IWSC Business Insight: Origin Wine

Wine news

Sex 26 Jun 2020

Por Adam Lechmere

Origin Wine, founded by Swiss winemaker Bernard Fontannaz in 2002, describes itself as “a one-stop service for the wine industry”. Fontannaz started providing South African wines to the on-trade and now covers everything from vineyard to warehouse to customer, including blending, bottling and branding.

Today, the business has a turnover of £50m, and 331 employees around the world. Working closely with ten producers and 15 retailers, it sells in best years over 100 million litres of wine annually, and exports to markets including UK, USA, Canada, Russia, The Netherlands, Sweden, Denmark and Germany.

Under the Origin Vineyards brand, premium wine is made at Le Grand Domaine in Devon Valley, Stellenbosch and Finca La Anita in Agrelo, Mendoza, and also in Valais, Switzerland.

Wines are now sourced from Argentina, Chile, Australia, New Zealand, France, Italy, Spain and Switzerland.

Mike James, director of global sourcing at ALDI, has worked with Origin for a decade. He describes the company as “relaxed but efficient, quirky yet mainstream, innovative without being pushy, and adaptable without promising the impossible.” It’s a rare set of skills, he says. Fontannaz tells us more...

Origin Wines starts trading in 2002, going on to become one of South Africa's biggest wine exporters

"Creativity, flair and speed"

"Packaging and presentation are key"

Focus on the off-trade

The ban on the production and export of wines in South Africa

"Prepare for the worst; the best looks after itself"

"Never take no for an answer"

"Adapt and re-invent yourself"

"Origin Wines are quirky yet mainstream, innovative without being pushy, and adaptable without promising the impossible"


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Bernard Fontannaz

Tell us about the company background.

I started Origin Wine 18 years ago. At the time, working in South Africa, I spotted a gap between the South African cooperative structure for wine production, on the one hand, and the need for a reliable, service-orientated wine supplier to retailers, on the other. So we have worked tirelessly to fill that gap. Since we started, Origin has focused on exports and the off-trade. We are now one of South Africa’s biggest wine exporters.

Following the successful development of the South African business, we reached out to Argentina two years later in 2004, starting Mendoza Vineyards, identifying the massive potential of this New World country making Old World-style wines. It was the best of both worlds in essence and it was symbolised by the Malbec phenomenon.

Over the years, Origin has developed an offer which encompasses private or exclusive labels, to innovative concepts, to our core brands Stormhoek and Mendoza Vineyards. Nothing is too small and nothing is too big not to be considered.

We also developed a far-reaching export footprint covering 33 markets with offices in our key regions: the UK, Switzerland and North America, to enable us to deal with those markets with maximum efficiency and cost-effectiveness.

Out of the all our markets, the UK has always had the predominant share.

Over the last four years, we have focussed on developing a genuine premium offering based on our vineyards and estates, Le Grand Domaine in Devon Valley, Stellenbosch and Finca La Anita in Agrelo, Mendoza. Under Origin Vineyards, these flagship brands are more focussed on the on-trade and the B2C business. This is a new chapter and a new route to market us, and a steep learning curve too.



What's your USP?

Creativity, flair and speed and, as the saying goes: “It’s the consumer, stupid”. Our official line is: a complete focus on customer service alongside flexibility; an unbeatable price/quality offer; a fully-audited and widely accredited end-to-end proposition from vineyard to shelf; from consistent-quality bulk wine varietals to mid-tier organic; from No Sulphur Added and Fairtrade wines to single vineyard, super-premium wines.

We have prominent ‘lifestyle’ brands like Stormhoek and Mendoza Vineyards as well as premium ones like Grand Vin de Stellenbosch and Finca la Anita.

We understand our key categories and offer solutions for our customers for all scenarios and opportunities.

We also have great examples of market-leading innovation: our craft wine initiatives. The purpose of Craft&Origin is to emulate the success and following developed by the craft beer movement; nothing is more “hand-crafted” than a wine and we wanted to get that message across.

Thus, we pushed boundaries initially with our organic packaging in the form of beer bottle with a crown cap; the idea was to attract new consumers by presenting them with a package they were comfortable and familiar with.

Where it was listed, we got a very high loyalty numbers and generated a following. This proved to us that we are targeting the right new consumers in the right format. Sadly, we were a little ahead of our time perhaps, as despite high loyalty amongst millennial consumers, the sales volumes did not follow and thus did not survive in this format.

