French wine major AdVini announced that it has agreed to acquire Stellenbosch Vineyards, one of the leading wine producers and exporters in South Africa. Under the terms of the agreement, AdVini will take control of Stellenbosch Vineyards’ brands, winemaking and bottling facilities, and logistics center.
The deal, which will further diversify AdVini’s holdings and will strengthen its presence outside of France, follows on the heels of an international distribution agreement entered into by the two parties at the beginning of this year which encompassed the Americas, Asia, Travel-Retail, and a broad range of global markets. Once the deal is completed, Stellenbosch will continue to serve existing customers under the umbrella of this agreement.
Located on the historic Welmoed farm which dates to 1690, Stellenbosch Vineyards is a registered Fairtrade producer and a member of the Agricultural Ethical Trade Initiative (WIETA) with distribution to more than 30 global markets. Its strong portfolio of historic brands includes Stellenbosch Vineyards Collection of Fine Wines, Welmoed, Arniston Bay, and Versus, earning a turnover of US$16 million.
“With the addition of Stellenbosch Vineyards, our South African wine offering in the premium segment is vastly becoming an enticing selection, together with international brands that meet the demand of our retail customers and consumers, in a model that is particularly respectful of the social and environmental values,” said Antoine Leccia, CEO of AdVini.
AdVini is already a major name in the top winemaking country in the world, with 2,333 hectares of vineyards across France’s most famous wine producing regions. Its extensive portfolio includes Ogier and its Clos de l’Oratoire des Papes in Châteauneuf-du-Pape; Antoine Moueix Propriétés with Château Capet-Guillier in Saint-Emilion and Château Patache d’Aux in Médoc; Domaine Laroche in Chablis, Maison Champy in Burgundy in Côte-de-Beaune; Vignobles Jeanjean and the Mas La Chevalière in Languedoc; Domaine Cazes and its estate Clos de Paulilles in Roussillon; Gassier with the Château Gassier and Château de Roquefeuille in the Provence Sainte-Victoire area; Rigal and Château de Chambert in Cahors.
Prior to the deal for Stellenbosch Vineyards AdVini already had a foothold in South Africa, owning L’Avenir, a wine and tourism operation, Le Bonheur Wine Estate, Maison Du Cap, and a significant stake it acquired in Ken Forrester Vineyards last year. The group also has a partnership on 150 hectares with Santa Carolina in Chile. From these interests, AdVini exports to 106 countries and has a turnover of US$307.21 million.
“AdVini is present in more than a hundred countries due to its sales network and close relationships with its customers,” said Eduan Steynberg, managing director of Stellenbosch Vineyards. “We, at Stellenbosch Vineyards, are all proud to be joining the AdVini family.”
In the Hot Seat
Wine grapes are quite sensitive, and ongoing climate change is reshaping the global winemaking map. Countries that once dominated the industry might not be able to hold their positions for long, meaning players in these regions, such as AdVini, are smart to seek geographic diversification.
Quartz reports that global wine output dropped to a 60-year low last year, with production dropping by 9percent to 25 billion liters. However, more telling is where it dropped, with production falling across the traditional producers of France, Spain, Italy, Germany, Chile, and China. Meanwhile, output climbed in Argentina, South Africa, and Australia, and production in the U.S. remained neutral.
A study released by Conservation International in 2013 and published in the journal proceedings of the National Academy of Sciences concluded that climate change could result in a decline in wine production by two-thirds among premier regions by 2050. The EU, which thanks to its climate, is home to some of the world’s highest quality vineyards, and which accounts for 17 billion liters of wine, or half of the world’s wine output per year, could see stark changes due to climate change.
“The fact is that climate change will lead to a huge shakeup in the geographic distribution of wine production,” said Lee Hannah, an author of the study and lead scientist with Conservation International. “It will be harder and harder to grow those varieties that are currently growing in places in Europe. It doesn’t necessarily mean that [they] can’t be grown there, but it will require irrigation and special inputs to make it work, and that will make it more and more expensive.”
Already, Alsace is seeing its growing season shortened as harvests that traditionally took place in October are now being done in September. Meanwhile, in Tuscany, growers are having to change the varieties they grow due to traditional varieties ripening too quickly, and production of pinot noir, a mainstay of Burgundy is waning.
A universal truth across agriculture and those who invest in it, is that the entire industry is subject to the weather. However, those who pursue a level of diversification in their portfolios can hedge against the worst of the fallout.
-Lynda Kiernan