Hidden Giants

Villa Maria, one of New Zealand’s biggest producers is to change ownership. Robert Joseph considers the importance of knowing a little more about the important players in the shadows of the wine industry.

Robert Joseph thinks about little known big wine producers
Robert Joseph thinks about little known big wine producers

Indevin, Austwine, Origin…

How many of these names ring a bell with you?

Compared to, say, Villa Maria, Yalumba or Vergelegen?

The one thing those less familiar names have in common is that they are in the business of supplying huge volumes of wine – from New Zealand, Australia and South Africa respectively – for major retailers across the world. Unlike the second group, their names rarely appear on labels and they are almost never mentioned by wine writers.

Until moments like this week when it was announced that Indevin Group is to acquire Villa Maria out of receivership.

Now, before going any further  and to avoid any confusion, I should make it clear that the Villa Maria wine brand has been trading profitably. It is FFWL Ltd, the business that owns Villa Maria Estate, that hit financial difficulties in the shape of the NZ$212m it owed to New Zealand banks.

Innovative business

I’ve been a fan of Villa Maria since I met its owner, George Fistonich in 1985 at a time when he had also sailed into financially choppy waters while conducting a fierce price war with bigger competitors. Since launching his business at the age of 22, with wine made from a leased half-hectare of vines near Auckland, Fistonich has been a brave and pioneering businessman, building up one of the world’s best known and most widely respected brands for the consistency of its quality, while pioneering screwcaps and sustainable production. His efforts on behalf of New Zealand wine earned him the award of New Zealander of the Year and, in 2009, a knighthood from the Queen Elizabeth II.

This, and a lot more information about Villa Maria is available to anyone with access to Google or old copies of any wine magazine. But what about Indevin Group? Launched in 2003 by former aquaculturist Duncan McFarlane, the Marlborough-based company has quietly grown to become the biggest producer in New Zealand with 3,000 ha of its own and contracted vineyards across the country and wineries in Marlborough, Hawke’s Bay and Gisbourne.

While its focus is on private label wines, Indevin also supplies wine to other New Zealand wineries for sale under their brands.

AustWine, McGregor and Origin offer similar services, as do a long list of cooperatives in Europe whose names are also little-known by anyone outside a limited number of wine professionals. 

So, why does this matter? Surely, what is important are the brands and labels that the critics can talk about and recommend, and the producers that generate the ’stories’ with which wine magazines and columns are filled. Does anyone really need to know which Champagne houses or Bordeaux chateaux belong to LVMH, for example? Do fans of Penfolds wines need to be aware of Treasury Wine Estates? Any more than South African wine lovers might benefit from knowing that Ken Forester was bought by the southern French giant Advini in 2016. 

Maybe the wine drinkers don’t, but anyone with more than a passing interest in the business of wine should take an interest in the powers behind the visible thrones. Especially anyone who remembers what happened to Australian wine industry when Southcorp the giant owner of Penfolds, Lindemans, Wolf Blass and a raft of other brands went through a reverse takeover by Rosemount that led to a complete restructuring of its US distribution. The chaos that ensued opened the way for Yellow Tail and arguably the subsequent collapse of the Australian wine market in that part of the world.

Changing strategies?

Villa Maria has excellent distribution networks and no one is suggesting that Indevin would repeat Southcorp’s errors , but it might apply a different business strategy to its newly-acquired brand. Will the UK, historically its major market, get more or less attention? Might there be range reviews? Might it develop the associated labels, Esk Valley, Vidal and Leftfield that come as part of the deal.

Constellation, one of the biggest corporations in our industry only ranks at 359 on the 2021 Fortune 500 – down from 358 in 2020, and two below the US logistics business Ryder – and owes that position to the considerable income it gets from spirits and beers. It appears on the list beneath a long list of companies like Ryder whose names will, I’m sure, ring few bells with anyone reading these words. We don’t need to learn about those businesses, but maybe we should all at least pay a little more attention to the big players in the background of the wine industry – the enterprises without whom the supermarkets where most people buy their wine would have far emptier shelves.

Robert Joseph

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