But watch this space. Just as craft beers have transitioned from bottle to can, we’re now evolving into a can offering. 

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How are the products evolving?

The wine itself needs to deliver on expectations – that is an absolute prerequisite. But we also believe that packaging and presentation are key to the consumers’ purchasing decision.

Far too often the wine world is too conservative. It often limits innovation to a mere vintage change.

With this in mind, we are always trying to innovate to resonate with our existing clients and, very importantly, to attract new ones.

For example, we have redesigned Stormhoek, our core brand, with a bespoke bottle created to stand out on the shelf. More importantly, we show that  the wine is “bottled at origin” (as it says on the label) thus preserving the quality of our wines as well as creating employment in South Africa.

We have premiumised our aspirational brand, Grand Vin de Stellenbosch, using an embossed bottle.

We have tried different formats under our Craft&Origin brand and have recently created a bespoke offer of organic wines from around the world under the label Origin Uncut.

 

What is the breakdown by sector?

Our sales are 98% off-trade. At the moment our on-trade presence is just beginning and is very limited; our aim is to get our flagship brands, Grand Vin de Stellenbosch and Finca La Anita into key restaurants in our key markets.

The B2C side, based on what we learned lately, is fast becoming a priority as well.

 

What have been some of the challenges?

Until today, our greatest challenge has undoubtedly been the terrible drought in South Africa, which decimated our wine supply over two vintages. Then, just when we thought it couldn’t get worse, the pandemic has compounded it.

The resulting ban on the production and export of wines in South Africa, the only wine-producing country to have such a ban, put us under extreme pressure.

It has been heart-breaking – quite apart from the economic burden – not to be able to produce wine, and to service our long-established clients.

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What have you learnt from overcoming those challenges?

    • To prepare for the worst; the best always looks after itself
    • To diversify our supply base to make it more resilient to natural catastrophes
    • To be prepared for the unthinkable and always have a plan B ready – in this case, as we have been caught short by the ban on production imposed in South Africa, we quickly put in place a contingency plan, prepping orders in duplicate, one for bottling in South Africa, as per the normal course of business, and a second one ready to be exported in bulk at 24 hours’ notice to be bottled abroad.
    • To adapt very quickly indeed: for example, our bottling plant in South Africa has been totally reorganised to cater for social distancing, and other new health measures required to protect our employees.
    • This has been successful: despite the new norms and measures, we are back to normal output.



What advice do you have for young wine producers, for distributors - for anyone wanting to get into the logistical side of the wine trade?

It’s not enough just to produce a stunning wine. You need to master and understand how to get it to your customers. This is the necessary and less glamourous part of the business. People often assume that luck is involved in getting your wine listed. That’s not true: it’s down to homework. Study the market and try, try and try again. Above all, never take no for an answer.

 

Preparing for the next generation - how can you future-proof the business?

The only way to future-proof a business is to adapt and re-invent yourself. What is right today might not be right tomorrow; in the 21st century things change faster than ever. Adaptation is essential for the survival of any business, no matter its size.

    • You need to be ready to adapt to new conditions such as drought (ie develop sustainable farming methods to reduce your reliance on water); new trends such as low alcohol wines; market demands such as ecommerce
    • You need to be in control of your own structure, not to be an agent or middle man, in order to be able to control cost, lead times and services  and to be able to make long-term strategic decisions.
    • You need to have diversified markets and outlets to be able to weather changes and hedge your risks.

Inside information – what they say about Origin Wine

Mike James, Director Global Sourcing, ALDI

I first came into contact with Origin about a decade ago, shortly after I started buying wine for ALDI GB/IE. To be honest, I can’t remember how, why or when we were first introduced to each other, but I rather suspect I was drawn to one of their whacky stands at the London Wine Fair…

Since then, we have worked continuously and closely together and that strong partnership has now also started to flourish in other European ALDI markets and also in ALDI US.

For me at least, Origin seems able to occupy that relatively rare niche of striking a balance: they are relaxed but efficient, quirky yet mainstream, innovative without being pushy, and adaptable without promising the impossible. Origin are massively customer-focussed, but never afraid to ask the question “What if we tried…?”

Because of this, over the last ten years we have sold of lot of mainstream wine from Origin, and we have had a lot of fun pushing the boundaries and challenging those mainstream expectations – trying to translate the success and consumer appeal of craft beer into a wine range being the most obvious example.