CONSTELLATION'S VALUES AND CULTURE

THE AUTHOR AT THE GATE OF JOHN REYNJELL'S VINEYARD, NOW DESTROYED BY CONSTELLATION AFTER 161 YEARS OF FINE WINE PRODUCTION.

The Big C Pulls One Out
Constellation Refines Its Strategy
Premiumising Philanthropy
by PHILIP WHITE ... This first appeared in The Adelaide Independent

“In fiscal 2009, we made significant progress toward premiumizing our portfolio and saw the early benefits of this effort.”

The premiumizer is Richard Sands, Chairman of Constellation Brands, the world’s biggest wine company, owner of what was Hardy’s. His brother Rob is CEO. Their headquarters are in Victor, New York.

Part of this premiumizing directly affects many aspects of South Australian life, in line with the Sand’s brothers “refined strategy”, which has the bold goal “to elevate life with every glass raised” and to “make a positive difference in the communities in which we live and work”.

In the late eighties Mike von Berg, one in a long chain of colourful PR flaks, summoned the Australian wine press to Hardy’s new headquarters at Reynella. He lined us up, clicked his heels, and told us our attitudes to the bulk wine market were far too negative. No longer would flagons be called, well flagons. “We’re relaunching them”, he said with a grin. “They will now be known as Jolly Jugs.” The new Jolly Jug was a flatter flagon that would fit in the door of a fridge.

Like von Berg, the Jolly Jug very quickly disappeared into oblivion. But it’s the same old same old at Constellation. The grand old Hardys Nottage Hill brand has been granted bladder pack status for the first time, and is selling in the huge UK liquor chain, Sainsbury’s, in Freshcase, a 2.25-litre bladder pack with the tap built flat into the base. It can be stored horizontally in the fridge, and one can fill a glass without removing the whole pack. Sainsbury’s hails this as “one of the most exciting packaging innovations in wine that we have ever seen ... offering real benefits to the consumer in keeping premium wine fresh for longer in a convenient pack”. Premiumizing, see.

Constellation’s PR troops have been working very hard on their premiumizing. They’ve now “defined three areas in which all of its Corporate Social Responsibility focus will take place: sustainable business practices, philanthropy and social responsibility. From these three focus areas flow specific categories of emphasis, including our environmental impact, corporate giving, marketing and advertising codes, community involvement and much more. All of Constellation's social responsibility efforts flow directly from its values and culture.”

Values and culture, eh? The terrible reality is too much of this business depends entirely upon a sick Aussie dollar, an eternal oversupply of grapes and cheap water to pump them up, and a market that will drink everything you can tip into it. And all that’s dependent on the discount bins of the Old World, where profit barely exists. Given all that, Constellation appears to be marching backwards out of Australia.

It’s closing its eleven year old, $20 million Stonehaven Winery at Padthaway because it can’t find a buyer. It has closed its brand new Leasingham winery at Clare. The brands will remain, but they’ll be virtual, now being glued on wines made at Reynella, Tintara or Berri. Constellation has eight other regional wineries for sale around Australia, and has managed to sell only seven of the 23 vineyards it no longer wants: 175ha of vines in Padthaway and Clare are being pulled, so the properties can be sold as farmland.

In recent months, Peter Dawson, the chief winemaker, was sacked. John Grant the CEO soon followed. Even the revered environmental scientist who ran Banrock Station, Tony Sharley, has had the chop. Banrock, by the way, has just released a suite of wines called The Mediterranean Collection. These “Mediterranean” wines are grown at Banrock and made at Berri, which shows incredible sensitivity to the notion of honest labelling and terroir.

The cruellest metaphor for this whole bloody mess is the recent removal of John Reynell’s 161 year old vineyard opposite his elegant colonial cottage at Reynella. Constellation hired an historian who found that this vineyard was unduly respected, because generations of PR people had overblown its historical importance in order to sell more wine at a higher price. This information led the Onkaparinga Council to approve the destruction of the vineyard in spite of a heritage listing on the entire Reynella site. It will be replaced by 41 tiny apartments.

This leaves the door open for another team of PR flaks to take the blame should another manager decide to sub-divide the much bigger heritage-listed vineyards to the west and south of the enormous Reynella winery. If a historian could be found to contradict the first one, as I most fiercely do, it would be easy to admit to a terrible mistake, thereby show that the important vineyard was indeed the one now removed, leaving the greater vineyard with no valuable history, but an enormous value as housing land. Watch that space!

CONSTELLATION'S HISTORIC CHATEAU REYNELLA. JOHN REYNELL'S FAMOUS CABERNET MALBEC VINEYARD, CIRCLED AT LEFT, ORIGINALLY PLNATED 161 YEARS AGO, HAS BEEN UPROOTED TO MAKE WAY FOR A YUPPIE GHETTO. ,

Brazen backflips are not new in Constellation’s community involvement. Until recently, it flogged its USA kiddylikker, Wide Eye Schnapps, a potent mixture of caffeine and alcohol, with the promise that “consumers who drink Wide Eye will remain alert when consuming alcohol.” The social responsibility came into play when Constellation suddenly agreed with the Federal Trade Commission ’s ruling that their marketing “was deceptive, unsubstantiated, and in violation of federal law”.

Like John Reynell’s 161 year old vineyard, that one got pulled, too.



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