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Food & Beverage Industry

Vincor's joint ventures

Wines & Vines, May, 2005 by Michael Botner

Vincor's innovative joint ventures are beginning to raise eyebrows in North American and European wine circles.

There are three joint venture partnerships based in Canada's two major wine regions. In British Columbia's Okanagan Valley, Bordeaux heavyweight Groupe Taillan has teamed up with Vincor to create Osoyoos Larose, and the Osoyoos Indian Band is the majority partner (51%) in Nk'Mip Cellars, North America's first aboriginal owned and operated winery.

Vincor joined forces with Boisset, Burgundy's leading wine merchant based in Nuits-St-Georges, to establish Le Clos Jordanne on Ontario's Niagara Peninsula.

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From a strictly short-term business sales and profits standpoint, the giant wine producer has little to gain from these costly, boutique-style winery partnerships.

After all, Ontario-based Vincor International, Inc. is North America's fourth largest producer and marketer of wines--13th in the world, aspiring to be 10th--with annual sales exceeding US$400 million per year. Publicly traded on the Toronto Stock Exchange, the company's brands include Jackson-Triggs, Inniskillin, Sumac Ridge and Hawthorne Mountain in Canada; R.H. Phillips, Toasted Head and Hogue Cellars in the United States; Goundrey and Amberley in Australia and Kim Crawford in New Zealand.

But the hard numbers are somewhat deceiving. "Each of our joint ventures evolved within the last five to seven years out of specific objectives of the partners," said Donald L. Triggs, Vincor president and CEO. "But even at this early stage, the benefits for Vincor have been enormous," he added.

Osoyoos Larose In The Okanagan Valley

The first joint venture, Osoyoos Larose, was formed in 1998 with Groupe Taillan, a large-scale French negociant based in the Bordeaux region. "We knew that red Bordeaux varietals are particularly well suited to the terroir in the South Okanagan," Triggs said. "But we had a lot to learn, because the industry here for making fine wine is so young, dating back only 30 years, while they, the Bordelais, have been at it for centuries." With six top Medoc estates, including Chateau Gruaud-Larose, a prominent second-growth grand cru classe and Chateau Chasse-Spleen, a well-regarded cru bourgeois, in its fold, Groupe Taillan had the necessary credentials.

Triggs went to Bordeaux in search of the right company, preferably one with international experience in the sought-after grape varieties. The arrangement was concluded after Antoine Merlaut, managing director of Groupe Taillan, visited the Okanagan while on his way back from Beijing, where his company has a joint venture with the Chinese government. "After tasting a pile of wines from one end of the valley to the other, he was so intrigued that he decided to invest in the new winery," Triggs said.

Merlaut provided two highly regarded experts--Alain Sutre and Michel Rolland--as overseeing consultants to supervise vineyard development and winemaking. "At the very start, we agreed to give our French partners leadership in all technical matters," Triggs said. "To see just how good a wine we could make, we knew we had to bring in new ideas, to try a new way. They introduced improvements and techniques rarely, if ever, found in Canada."

The French team provides technical oversight; for example, tank and barrel samples are regularly sent to France for consulting winemaker Michel Rolland's advice and opinion. While Vincor takes the lead in marketing, administration and accounting, its greatest strengths according to Triggs, all key decisions are shared by the joint venture's board of directors, which meets regularly, alternating between the Okanagan and Bordeaux.

The partners selected a 60-acre site on the western bench of Lake Osoyoos, a slim lake in the South Okanagan Valley, a desert-like area just north of the U.S. border. After clearing the land and balancing the soil the first vineyard--the gravely north block--was planted with Merlot, Cabernet Franc and Cabernet Sauvignon in 1999. It was followed by the second section, planted with Merlot, Petit Verdot and Malbec, in 2000 and the final block, with more sand and clay toward the lake, planted with Merlot and Cabernet Sauvignon in 2001.

To suit the specific soil requirements and add complexity to the blend, the French team selected a wide variety of rootstock and clone combinations--many never before brought into Canada--prepared for the new vineyard by the Mercier nursery in Bordeaux. "Just like having two or more gifted musicians playing the same piece on different violins adds richness and depth to the music, using multiple clones gives the winemaker more to deal with," Triggs said.

"Our consultants also insisted on much higher levels of vine density per acre, planting 1,800-2,000 vines per acre, compared to the traditional spacing of 700-900 per acre in the Okanagan, yielding a smaller but riper crop. The irrigation system is also unique. Rather than the typical overhead or drip irrigation system, the Osoyoos Larose vineyard uses micro-jets, which spin and spread the water beneath the canopies on the whole surface between the rows, ensuring more lateral fruit growth, and giving us much better interpretation of the terroir."

Food & Beverage Industry

Vincor's joint ventures

Wines & Vines, May, 2005 by Michael Botner

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