s barn with four potential income streams; a branded spirits line, product development consultancy, alcohol trading and production of high volume / low margin football vodka sold in Costco. And the South African was trying to run all of this on his own, in a country, culture and community that he was unfamiliar with and on a site that logistically was not able to support such a large operation. It will come as no surprise then, that
“the distillery concept failed, the winemaker was fired, and Jim was left with 40,000 litres of ethanol, £1m of duty risk and 20 acres of badly planted new vines”.
It was at this point that I was asked to take over. The forecasted success of the distillery operation had completely distorted Jim’s perception of the vineyard and wine business. There was no understanding of the capital or operational costs of this enterprise in its own right, let alone an understanding of the fact the first people to reap any financial reward from this project would be his grandchildren – if they were lucky! So, when it was all stripped back to the vines and the wine, he was looking at a completely different business proposition to when he had set out.
We worked hard over the next year to finish establishing the vineyard he had started and at the same time, build a sustainable business model - one that he personally believed in and could support. We considered splits on grape sales and wine production, building our own winery vs contract winemaking, buying a neighbouring vineyard to scale up production, and expedite sales… but in the end, the cost of making wine in any capacity was too much of a strain and a risk that he was not willing to take. And so, the vineyard – which I might add is one of the most beautiful in England – is now producing fruit to sell to the UK wine industry and hoping that it will just about wash its face.
It’s a somewhat tragic tale, but hopefully, there are lessons that can be learned by future wine producer wannabes or we might call (we made up the word): ‘Champenoiseurs’
… and Jim at least has a very, very beautiful garden.
1) Take your advice from trusted experts who understand the terroir
Good fruit is the key to good wine and no matter how experienced the winemaker, if their experience is growing fruit in sub-Saharan Africa, they won’t be the best person for the job in southwest England. It’s an extreme example but makes an important point.
2) Clarify your goals at the outset – it will impact every single thing you do
Do you simply want to make wine for your own personal enjoyment or do you want to build an empire and a legacy for generations to come? What style of wine do you like and what do you want to make? Do you want your wines to be organic or biodynamic? All of these things will influence the very first decisions that need to be made, such as what grape varietals you choose, how many vines you need and where you plant them. You know, the basics.
3) Understand the risks, accept that things will change & be prepared to dig deep
Growing grapes is farming. And farming is at the mercy of nature. It doesn’t matter how much money you throw at it, there are limits to what can be controlled. In the summer of 2018, the UK had a bumper harvest – good news one would think, but this fledgling wine industry had nowhere to store all the fruit or the wine, so millions had to quickly be invested to create capacity. There is a saying, something along the lines of, “if you want to be a millionaire take a billion dollars and buy a vineyard”…
4) Get involved
Wine is about storytelling. Consumers want to know the who, what and why behind the bottle and a contrived marketing pitch just won’t cut it in today’s world. So, make sure to be a part of that story, roll your sleeves up and get involved in every aspect you dare! You’ll get so much more joy out of it if you play an active part.
5) Buckle up - you’re in for the long haul!
A newly planted vine takes about 3-4 years to produce fruit and once that fruit is harvested, it will be another 6 months minimum to turn the grapes into a half-decent wine. So, you won’t have a bottle in your hands for the best part of 5 years, or in the case of traditional method sparkling wines, more like 6 or 7 years. Of course, you can always buy an established vineyard or indeed, if producing your own label is the main objective, buy the fruit from elsewhere. But those decisions hang on the all-important questions you will ask yourself at the beginning…
6) Passion with patience are the name of the game
Both of these are required in abundance. There is no venture better associated with the phrase ‘passion project’. You really have to love it to make it worth the money, the time and oftentimes, the heartache.
FROM CAUTIONARY TALE TO OPPORTUNITY:
IS ENGLISH SPARKLING WINE THE FUTURE?
