Monday, June 29, 2015

I always get asked, "What's news" at Murdoch James?

Well, there is certainly some fantastic news to share today.

In an exciting development that reinforces Martinborough’s prominent position as New Zealand’s premier Pinot Noir producer, and our profile as a leader in the region, we recently announced that we are removing 10 hectares of Sauvignon Blanc vines and replacing them with Pinot Noir. In all, more than 25,000 vines will be replaced at a cost of over $300,000.
Chris Shaw cutting out the old SB vines

This is not a decision for the faint-hearted. Not only is there a significant cost involved; we also had to accept it can take up to 3-5 years for the new vines to return a full crop.

Does not mean we don't like Sauvignon Blanc; it just means we love Pinot Noir more. We will still be keeping around 20% of our Sauvignon Blanc vines, but the Pinot Noir plantings will nearly double.

Roger Fraser contemplating the change
The decision was made as we have not able to meet the export demand we have for Pinot. Every year we have to ration our customer orders. Against that background, using prime Pinot Noir vineyard land for Sauvignon Blanc did not make sense in either economic or strategic terms.

Easy to say that in the office, but when I went out into the vineyard today, it was a very emotional time. To see thousands of vines that have served us well being removed was heart-breaking.

What taking out 25,000 vines looks like
I just had to remind myself, this is the start of an exciting journey, where will capitalise on the strengths of our team and our terroir. 

Over the next three years we will tell the story of these vines, as they are planted and mature. So, watch this space for lots of updates.

This is the little rascal

Sunday, June 28, 2015

Bargain Pinot Noir?

Birth of a Wine Blogger has been in hibernation for a while, a bit like our dormant vines. 
Recently I was woken from my slumber by a colleague in the industry sending me a link to a Facebook post he had published. He was making the point that a certain Pinot Noir (see link) is on promotion in supermarkets for just $10 a bottle. He went on to say that it must be made from wine at the lower end of the spectrum, sourced from the countries featured on the label, to retail at that price.  He asked, in a world of commoditised, characterless wines, is this something we really need?

Check out:

What concerns me about this, as a dedicated Pinot producer, is that Kiwi consumers will buy this wine thinking it is a bargain, try it, may not have a great experience, think all Pinot Noir is the same, and be turned off the variety forever. 
Why did he conclude that the wine must come from the "lower end of the spectrum"? 
Let's dissect the $10 and see where he is coming from. Of the ten dollars, the government collects $3.66 (the ALAC levy of about 3 cents, plus $2.13 excise duty and $1.50 GST); pretty good return for the government! 
Then, assuming the retailer takes a 30% margin ($3) and the distributor a 20% margin ($2), that leaves $1.34 for the winemaking! Let's be conservative though and say the winery sells direct to the retailer, so no fee for the distributor. In that case the remaining sum is $3.34. Let's see where we end up if we consider that.
What's left to cover the wine component after allowing for bottling costs, freight and distribution, warehousing, marketing and other related expenses? Say these add up to $1.80 per bottle. That leaves $1.54 for the wine. Say my analysis is too tough. Add another $1 back to cover that. That leaves me to ponder the quality of wine you might buy at $2.54 per bottle? 
Contrast that with the cost per litre of our 2015 Pinot Noir. That was over $13 per litre, before bottling, taxes, etc. So even if my costs are high, we can safely assume it is not top quality, hand-picked Martinborough Pinot Noir in the wine we are discussing. 
Disclaimer: I have not yet tasted this wine. I will as soon as I can get a bottle though, then I'll report back. If I have wronged a good product I will admit that. However, my comments above are based on experience and general principles. I can say with confidence is that I have learned in my 30 years in the wine industry is that it would be an absolutely amazing achievement to deliver a 'Premium Pinot Noir' (which is what the label claims) for $10, let alone $2.54.