Thursday, June 28, 2007

Michael Fridjhon on Vilafonté - A player with real potential at the top end of the market

From Business Day, 27 June 2007
The Butcher Shop’s Alan Pick has something of a reputation for worrying about margins and sales above all else. This is not entirely fair. I’ve known him for at least 20 years and if I had to name the features which have brought him his undisputed success, they would be his passion and his sense of detail. The two go together: if you don’t care enough, you can’t be bothered to focus on the small things, and if you are not constantly seeking to improve an already successful product, it gets old and stale before you realise it.

Pick was one of the guests attending the presentation by partners Zelma Long and Mike Ratcliffe of the last three vintages of the Vilafonte wines. As he left he turned to Ratcliffe and said, “I like the way you’re passionate about this”, rather than “I like the wines” or “I like the way you guys have gone about this”. It was a very telling observation, and in many ways sums up the partnership in which Ratcliffe joined Long and Phil Freese in an enterprise which aims to create a defensibly premium South African red wine.

I use the term “defensibly” for a reason: there is no shortage of wineries and brands that have been using price as a marketing strategy, working on the not wholly dangerous assumption that if the wine is expensive enough, post-purchase justification will make it taste good. In other words, it really is an intrinsic part of the Vilafonte enterprise — both as expounded (passionately) by its partners and evident in the wines — that whatever it takes to make the wine better must be incorporated in the production programme. Beyond that, you can expect all the marketing smoke-and-mirrors that come from a scion of the Cape Wine industry whose formal training finished with a wine marketing master’s degree from the University of Adelaide.

Freese is one of the world’s leading viticulturists — a man who headed Mondavi’s viticultural team at the time the Rothschild-Mondavi Opus One joint venture was established and who, for the past 10 years or so, has been a visiting consultant to many of the Cape’s leading producers. Long, his wife, was chief winemaker at Mondavi and then vice-president of Domaine Chandon in California. Ratcliffe — whose family owns Warwick in Stellenbosch — bought into the project a few years ago and has since overseen its international launch and the development of its own winery. In very little time Vilafonte has begun to prove to the wine world that it is not one of SA’s export fantasies, but a player with real potential at the top end of the market.

There are only two wines sold under the Vilafonte label. One is a Merlot-styled (and usually Merlot-dominated) blend where the label small print says “Series M” and the other is a Cabernet-structured (and thus far Cabernet-dominated) blend called — not unsurprisingly — “Series C”. The distinguishing feature of the Series M wine is that it is softer, plusher and more readily accessible — in keeping with the Merlot stereotype. In reality this is achieved as much with Malbec (which at Vilafonte seems to be performing remarkably — to judge from tank samples I have tasted from time to time). The 2003 contains 41% Merlot, the 2004 a mere 31% (but it does have 25% Malbec) and the as yet unreleased 2005 52%.

The Series C is massively weighted to Cabernet Sauvignon — as high as 82% in 2003 and down to 66% in 2005 — but it also reflects the character of a small percentage of Cabernet Franc. Unsurprisingly the whole feel of the Series C wine is one of power and intensity, layered with a range of the fruit aromatics associated with both cabernets —– blackcurrant, graphite and even the slightest herbal, almost spice-like whiff.

It goes without saying that these wines are not cheap. Some of the cost is accounted for in the intensity of effort which went into composing them, some in the prestige packaging which goes with their positioning. In the South African market they sell for R250 a bottle for the Series M and about R350 for the Series C. Relative to the US price of $50 and $70 for the two cuvees and the UK price, £35 and £50 respectively, the rand cost is not outrageous. And with a US Wine Enthusiast’s blind-tasting rating (for the Series C) as “the best Cabernet in the world”, it’s a snip next to the Chateau Latour 2003, which finished in third place.

WineNews 'Around the World Blog'

26 June 2007 by Mike Ratcliffe

The massive support in popular culture for terms like 'carbon footprint' and related language might just be the tonic that Wines of South Africa (WOSA) needs to ignite support for the ‘Variety is in our nature’ ( campaign, writes Mike Ratcliffe somewhere over the Lone Star State.