Written by Simon Pavitt
there are 33 million wine drinkers in the UK. Sales of British wine in 2019 were 5.5m bottles. That was 70 per cent more than in 2018. It is one of the most rapidly expanding wine regions of the world. In 2018 there were 800 vineyards in England with an average of 3,579 hectares under vine. Three million new grapevines were planted in the first half of 2019 alone. Denbies Wine Estate near Dorking, Surrey has the largest vineyard in England with 265 acres under vines, representing more than 10 percent of the plantings in the whole of the United Kingdom. It has a visitors' centre that attracts around 300,000 visitors a year. Vineyards have sprung up across the South over the past 20 years, grapes also extend as far as southwest as Cornwall and North in the likes of Yorkshire. Favourite grapes planted include Chardonnay, Pinot Noir and Pinot Meunier (the classic three grape varieties for champagne) plus Bacchus, Pinot Noir, and Ortega. Albariño is also on the rise…
SPARKLING WINE PRODUCERS THAT RIVAL THE BEST IN THE WORLD
It is super-premium sparkling wine that England has really found its raison d'être. Domestic bubblies have become an increasing part of the UK’s drinking vernacular. Sparkling wine brands are now well known on wine lists and popular on the shelves of high-end retailers- wines from the likes of CHAFOR, Ridgeview, Simpsons, Gusbourne, Camel Valley and Chapel Down cultivating their unique identities and charm. Many are already seen as iconic contemporary luxury British brands.
Charlie Holland, CEO and winemaker from the Gusbourne Estate explains,
"The rise of English wine in recent years has been nothing short of stratospheric and we have now emerged as a serious contender in the world of sparkling wine. There is a growing sense of confidence amongst our winemakers as they continue to gain experience and a better understanding of how best to handle our grapes”.
Gusbourne is Britain’s third-largest wine producer by acreage under vine and has 231 acres with 57 to be planted in 2020. Revenue last year was £1.3m. Most of the UK’s winemakers at the beginning of 2020 were in investment mode, continuing are increase infrastructure on-site- building assets from restaurants to visitor centres, improving to start of the art winemaking machinery. Gusbourne for example had attracted high profile investors such as Lord Ashcroft, former deputy chairman of the Conservative Party owns 72%.
THE CHALLENGER TO CHAMPAGNE?
English Sparkling wine has Peter Hall, the winemaker of East Sussex’s Breaky Bottom to thank. In 1974 Peter planted his first experimental vines, ignoring advice on what would work on the very basic farm. Peter nurtured the vineyard to maturity, nearly 50 years later his sparkling wines receive worldwide acclaim.
It is thought, due to global warming, southern England now has a climate similar to Northern France, wet and moist during the spring and hot in the summer. It is still a cooler climate so English wines can be very crisp, clear and have wonderful acidity. The English vineyards benefit from longer growing seasons.
Even the Champenois have seen the potential future disruption by the Brits and got in on the action, proof of English sparkling’s potential. Champagne houses such as Taittinger, the French champagne producer, now makes sparkling wine in Kent. Pommery is making English sparkling wine, with a 40-hectare site in Hampshire expected to produce its first harvest in 2021.
The British super premiums have not been scared to go head to head with the top champagnes on price. Adopting Méthode Traditionelle and creating complex Cuvee: the Nyetimber’s Prestige Cuvée 1086 retailed at £150 and £175 for the white and rosé versions respectively, Chapel Down’s released Kit’s Coty Coeur de Cuvée 2013, which at £99.99 was ranked England’s most expensive wine when it was released in 2017.
‘PERFECTLY BRITISH’ AND AT THE FOREFRONT OF ESW: NYETIMBER
“If one could imagine the world of sparkling wine as an orchestra, then English sparkling wine would be more like the violin and viola, whereas Champagne would be cello and bass” Nyetimber Winemaker Brad Greatrix
The English sparkling wine industry ‘Don’ is the Nyetimber Estate. For over 25 years Nyetimber has had a single aim: to make the finest English sparkling wine, one to rival the very best in the world, including Champagne. A true pioneer, Nyetimber was the first producer of English sparkling wine to exclusively grow the three celebrated grape varieties: Pinot Noir, Pinot Meunier and Chardonnay.
It was 1988 when the holy trinity of sparkling wine grapes found their new home in the lee of the South Downs, West Chiltington, West Sussex. But it was 2006 that was the real acceleration of the Nyetimber estate.
Eric Heerema became the Owner and Custodian of Nyetimber in 2006, believing that the estate, with its ideal soil and location, had yet to achieve its full potential. Eric recruited Head Winemaker Cherie Spriggs and Winemaker Brad Greatrix, who both shared his vision of crafting the finest English sparkling wines. And since then, Nyetimber wines have gone on to achieve global acclaim, winning international awards and blind-tasting competitions, as well as being recognised by some of the world’s most celebrated wine experts.
Nyetimber produces between 500,000 and one million bottles of traditional method sparkling wines each year. Nyetimber’s vineyards are now spread across Sussex, Hampshire, and Kent.
