Thursday, August 30, 2007

What Does the Future Hold for Seppeltsfield Fortified Wines?

“Like the ’51 Grange, like a Streeton painting, a Melba recording, a Bradman bat, or a Lawson short story, its part of the Australian ethos. A true icon”. - Huon Hooke, Sydney Morning Herald September 24, 2002.

The purchase of Seppeltsfield and its stocks of fortified wines by Kilikanoon, or more correctly the The Seppeltsfield Estate Trust of which Killikanoon is a principal, is either pure folly or a marriage that will secure the essence that is both the Barossa Valley and Australian fortified wine. Yes, it is that simple.

One of the major concerns for the new owners has to be the marketability of Australian fortified wines, and particularly the Seppelts range. While there are plans for the Seppeltsfield infrastructure including “sympathetic redevelopment and adaptive re-use of many of the Heritage Buildings in line with the Seppelt family’s original wide-ranging food and beverage interests”, the fate of the range of wines that is Australia’s most diverse and most acclaimed is also of “para”mount concern. Oh, you think using para is just a little play on words? Well its much more serious than that because the 100 Year Old Para Liqueur Vintage Tawny which dates back to 1878 is a wine that is more than a national icon. It is unique in the world of fortified wine. The Seppeltsfield Trust appreciates this as evidenced by the recent statement from Nathan Waks that “Until last week it was in fact possible to buy nearly all vintages from 1879 to 1907- the current 100 year old, directly from the cellar door, as they are only hand bottled. We have agreed with Foster's to put a hold on sets being sold, whilst we evaluate the remaining stocks of each vintage, to ensure that we treat this [as] a very special resource and not simply sell it out quickly.” Even though it’s the flagship of the range, the 100 Year Old Para Liqueur Vintage Tawny is only part of this remarkable collection of wine.

As a lover of Seppelts fortified wines I wanted to find out how The Trust plans to market the wines especially overseas as the Seppelt fortifieds have not been for sale in the USA for a number of years. Following the original post by Shiraz on the sale of Seppeltsfield Nathan Waks emailed to say that he would be “Happy to answer any questions about the Seppeltsfield sale, and particularly the future.” I emailed back 10 questions.

1) First, how will the wines be labeled? Kilikanoon has been granted an exclusive license for the Seppeltsfield brand so will they carry the Seppeltsfield name or will they be under the Kilikanoon label?

Nathan Waks (NW): Our agreement with Foster's means that Seppeltsfield will be the fortified brand for all the current Seppelt Fortifieds. It will not make still or sparkling table wines under the Seppeltsfield label, and Seppelt will not make fortified wines. Kilikanoon will continue its business as usual. It may make a fortified wine or two at some point in the future but they would not be duplicates of the Seppeltsfield wines.

2) What countries do you see as potential international markets?

NW: Kilikanoon exports (small volumes mainly) to 25 countries. We would see them all as potential markets.

3) Roberts Parker has graced many Aussie fortifieds (Campbells, RL Buller, Chambers, Yalumba, Stanton and Killeen) with impressive scores. These are the sort of scores that drive consumer interest and yet it seems that Aussie fortifieds have lagged behind dry wines in terms of appeal here in the US. Why do you think that is and any ideas on how to create interest?

NW: I was under the impression that at least some of those you mentioned are doing quite well in the US, but overall the question is one of education. Once people realise that our "ports" are not copies of Port from Portugal etc, and that they are all distinctive, as are our table wines, then I think interest may rise. I doubt that many US consumers would know that wines like our Seppeltsfield Para Liqueur Tawny (Port) are made principally from Shiraz and Grenache, the grapes they love in our table wines...

4) Will the Trust continue to be part of The Muscat of Rutherglen group? Will you be contributing to, or learning from the project that The Muscat of Rutherglen group has initiated to study consumer attitudes to fortified wines and strategies to develop knowledge and interest in the wines in both domestic and international markets?

NW: Absolutely and enthusiastically.

5) At a recent tasting run by Classical Wines here in the USA I was amazed at how inexpensive Spanish dessert wines can be. For example the excellent Don PX Pedro Ximénez Gran Reserva 1971 from Bodegas Toro Albalá runs about $25USD for a 375 ml bottle. That is excellent value for any wine region. Which country do you see providing the greatest competition for the Seppeltsfield fortifieds?

NW: I look at this not so much in competitive terms with Spain or Portugal (the obvious ones), but rather hoping to get more people to try the many and varied delights of fortifieds drunk in moderation, and often with food.

6) With Fosters still taking some grapes from the Seppeltsfield vineyards can Kilikanoon/Seppeltsfield source enough grapes from the vineyards purchased in the assets sale, or will fruit be acquired from new vineyards for the wines?

NW: The agreement allows for us to source as many grapes from the Seppeltsfield vineyard as required for fortified production, and additionally Foster's is working to have their principal Rutherglen grape contracts assigned to us. We will of course be talking directly to these growers in due course.

7) Will there be any changes in sourcing fruit from Rutherglen?

NW: See above.

8) Earlier in the year Glug gave some information on the sales of some of the Seppelts fortifieds. The numbers were surprising. For example sales of the GR113 Rare Muscat were less than 3 bottles a day and the DP117 Fino had sales of about 20 bottles a day. I don’t know if those numbers are correct, but do you see poor sales numbers as reasons for concern about the viability of specific wines?

NW: We start with a clean slate. I note all the sales information which has been provided to us as part of the sale process, and which is of course confidential, but we are quite comfortable with our initial sales projections which are conservative. We will look at all the current SKU's and may make changes over time in line with market demand and supply, as does any normal wine business.

9) Did Kilikanoon make a NV Kilikanoon Reserve Muscat Wine? Parker reviewed this wine in the Wine Advocate # 161 (Oct 2005.) but I can’t find any other information about it.

NW: This is a wine made for cellar door sales only, and is sourced from Rutherglen. We will consider the future of Kilikanoon fortified in the context of our overall portfolio.

10) And last. When will the first Seppeltsfield Festival be held? Just as an FYI my wife and I make it over to Oz during the first 3 weeks of December!!

NW: That I can't say! We will of course be very focussed on the wine business initially, but we will be discussing this at our first Board meeting no doubt!

No, I’m not naïve enough to think that the Seppeltsfield Festival will be scheduled according to my travel arrangements. I’m also not naïve enough to believe that Seppeltsfield and its wines are now on a secure path for the future. The wine game is simply not that straightforward. However it is becoming obvious that the new owners are passionate, knowledgeable, and caring of the traditions of the past. And they have a vision for the future. The passage of time will tell. Benno Seppelt could not have predicted what he was laying the foundation for when he set aside that barrel in 1878, but he did it. We can feel fortunate that individuals like Janet Holmes à Court, Greg Paramor, Bruce Baudinet and Nathan Waks have the courage to lay down their barrel for the future.

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