Without digging too deep, there appears at first glance to be fortuitous parallels between the biodiversity campaign and the concept of ‘carbon footprint’ in that they are both based around an eco-friendly hypothesis aimed at reducing human impact on the environment. But digging a little deeper shows that the South African campaign needs to do quite a bit of repositioning if it intends to find some sort of alignment with popular culture and the global momentum that is feeding ‘carbon footprint’ awareness.

To take a step backwards and introspectively reflect, perhaps it would be interesting to draw a parallel with the bold WIETA (Wine Industry Ethical Trade Association) initiatives that were taken by WOSA in the past few years. WIETA is an example of pro-active marketing, creative fund-raising, and is something which WOSA and South Africa can be justifiably proud of as it can lay claim to making a difference at grassroots level. But WIETA is in danger of having all its good work overshadowed by not sufficiently tapping into global popular culture.

Fairtrade is certainly the international buzzword in the ‘carbon footprint’ sense of human capital exploitation. Supermarkets will always be our major client and source of sales, and will always look at ways of tapping into popular culture. The term ‘Fairtrade’ has become part of that popular lexicon and it would seem reasonable to assume that the admirable and noble goals of WIETA, although closely associated with the Fairtrade goals, will not be recognized by supermarkets while the unstoppable consumer potential of the latter gathers momentum. A closer alignment between WIETA and Fairtrade would have been strongly beneficial to our industry. Perhaps the door is not completely closed?

On the back of this lesson, perhaps the South Africa wine industry should be exploring synergy with the ‘carbon footprint’ movement before it becomes a requirement dictated by the dominant supermarkets. TESCO has already defined the 'TESCO global footprint' and has put in place aggressive plans and timelines to start rolling back its impact on carbon emissions. The cynic in me would also hypothesize that a ‘less public’ TESCO committee would also be working behind the scenes on how to spread the cost of creating a less ‘carbon messy’ image among its innumerable suppliers. At risk of stating the obvious, it would not be prudent to fight this.

The WOSA campaign has been criticized as being confusing to the consumer and the body itself has acknowledged this feedback. The term 'eco-friendly' is now apparently the one being used in all correspondence and communication as this is more easily understood. WOSA should be complimented for its ongoing public campaign to create environmental champions of producers who dedicate vast tracks of land to the biodiversity message.

This really is a remarkable concept with tangible results and benefits, but is it being communicated to 'the public' in the most effective way? There are detailed documents backed by voluminous research detailing the message that we try to communicate – but what are people hearing? Is our message hitting the top notes of popular culture? Is the message in harmony with the swing in understanding that the ‘man on the street’ is starting to develop about the importance of the environment? Are the sound bites synergistic with the ‘carbon footprint’ movement? Should they be?

Things change quickly. The timing is going to be crucial and perhaps we should be using our good track record and relationship with TESCO to be the guinea-pig of their carbon footprint movement. Is it not plausible that South Africa be the first wine producing country in the world to create a system to measure and monitor our own carbon footprint?

It is common knowledge that New Zealand is also pursuing the ‘green’ agenda and we should not be caught napping. What if we, as an industry, were to pro-actively manage our carbon emissions and be the first to engage pro-actively with key supply chains and distribution channels?

Popular culture should not ever be underestimated. South Africa has already made admirable progress in positioning ourselves in the ‘eco-friendly’ zeitgeist space that is so important. It would not be inconceivable to now take it to the next level. If we don’t, somebody else will, and we should not be scared of ‘going big’ when it comes to the environment.

Let us not allow those cynical of marketing efforts to undermine the good intentions of our campaign.

Next instalment:

Thursday, June 21, 2007

'Around the World Blog' 22 June 2007

Mike Ratcliffe is a front man for the South African wine industry on many, well, fronts. His latest itinerary reads: Johannesburg – London - New York - Washington DC – Dallas – Houston – Chicago – Shanghai – Hong Kong – Johannesburg – Cape Town. He will regularly be touching base with WineNews's readers en route, blogging style. In this first posting Mike ponders "The 'Carbon Footprint' Tipping Point" and what it means for wine.

In a contemplative mood on an international flight en route to New York, I started considering the latest environmental catch-phrase of 'carbon footprint' which pervades daily conversations, not to mention the global wine industry's agenda.