Born into a Dutch family, Eric Heerema fortune stemmed from Heerema Marine Contractors, a shipping business built up by his father. Born in 1960, it wasn’t until he was 45 that Eric made his first discovery of the English wine industry:
“I became passionate about wine when I was 17. I loved the taste, the range. The differences in flavour triggered my interest, but so did the story of how it was made, so I started reading about it,” he recalls. “I always hoped that one day I’d become a wine producer” although he always thought he would have vineyards in France or Italy.
In 2003 Heerema had his first taste of English sparkling. Moving to the UK, he bought a farmhouse in West Sussex. The location was chosen because of his love for classic cars… He wanted to be near Goodwood, the Sussex estate famed for motorsports. Eric has owned and raced some seriously valuable classics, including a Ferrari 250 GTO that made US$35m (£27.8m) when he sold it in 2012 (creating a new record as the world’s most expensive car).
Hareema sold his stake in the family business, giving him a net worth of more than £100m, according to Forbes. He refocused to become full-time CEO of Nyetimber – a sure sign he sees a huge potential in English fine wine.
THE BRITISH SUMMER SEASON AND ENGLISH SPARKLING WINE
“From the Grand National to the Boat Race, how English fizz is taking over champagne as the toast to the season” The Telegraph 2019
2019 saw a big push from Nyetimber to put itself at the heart of British cultural life through sponsorships and partnerships through the British Summer Season. Nyetimber announced it will be the exclusive English sparkling wine partner to British tennis – being served at Queens, Nottingham Open, Birmingham and Eastbourne. This added to their existing portfolio of partnerships with Hurlingham, Monaco Grand Prix, Badminton, Cheltenham Gold Cup, British Polo, Glyndebourne, and the Dorset Seafood Festival.
As Nyetimber are the leaders in the category and have had cash flow for several years, it is inevitable others will follow suit. It’s fantastic for the event owners that have found a new category to sell sponsorship inventory to…
This is a category that could sit alongside other drinks like official beer, official gin etc. Even could sit alongside official champagne as a non-competing category to make exclusive for a premium. This is a tactic that has served well for the likes of Verve Clicquot that have their iconic Verve yellow champagne bars at Lord’s, Cowdrey Park polo, sailing, and golf as well as iconic hotels and spas.
You just have to look at the success of premium mixer Fever-Tree which has also focused on the British Season for partnerships… title sponsor of The Queens Tennis for example (a great fit by the way- great idea to put yourself firmly top of mind of the British socialites at the start of summer as their mixer of choice for the G&Ts). Fever-Tree has reached a valuation high of $4.5bn in recent years.
It’s worth taking note if you have a strong brand and want to accelerate your growth if done correctly, sponsorships and partnerships are a great way to:
1) Drive brand exposure and awareness through official partnerships (logo visibility making it more and more familiar to the target audience)
2) Aligning the brand with like-minded others i.e. luxury brands and experiences that are also sponsors or partners
3) Drive sales- being the exclusive sparkling wine at an event guarantees your products are on sale in the bars and the caterers have to use you for hospitality
4) Drive trialling- whether that’s free giveaway samples or by default, people will buy your product if it’s the only choice
5) Engage target audience: Both UK affluents but also global glitterati and corporate c-suites
6) Provide a PR platform to create additional stories and experiences for social media etc
7) Exclusive experiences to customers (trade and consumer)
We were already seeing the followers- for example Coates & Seely have signed an exclusive agreement with the Jockey Club to be served at 14 of their 15 racecourses and that includes Aintree and the Grand National event. Chapel Down sponsored the Boat Race.
THE NEWCOMER: HARROW & HOPE
It has been interesting to see the wine industry shift its attention to the UK, with many seeing an investment opportunity. Pioneers of the UK wine industry have been in strong demand as others look to build ventures this side of the Channel not France or other leading vine countries in Europe.
One that has caught our eye is Harrow & Hope. A family wine estate in rural Buckinghamshire, the flint laden slopes of Marlow to be exact. The vineyard has been seven years in the making. The couple behind the venture are Henry and Kaye Laithwaite. Immediately you will recognise the surname. Henry is the son of Tony Laithwaite, the founder of successful wine merchant group Laithwaite’s. The couple have already received help from industry pioneers Mike Roberts OBE and his family Tamara and Simon from Ridgeview. Dr Tony Jordan, the Australian sparkling pioneer also chipping in with advice. The couple always wanted a vineyard in the Chilterns and were thrilled to find 6.4 hectares with chalk and flint earth – ideal for growing vines.
The approach is traditional, no herbicides in order to build and maintain healthy soil. They are growing classic three grape varieties for sparkling wine across the site, fermenting separately in small batches, which gives them more choice and flexibility when it comes to blending the final wines. They plan on having a constant supply of the non-vintage Brut Reserve, and a Vintage Brut Rosé. Their patience is paying off, winning UK Winery of the Year 2019.
