Rothschild tie-in fuels Craggy Range expansion

As the first wines from his joint venture with the Rothschild family arrive in Europe, Craggy Range chairman Terry Peabody has confirmed expansion plans for his core brand.

Craggy Range owner and founder, Terry Peabody with his wife Mary

Originally announced in September last year, the partnership has seen Benjamin de Rothschild and family produce Sauvignon Blanc and Pinot Noir from a 26-hectare vineyard on Rapaura Road, Marlborough.

Called Rimapere, the Maori for “five arrows” in reference to the five branches of the Rothschild family, the brand’s vineyards are managed by the Craggy Range team, which also handles distribution through its Australian and New Zealand networks.

Explaining the primary attraction of this alliance, which after all looks set to compete with Craggy Range in New Zealand’s premium wine pool, Peabody told the drinks business: “We’re constantly interested in expanding. This was an opportunity to do that but not affect our own brand.”

Priced at “slightly less than Craggy Range”, the first vintage of Rimapere is “a few thousand cases”, although this is set to grow in future years, and appears to be meeting with a favourable initial response.

“We’ve started distributing it in Australia and our whole allocation is gone,” reported Peabody, whose company already looks after New Zealand sales of Champagne Barons de Rothschild.

Although unable to confirm yet who will represent Rimapere in the UK, since the market is managed by the Rothschilds’ own distribution team, Peabody revealed that the wine has already been shipped to France. In Hong Kong and China, the Rothschilds will work through their existing partnership with Jebsen Fine Wines.

The Craggy Range winery in Hawke’s Bay

Turning to Craggy Range’s own expansion plans beyond its current 500 acres of vineyard, Peabody outlined: “We’re running towards the end of our planting programme. We’re now very definitely looking for four more blocks of land, but we’re only interested in buying four blocks of the same quality as we have already.”

With its broad spread not just across grape variety but region, Craggy Range currently has 50% of its vineyard holdings in Hawke’s Bay, with the majority focus there on Merlot, augmented by Chardonnay and Syrah.

Most of its remaining vineyards are in Martinborough, where the producer grows Sauvignon Blanc, Pinot Noir and a small amount Riesling, with further holdings in Malborough in the form of Sauvignon Blanc, as well as a small amount of Central Otago Pinot Noir and Pinot Gris.

“Very few New Zealand producers have such a broad variety of wines like that,” remarked Peabody, who explained that as a result of this diverse portfolio the company prefers to set up partnerships where it is the distributor’s sole New Zealand interest. “We want their focus to be on us,” he remarked.

As for the focus for Craggy Range’s next phase of expansion, Peabody described himself as “very interested” in Marlborough and Hawke’s Bay, with a particular mission to acquire “a much larger plot of land in Marlborough.”

With New Zealand not immune to the challenging economic pressures facing its major export markets, Peabody suggested that there are currently expansion opportunities for those with capital to spare. “It’s been a difficult time for the growers,” he observed. “Not so much for the larger producers but some of the smaller businesses.”

In line with this picture, Peabody offered further insight into his desire to expand. “For every 1,000 boutique operations you might have one that’s successful,” he remarked, adding: “You really have to have a somewhat larger scale operation.”

Highlighting the “very complex” nature of the wine industry and stressing: “it’s very important to have international distribution,” Peabody is correspondingly dubious about the commercial viability of many small-scale wineries.

“If you’re going to produce wine as a hobby, you’re going to find it’s one of the most expensive hobbies there is,” he warned, stressing: “It requires a great deal of capital and a great deal of patience.”

Craggy Range Te Muna Road Vineyard in Martinborough

These views are founded on Peabody’s own 20 years of experience in the wine business, having first established and built up waste management firm Transpacific Industries across 115 sites in Australia and New Zealand.

Initially persuaded into the wine business by his wife and children, US-born, Brisbane-based Peabody first seriously started to look around the world for a winery in 1993. Having started buying land in 1995, Peabody and his Craggy Range co-founder and director of wine & viticulture Steve Smith, planted the majority of Craggy Range’s vineyards between 1996 and 2000.

Looking back on this period, Peabody recalled a combination of good fortune and an entrepreneurial ability to recognise potential. “The timing in New Zealand was so appropriate,” he recalled. “The wines weren’t known and you could buy land at reasonable prices that would produce great wines.”

Twenty years later, Peabody confirmed that Craggy Range looks set to retain its family-run ethos. “We developed this as a legacy for our progeny,” he explained, noting that his eldest grandchild is already involved in the business, while several of his 10 other grandchildren are expressing similar levels of interest.

Alongside his ambitions to secure Craggy Range’s commercial future by expanding vineyard holdings, Peabody is busy strengthening his international sales team. With customers in around 50 countries, he noted: “It’s really more about developing those existing markets. We’re adding a person in Asia, Europe and the US.”

As for whether he shares the rest of the wine trade’s excitement about China, Peabody confirmed: “Absolutely. Our growth in Asia has been remarkable – China will become our second biggest market in the next year.”

For the moment, however, the US remains his biggest market “by far”, and there is no plan to divert from Craggy Range’s strong on-trade weighting, which currently accounts for around 80% of the producer’s sales worldwide.

Having spent the last week in the UK, Peabody presented an unusually upbeat health report, saying: “The UK is great. We’re very pleased with the market. It’s been difficult times, but everybody still seems to be drinking. I think people are generally upbeat and looking for growth this year.”

Unsurprisingly, Peabody is convinced that New Zealand wines offer a strong proposition, despite the scale of competition from other major producing nations.

“If you get into value for money for the quality of wines then I think New Zealand stands out,” he maintained. In terms of stylistic and image advantages, Peabody also pointed to the convenient ongoing trend whereby “people are moving more towards cool climate wines,” as well as the country’s “great reputation for being clean and green.”

However, Peabody also acknowledged quantitative issues that, for good or ill, restrict New Zealand’s ambitions in certain areas. “The limiting factor is that there aren’t masses of areas to grow fine wine grapes and we’ll never compete in that ‘Two Buck Chuck’ end of the wine industry – and personally I don’t want to,” he concluded.