There are many examples in popular culture when a tipping point has been reached, which has changed an obvious and logical idea into a broadly accepted fact that can drive the perceptions of an entire generation.

The discussion on global warming was partially re-ignited when terminology such as 'CFC' and 'ozone-layer' were coined, and through sustained consumer pressure this lead to the widespread withdrawal of this 'uncool' ozone gobbling propellant.

More than a decade later and after a million flight miles by Al Gore, it would appear that even the most hardened denialist agrees that the concept of global warming has at least some credibility, and that the wholesale dumping of secondhand carbon pollutants into our atmosphere is the major factor driving the artificial warming of our planet. So what does 'carbon footprint' mean? has it as follows:
Carbon footprint is a measure of the amount of carbon dioxide or CO2 emitted through the combustion of fossil fuels; in the case of an organization, business or enterprise, as part of their everyday operations; in the case of an individual or household, as part of their daily lives; or a product or commodity in reaching market. In materials, is essentially a measure of embodied energy, the result of life cycle analysis. A carbon footprint is often expressed as tons of carbon dioxide or tons of carbon emitted, usually on a yearly basis. There are many versions of calculators available for carbon footprinting.This is directly related to the amount of natural resources consumed, increasingly used or referred to as a measure of environmental impact. Carbon dioxide is recognized as a greenhouse gas, of which increasing levels in the atmosphere are linked to global warming and climate change.

'Carbon footprint' will almost certainly be the term, retrospectively, that defined the tipping point which brought climate change out of the laboratory and into popular culture. History shows that popular culture is what drives voters, gets politicians interested, and leads to meaningful change. So what should the wine industry be thinking - or rather doing - about this?
Over the past few years, Wines of South Africa (WOSA) have dedicated substantial resources to the conceptualisation, distribution and promotion of the 'Diversity Is In Our Nature' message - a campaign designed to communicate the 'eco-friendly' nature of our industry on the one hand, and to promote the massive diversity of our environment on the other hand. Critics of the WOSA campaign have been quick to slam the positioning claiming that it is irrelevant to the consumer, confusing, distorted and not easily understood by the producer community - that ultimately is funding the positioning statement through statutory levies. The wine industry has supported the campaign, but it is not uncommon to hear grumblings of discontent around the winelands' watering holes.

 I would contend that the WOSA positioning statement, subject to one or two more consumer-friendly tweaks and some wording adaptations, might be one of the more forward-thinking promotional strategies ever seen in the world of wine. Let me explain… The world changes quickly. The major forces of producer fragmentation and retail consolidation that are shaping the global wine industry are not mutually supportive. The supermarkets are becoming bigger and are getting more focused on addressing the large impact that they have on the environment. While nobody can deny the intelligence and logic expressed by the Chairman of TESCO in his recent address on environmental  awareness, some would question the rationale for this retail behemoth in placing such emphasis on the environment and in creating a plan to measure the TESCO 'footprint'. The future is being mapped out as TESCO has committed to pouring considerable funds into creating a usable and consumer-friendly methodology for accurately mapping and defining the complete 'carbon footprint' for each of the products on its shelf. South African producers dealing with TESCO should brace themselves for new packaging rules which will have them reflecting the carbon footprint of that particular wine on the packaging. Producers should also brace themselves for the additional cost of compliance as TESCO has never been shy of shifting costs onto its suppliers. It is not unreasonable to believe that TESCO will move quickly as they attempt to swiftly tap into the 'carbon footprint' wave of popular culture in an attempt to steal a march on their competitors, achieve first-mover status, gain much-needed positive PR and drive their ever burgeoning bottom-line (although analysts panned the stock this week for only growing sales by 4.7%). It is also reasonable to make the assumption that where TESCO and other global retailers lead, the world will follow; and that we are on the brink of a cultural paradigm shift where the common household starts assuming responsibility for climate change.
The power of the consumer, it seems,  is going to be unleashed once again to manipulate the full extent of the supply chain to become more efficient - and to reward those that are the most efficient at becoming more efficient. 

Note to readers: The author acknowledges the obvious contradiction in this column in that sitting on an international flight is not improving his own personal carbon footprint. No paper was, however, wasted in the writing of this column. 

On Monday: Can WOSA's biodiversity campaign play into this pop culture momentum or will it be sidelined?