News
October 10, 2006
Top Australian Wine Group Yalumba Invests in The Winery
Australia’s leading family-owned winemaker The Yalumba Wine Company has bought about a fifth stake in Stellenbosch-based The Winery of Good Hope (Pty) Ltd in a strategic partnership that will enable the local producer to remain independent and financially strong while significantly expanding its production and export capabilities.
Along with the capital injection comes 157 years of Yalumba’s wine-making knowledge and worldwide distributor relationships, all driven by a synergy between the two companies that values independence, quality, innovation and long-term focus in winemaking.
Alex Dale, founder of The Winery of Good Hope, believes this is the first investment in a South African winery by any Australian wine company. A highly significant point in its own right.
Dale says new shares were issued to enable Yalumba to inject capital into the company. This makes Yalumba the third largest shareholder in The Winery, after Dale and partner Andy Openshaw.
At the 2006 Sydney International Wine Competition Yalumba was awarded the Wine Society Perpetual Trophy for The Most Successful Winery.
“Securing a business relationship with a winemaker of this calibre is a significant achievement for us,” Dale adds. “Not only is Yalumba making a financial boost to our vision, but is a global industry leader with a wealth of knowledge and global relationships which we can use to energise our growth strategy.
“As a family-owned group they value our spirit and understand the importance of letting us operate independently, rather than becoming a bolt-on member of their group. We will maintain our independence as winemakers yet have full access to their research and development skills and vineyard nursery stocks.”
Yalumba’s proprietor Robert Hill-Smith sees this South African investment as a prime opportunity to “jump aboard to help build quality and brands, and to have some fun. We share the same winemaking values as The Winery -and pride ourselves in being able to spot a good wine company when we see one!”
“We know Alex well and have watched his progress as a producer of remarkably individualistic wines. Our due diligence of the company confirmed for us that The Winery is an exciting leader in the new wave of characterful premium wines being made in South Africa. We wanted to contribute to – and share – the organic growth we expect from innovative winemaking.”
Dale says that The Winery’s exports will benefit from the distribution networks Yalumba has established in North America, Asia, the Middle East, Europe and former eastern Europe. Yet it will continue to export its premium Radford Dale, Vinum, Black Rock and Winery of Good Hope wines through specialist outlets it has established in almost 20 countries during the past six years.
Output from The Winery has increased almost 100-fold since its inception – from 550 cases in 1998 to 20 000 cases in 2003 to more than 50 000 cases of premium wine in 2007 –all destined for local and international markets. The Winery exports the majority of its production, though the demand in SA for its wines has increasingly boosted local share of its production to the point where South Africa will become the 5th biggest market for The Winery this year.
“For the past six years The Winery has worked hard and with notable success to establish upmarket, niche outlets for our wines around the world, but we do not have the equivalent resources of a group like Yalumba to invest in expanding our network. In cementing this exciting relationship with Yalumba we have dramatically broadened our horizons in terms of winemaking knowledge and innovations, as well as gaining direct access to key global markets,” says Dale.
The Yalumba Wine Company owns the brands of Yalumba, Pewsey Vale Vineyard, Nautilus Estate ( Marlborough, New Zealand), Jansz Tasmania and Oxford Landing Estate. Other activities include one of Australia’s leading specialised vineyard nursery businesses, an in house- cooperage, and more than 700 hectares of vineyards in Australia, New Zealand and California.
The founding shareholders of The Winery, who since their launch have had a philosophical aversion to indebting themselves to financial institutions, have more than tripled their investment and funding of the business during the past 36 months, before being approached by Yalumba.
“This auto-financing has assured our complete financial independence, but has not been without adventure in difficult market conditions. Bringing Yalumba on board will ease the cash-flow pressures and free us up to concentrate on making the individualistic and quality wines for which The Winery is fast becoming known,” says Dale.
During the past year The Winery has introduced two new ranges – Black Rock (white and red blends made from fruit grown in the Perdeberg), and The Winery of Good Hope (Chenin Blanc and Pinotage from the Helderberg in Stellenbosch).
Experimental wines not yet released include a cool climate Pinot Noir from Elgin, a naturally sweet Viognier from the Helderberg, and some Shiraz/Cabernet Sauvignon and Shiraz/Merlot co-fermented blends.
Dale says that The Winery’s and the Hill-Smith family’s shared belief in innovation, quality, people and private ownership, will enable The Winery to support the top-end of the market’s move away from mass-production, in search of crafted wines that reflect site, geology and the winemaker’s skill.
This partnership also sets the tone for the emergence of a significant premium South African producer, away from the incumbent ‘spirits and commodity wine-focused’ entities, hung-over from past eras.
He concludes that “the great thing about this partnership is that none of us is in a hurry. We are aiming high and that takes dedication, determination, plenty of energy and time. However, we aim to get there before we also celebrate our 157th anniversary.”
Ends
Note to Editors:
The Winery produces four distinct ranges reflecting entirely separate styles and vineyard sites. The heart of the wine-making team has created wines together in South Africa since 1998. Founder Alex Dale is British-born and French-raised, Ben Radford is Australian, Edouard Labeye is French and Heather Whitman is South African. New shareholder Robert Hill-Smith of Yalumba is also Australian.
The wines:
Radford Dale Wines are made in limited quantities to exacting standards in Stellenbosch, South Africa and Eden Valley, Australia. The range comprises Chardonnay, Riesling, Merlot, Shiraz, Shiraz/Viognier and the flagship Gravity (a Cabernet Sauvignon, Shiraz and Merlot blend). All Stellenbosch wines of origin are from vineyards on the slopes of the Helderberg. The wines retail from R85 to R200.
Black Rock, launched onto the market in April 2005, made in the Swartland from grapes grown in predominantly dryland, bushvines all on the slopes of the Perdeberg. A red blend of Shiraz, Carignan, Grenache, Mourvèdre and Viognier, and a white blend of Chenin Blanc, Chardonnay & Viognier make up this very focused and individual range. Retailing at R90.
Vinum combines quality and individualism to produce excellent value varietal wines from Stellenbosch – focusing on Cabernet Sauvignon and old bush vine Chenin Blanc. The wines retail from R50 to R60.
The Winery of Good Hope is an unpretentious, yet stylish and quality-driven range. The wines express vitality and drinkability and are from grapes grown in areas from Stellenbosch to Elgin through to the Breede River. The range comprises Chenin Blanc, Sauvignon Blanc, Chardonnay, Pinotage, Cabernet Sauvignon/Merlot and Pinot Noir. The wines generally retail from R29 to R39
Issued on behalf of:
The Winery of Good Hope, Stellenbosch
Alex Dale | 021-855-5528 | 083-453-0053 |
Issued by:
Web Words, Cape Town
Marian Shinn | 021-788-5011 | 082-831-2429 |