A crowning achievement: Jim Thompson

For all his success, Jim Thompson has face myriad obstacles since starting Crown Wine Cellars 12 years ago. The charismatic founder of global logistics company Crown Worldwide tells Lucy Jenkins how the company navigated a capricious Hong Kong wine scene to become the country’s leading wine cellaring facility.

Even as recently as 15 years ago, Hong Kong’s nascent wine collectors had little opportunity to store their wine anywhere in the SARS region. The tendency was to store them in bond in England and keep a few bottles for immediate consumption.

Then, thanks to a business delegation trip to South Africa in the early 2000s with Hong Kong’s then financial secretary, Donald Tsang, the subject of Hong Kong’s growing wine industry came up in a discussion between Jim Thompson and South African diplomat Greg De ‘Eb.

“Why isn’t Hong Kong more of a wine city?” Thompson remembers asking at the time. “Simple,” De ‘Eb replied. “There was nowhere to store wine securely and properly, and it prevented people from amassing any great collections which they could keep.”

After they returned to Hong Kong, Thompson and De ‘Eb put their heads together. “I always knew I wanted to branch out into storing wine as an offshoot from Crown Worldwide, and Greg didn’t want to go back to South Africa, so we called upon our governmental contacts to show us some potential sites,” says Thompson.

The initial forays were painstakingly slow. The only sites deemed big enough to house extensive wine collections were in bad states of repair. Then Thompson and De ‘Eb stumbled upon some former military bunkers, used as ammunition and weapons dumps in World War Two, which were nestled deep in the hillside in Shouson Hill.

“Even then it took some imagination to envision what it could look like!” laughs Thompson as he recalls hacking his way through the undergrowth to get to the bunkers, where they discovered an “itinerant” ensconced inside with a tent.

The four bunkers, each containing two rooms of 800 square feet, were duly chosen and in August 2003 Thompson, by his own admission, “poured money” into the project. It received no financial backing from the government, though it did approve the modifications he and De ‘Eb had to put in place, such as the climate control systems, while preserving the site’s fragile heritage.

Gaining customers was the next major hurdle. “We knew the service was badly needed. People did have wine collections but were very hesitant about storing them in ‘the tropics’. I really don’t think they trusted in us at all initially.

“It became more and more expensive the more we continued. I must have put in about HK$15 million (£1.3 million) from Crown Worldwide and I was thinking if the government placed any more restrictions on us, which they were starting to do, then we would have to stop.”

Turning points

Over two to three years of that crucial first phase Thompson began amassing a list of customers who liked the relatively central location of Crown Wine Cellars and approved of the opening of Crown Wine Cellar’s fine dining restaurant in 2004. Slowly, they began to ship their wines back from the UK using Thompson’s globally respected logistics arm of Crown Worldwide.

Crown Wine Cellars was also awarded the status as a UNESCO Asia Pacific World Heritage site in 2007 in recognition of the careful restorations made in sympathy with the existing materials, which Thompson notes was a “great milestone in our achievement”.

However, it was the abolition of alcohol tax in 2008 which became the game changer for Crown Wine Cellars and Hong Kong’s wine industry. “Suddenly, the spotlight shone on Hong Kong,” explains Thompson.

“Consumers [and] wine merchants sat up and knew it was an irrevocable change in Hong Kong’s wine landscape. Two of Crown Wine Cellar’s bunkers were bonded, so the absence of tax was as if prisoners had been released.”

Celebrated winemakers came to Hong Kong, basking in the glow of Hong Kong’s sudden infatuation with Bordeaux. Quickly, Crown Wine Cellars became known as the destination for lavish entertaining.

