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Thursday 27 November 2014

Angove sets out Australia’s route forward

31st March, 2014 by Gabriel Stone

Australia’s medium-sized family wine businesses are vital for reinvigorating the country’s export momentum, believes John Angove, managing director of South Australian producer Angove Family Winemakers.

John Angove, managing director of Angove Family Winemakers

John Angove, managing director of Angove Family Winemakers

Speaking to the drinks business, Angove acknowledged recent troubled reports from major brand owners such as Treasury Wine Estates and Yellow Tail’s Casella Wines as he remarked: “The big companies – I don’t know what they’re doing.”

Last year saw Australia’s global wine volume exports shrink by 6%, with Wine Australia’s chief executive Andreas Clark admitting that conditions for exporters were “challenging”.

Against this backdrop, Angove observed: “One of the key issues in the Australian wine industry at the moment is that it’s the mid-sized family owned companies who are keeping the industry going.”

Explaining the advantage of a family business over those under pressure from external shareholders, Angove stressed the need for “patient capital”.

“You’re not going to see a return every year,” he told the drinks business. “You’re dealing with all the vagaries of growing grapes, an incredibly high capital intensity for a facility you use once a year and an historically low return business. We’ve built a capital base over years and years; if you tried to build that today you wouldn’t want to make any mistakes.”

Despite the recent decline in Australia’s exports, Angove pointed to signs of a steady improvement in the country’s fortunes. “We see the dial beginning to turn with a greater acceptance of Australian wine,” he reported. “Australia dropped the ball a bit. 10-15 years ago Australian winemakers used to travel the world but that slowed right down – and people are wondering why sales have fallen back!”

As for the factors underpinning Australia’s steady revival, Angove suggested: “The dollar coming down is certainly a factor, but there’s also an enthusiasm and awakening from winemakers.”

Pointing to “a rationalisation of distribution channels, which had become so clogged up,” Angove observed: “there’s sense in the market that we are beginning to see openings where before the door was shut.”

Among recent indications of this change was at last week’s Prowein, where, he reported, “we saw a greater interest than I might have anticipated” from markets as diverse as Poland, the UK and the US. China also remains a growing source of business for a number of Australian brands, including Angove.

Turning to his own family’s wine business, Angove highlighted the major turning point of 2008, when the company took its biggest step back into the high end wine business since the Australian government’s compulsory purchase of its historic Tea Tree Gully vineyards in the late 1970s, which were incorporated into Adelaide’s urban sprawl.

“Ever since then we’ve always had a desire to re-establish our premium vineyards,” said Angove, an ambition which began to be realised in 2008, when the company bought 30 acres of “very historical” vineyard in the Seaview sub-region of McLaren Vale.

Warboys Vineyard

Warboys Vineyard

Previously called Manning Park, the vineyard’s former owners kept the rights to this name so Angove renamed the site Warboys in tribute to one of the first Tea Tree Gully vineyards that supplied fruit to its founder Dr William Thomas Angove.

“It’s a very, very important part of our way forward,” Angove said of the Warboys purchase, which included Shiraz and Grenache vines aged up to around 80 years old. “It has always been a premium vineyard, but the people we bought it from were really moving towards more commercial McLaren Vale. We’re working quite hard at taking it back in the super-premium direction.”

Having already started buying fruit from McLaren Vale in 2002, this new acquisition allowed Angove to introduce a number of new, upmarket wines to its portfolio. These included the Warboys Single Vineyard three-strong range of Grenache, Shiraz and a blend of these two varieties, all produced entirely from the Warboys vineyard.

Another important arrival was The Medhyk, Angove’s AU$65 flagship wine, which saw its first vintage in 2008. Named after the Cornish word for “Doctor” in tribute the Angove family’s origins, this 100% Shiraz uses not only Warboys grapes but the best quality grapes from older vines that the company is able to source across McLaren Vale.

Angoves' flagship The Medhyk

Angoves’ flagship The Medhyk

Although quantities of both the Warboys wines and The Medhyk are small, with the latter averaging 5,400 bottles per vintage, of which just 20 six-packs allocated to Europe, they play an important ambassadorial role for the company. “It’s more for getting people to trust the wine and say ‘wow, Angove has changed’,” explained regional export manager Jonathan O’Neill.

The last three or four years have also seen the addition of the upper tier Angove Family Crest range as well as the introduction of Alternatus, a collection of “alternative varieties or winemaking processes” that was developed primarily by John’s winemaker son Richard and currently features Fiano, Vermentino, Grenache and Tempranillo.

“We really think Grenache is exciting in McLaren Vale,” enthused Angove. “It’s really had a renaissance in the last five or six years.”  For all the company’s work to offer alternative varieties, O’Neill confirmed: “The focus at Angove is on Shiraz and Grenache, the traditional styles of McLaren Vale, and that’s where the growth is coming from.”

Richard was also responsible for the creation of Cross Stitch, a blend of McLaren Vale Shiraz and Coonawarra Cabernet Sauvignon, as well as the “quirky” collection of wines sourced from around Australia under the Whiz Bang label.

With Angove’s daughter Victoria also actively involved in the business, he confirmed: “I’m looking to step back a bit,” although stressed there was “no precise timeframe in mind.”

Looking back on his achievements since taking over the helm from his father in 1983, Angove picked out the move into McLaren Vale as his “second biggest” contribution to the company’s future.

Ahead of this he cited his earlier work to establish a nationwide distribution system for its wines. Angove has also overseen the development of Angove’s winery “from a 1940s system to what it is today.”

His contribution to the country’s wine industry has already received considerable recognition, most notably in the form of Angove’s appointment as member of the Order of Australia. He has also been on the board of a number of the country’s major wine organisations, including the Australian Wine Research Institute.

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