If You Can't Fix It
Flog It Rename It
Strangle It; Run!!
by PHILIP WHITE
It’s a chill bright sunshine-cum-grey squally sort of day in the Barossa, and I look out the window at the pruners in their wet weather gear, giving the precious Greenock Creek Cabernet its annual haircut.
Somewhere a long way off in a shiny office away up in the air sits Troy Christensen (below, left), the CEO of what was the Australian branch of Constellation, the biggest wine company on Earth. It had been called Hardy-BRL before that, and Hardy Reynella before that and just plain old Hardy’s Wines before even that.
On the 27th June it suddenly became Accolade Wines. Accolade comes from the French accoler, which came in turn from the from the Vulgar Latin accollare, which means to hug around the neck; the collar. I presume the Flash Harry genius who came up with this name was hoping to win the sort of instant acceptance somebody imagined Fosters had won when it called its vast wine business Treasury.
There is absolutely no connection between these besuited sophists and those hardened pruners outside in the winter. Somebody appears to have forgotten what this business is all about.
The name change came about after Constellation Brands Incorporated sold 80% of its Australian wine business to a mob called CHAMP Private Equity in January for $290 million. CBI had spent $1.6 billion on BRL-Hardy just seven years earlier.
CHAMP M-D, John Haddock (right), then said "CHAMP is in the business of identifying growth companies for investment by its funds. It has a demonstrated track record of achieving sustainable earnings growth in its funds' portfolio companies. We are known for supporting the capital requirements of the portfolio businesses and for backing outstanding management."
Remembering it was a wine company he’d just picked up, he added "I think everyone knows there are a number of challenges facing the wine industry but it's an important industry and we will be enthusiastic advocates for it."
AUSTIN CHAMP: BUILT TO DRAG CANNONS AROUND THE DESERT IN THE LATE FORTIES, AS FAST IN REVERSE AS FORWARD, WITH AN UNBREAKABLE ROLLS-ROYCE ENGINE AND A RADIATOR THAT HELD ENOUGH WATER TO QUENCH A BATTALION
To which Troy Christensen chipped in: "The management team is looking forward to working with the new owners who are bringing open mindedness, fresh energy and an expansive approach to the business. Management and CHAMP consider the new name to be consistent with their aspirations for the future of the company."
Professional commentators on the wine business have regarded these waves of vacuous bumpf with jaundice. Tony Keys’ respected weekly winebiz newsletter, The Key Report added some straightforward derision.
“There is a lot more in the same vain [sic] but I will spare you the detail as it’s rather tacky,” Keys (right) wrote. “TKR would prefer more clear direction and figures to back it up ... The direction of the company appears to be in some disarray ... The company is doling out drivel. It lacks direction. I doubt the new owner, CHAMP, has any idea what to do with it. There has not been an announcement of a new board. Does that mean the people from CHAMP think they can form the board without outside input?
“Christensen is a smart operator. What was this embarrassing nonsense he allowed his name to be put to? It’s his job to sell wine at a profit and ready the company so that CHAMP can flog it off within five years with a big wad of dosh in the pocket. It is not up to him to enrich everyday moments around the world.”
It appears that the embarrassing nonsense may have come from Accolade Wines national public relations manager, Anita Poddar. She told the pub/liquor business newsletter, The Shout, that “the company’s vision statement encapsulated the business' desire to focus on its customers and consumers ... It’s vision statement is: 'To enrich everyday moments around the world' ... We want our wines and drinks to shape everyday moments into memorable experiences as well as providing fitting tributes for special occasions. Our mission is to put consumers at the heart of our global wine business, creating distinctive brands and trusted wines,” she said.
“Our vision is about more people enjoying our wines, it's about growth in key markets and consumer-led innovation.”
Perhaps by ‘consumer-led innovation’ she’s reflecting on that throat business. Perhaps she means thirst. Maybe she meant alcoholism.
Before they took their billion dollar dump, the Constellation mob had actually researched some of this drinking stuff. In 2008 they released some handy research on their USA consumers.
Having grilled 10,000 customers over a period of 18 months they divided them into six groups:
1 Enthusiasts. These people entertain at home with friends and consider themselves knowledgeable about wine and make up 12% of the total.
2 Image Seekers: people who view wine as a status symbol – 20% of the total.
3 Savvy Shoppers: people who enjoy shopping for wine and discovering new varietals on their own – 15%
4 Traditionalists: folks who enjoy wines from established wineries – 16%
5 Satisfied Sippers, who don’t know much about wine, but just know what they like to drink – 14%
6 Overwhelmed: those who are overwhelmed by the sheer volume of choices on store shelves. They like to drink wine but don’t know what kind to buy and may select by label – 23%.
THE 162 YEAR OLD VINEYARD PLANTED ORIGINALLY BY PIONEER JOHN REYNELL HERE BESIDE THIS CREEK HAS BEEN REPLACED WITH A GHETTO BY A DEVELOPER CALLED PIONEER HOMES photo KATE ELMES
As this amazing information filtered down through the company, Constellation ridiculed the enthusiasts by ripping out John Reynell’s heritage listed 162 year old vineyard at Chateau Reynella. Like the four-acre Cabernet vineyard I watch being meticulously pruned outside this window, this internationally-famous “status symbol” vineyard should have pleased the Enthusiasts, the Image Seekers and the Traditionalists.
But together these groups make up only 48% of the market.
The vineyard’s destruction probably didn’t much bother the Savvy Shoppers or the Satisfied Sippers, who are 29% of the total.
Maybe the demographers convinced the marketers to tell the board to advise the owners that they could afford to lose that 29% in exchange for the $6 million they got for sub-dividing one of Australia’s most important vineyards. Add to that the 23% who are overwhelmed, who would probably enjoy the fact that one brand had disappeared from their confusion, and we have a 52% increase in something, which must have appeared encouraging.
That is sure 'To enrich everyday moments around the world'.
One of these days one of these people will discover that what they are in the business of doing is growing grapes that make wines that are preferably good enough for blokes like me to want to tip down the gullet which is somewhere in the middle of the collar, or the neck.