“This was a defining moment for me, when I realised just how popular collecting had become,” says Thompson. “I remember asking a prominent Bordelais winemaker how often they met with each other and he responded that they saw each other most often in Hong Kong! People just jumped on the bandwagon and we welcomed their collections, of course, but there was a point when I saw how much people were paying for cases and thought to myself, ‘Is this real?’”
Filled to capacity of around 180,000 bottles in Shouson Hill, Thompson then sought a larger location in Tuen Muen in the New Territories, one which can hold roughly 800,000 bottles.
Other major players caught up in Hong Kong’s wine boom, such as merchants and auctioneers, also housed their collections with Crown. Thompson was happy to oblige, though he did turn down requests to represent winemakers in a merchant capacity.

“I am very glad we did not go down that route,” he says. “The market is now over-saturated. Of course, there are some very successful merchants who have risen to the top, but we’ve retained our brand purely as storage and cellaring. From time to time, there may be customers who want to sell privately via our website, which we help them out with.”

One might think that Hong Kong’s embarrassing brushes with counterfeit products could be a legitimate reason to reintroduce an alcohol tax. Yet this suggestion is met with incredulity from Thompson.

“Where is the incentive to do that?” he says. “The government has budget surpluses every year and the [tax abolition] has created many jobs in different industries besides. I can’t imagine the people I know at a certain level ever reintroducing it and it would never be used to regulate the industry against counterfeit products. The biggest fakes are in the US anyway, not here,” he finishes adamantly.

However, one change the government has brought about that has benefited Thompson and Hong Kong’s other wine cellars is a new set of standards for storage facilities, introduced in 2008. Setting clear guidelines on security, and the temperature and condition the wine is kept in, it was welcomed by Thompson, who regards his industry as “self-policing”.

“We have to offer a perfect deal. For customers wanting to ship wine from the UK to Hong Kong, for example, Crown Wine Cellars through Crown Worldwide is able to promise a chilled passage in a container so they reach Hong Kong in mint condition. More people want to build collections for prestige, investment or for pure enjoyment. I like to see it increase for them. It’s a nice nest egg.”

A Bordeaux man

For all his amassed wealth, which currently stands to over US$1.2bn (£783m) according to Forbes and a ranking in Hong Kong’s 50 wealthiest people, Thompson himself is modest: “I never hold myself out to be a wine expert – but I know what I like: red Bordeaux.

He adds: “When it came to Crown Wine Cellars, the interest was already there with helping other people ship their beloved wine around the world, and besides, I wanted to have fun later on in life. I was learning from our customers, and our circle of winemakers led me to develop my own interest and collection, and appreciate the differences in wine.”

His all-time favourite is Lynch-Bages, followed by white Burgundy, though he admits to a “glass or two” of New Zealand Villa Maria Sauvignon Blanc sometimes, when he’s at home after work.

He has purchased a Georgian estate in Waterford, Ireland, which he has spent the last three years renovating into a pristine haven where he can relax and enjoy life outside of Hong Kong.

“If there’s one thing I’ve learnt over the years,” he says seriously, “it is that you really don’t need expensive wine to enjoy yourself. A friend of mine had his 50th birthday and we duly opened a bottle in his vintage and it was simply dreadful.

A cheaper bottle in the Italian sun will taste so much nicer and wine also depends on your state of being for your overall enjoyment.”

The development of Crown Wine Cellars was for him one such “pure enjoyment”, he reflects. But drily he notes that this is the main part of his business which people ask him about – without taking into account the years of hard graft that went behind it.

“I started Crown Logistics 50 years ago in Japan. Removals, warehousing – I spent my whole life building this up, but people so rarely ask me about it because that doesn’t ignite their interest in the way that the cellars do.

“In 1990 Crown Logistics became a global company, which was another step forward for me because it took me right out of my comfort zone in Asia and, of course, it enabled me to start Crown Wine Cellars.”

When asked about what he sees for the future of Crown Wine Cellars in Hong Kong and beyond, Thompson is again quietly confident: “It will be great to take this model and transplant it in other Asian countries and around the world. The demand for quality wine storage for collectors will always be there. For me though, it’s all about continuing at a nice easy pace.”