“I am astounded by the quality Henry has achieved from such young vines. The future of Harrow & Hope looks bright.” Dr Tony Jordan
A REMINDER BACK TO WHY OVERALL THIS IS A CAUTIONARY TALE
This is written during the time of COVID-19 lockdown. The hospitality industry has seen revenues fall off a cliff, for many to literally zero for three months now. Based on all that we have written about, here are some areas to keep an eye on in the near future:
1) EXPORTS
Whilst the ESW industry was not reliant by any means on exporting, there will be a significant hit. Ninety percent of Nyetimber’s product remains in the UK, with the remainder going into the small but growing export market (to the likes of the US and Japan). 25% of Gusbourne revenues were from exports (up 14% from the year before) and were exporting to 16 countries pre-COVID.
2) SWITCH TO SUPPORTING HOMEGROWN
This could be a good opportunity for British winegrowers. Brits with Brexit looming and COVID getting everyone to pull together and support local, we may see a renewed support for wanting to support more British produce and English Sparkling Wine. This was signalled at the ‘lower-end’ by Wetherspoons pro-Brexit founder and chairman Tim Martin when he began to remove European beer and wine from the pub chain and signing a contract with Denbies for supply.
3) THE RESTAURANT AND HOTEL RECOVERY
According to Gusbourne, most of their wines are sold in the UK, mainly at high-end restaurants and hotels. It is hard to predict just how many restaurants will reopen post-COVID. For many cash flow is a huge struggle. For many of the wineries in the UK, they will be needing the on-trade to kick back in as quickly as possible
4) NO BRITISH SUMMER SEASON
With all major sporting and cultural events all but cancelled for 2020, those wineries that had set aside allocations to supply the thirsty summer season drinkers will now be left with extra stock and fewer opportunities to build their brands. A move to direct to consumer for many will have been the obvious pivot during this time. People will be drinking much more at home that’s for sure. One hopes the agile and smart wineries will have sorted their distribution to deliver via merchants, supermarkets or direct to consumer… But surely huge sales will be lost due to the cancelling of all things on the calendar this summer not to mention the organised tours of wineries that also help drive brand engagement and sales.
5) OVER-EXTENDING THE AMBITION AND INVESTMENT
With many of the vineyards in an arms race to buy land and plant grapes, as well as have the assets to diversify revenues (visitor centre, restaurant etc), one hopes there was some savings left for times such challenging times as these. For those that took financial risks to extend themselves in the pursuit of faster growth may well be up against it currently.
6) OVER-EXTENDING THE BRAND
Chapel Down had seen fantastic growth and their on-site restaurant and tours are great (I have had first-hand experience). Chapel Down diversified into Gin and beer. A good move one hopes to move away from being reliant on just wine. Creating, for example, the Chapel Down Bacchus and Pinor Noir Gins. In 2019 they also tried to create the Chapel Down experience away from Tenterden. They created the Gin Works, a bar in Kings Cross London, opening in January 2019. Less than a year later they were forced to close the venture.
Frazer Thompson, chief executive of Chapel Down, told The Evening Standard that the bar had struggled to generate enough footfall.
He said: “Although we got great reviews and gave customers a terrific experience, we couldn’t get the scale of traffic we needed to make it profitable”
7) IT’S AGRICULTURE AFTER ALL
Winemakers are heavily exposed to the challenges of agriculture (and for many monocultures). From fires to frost… Harrow & Hope experienced the latest spring frost this year. A reminder that winemaking is precarious and stressful to say the least. Harrow & Hope were impressively pro-active, setting up 1500 barrels of fires, lighting over 1100 overnight around the estate in May 2020 for frost protection. It made for a great Instagram drone video but I am sure they would have preferred no frost or threat to the vines…
2016 was a bad year for the vineyard as the estate lost 65% of its crops due to frost. It’s meant reserve wines have been particularly important to Harrow & Hope. Then in the heatwave of July 2018, they had another scare… a fire across the road led to 23 fire engines being called. Luckily the fire got to within five metres of the crop but didn’t catch, just a nearby hedgerow being destroyed…
It’s a reminder that it is one of the most rewarding Capstone Projects possible. But one must approach with eyes wide open… ! There is no doubt one needs a bit of luck with these projects. But luck comes to those who work hard…
TO READ ABOUT FUTURE TECHNOLOGY IN WINE CLICK HERE
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