Q&A: Richie Vandenberg, LCW

As the World Bulk Wine show prepares to take up residence in Amsterdam, Richie Vandenberg, CEO of Australia bulk wine producer LCW,  speaks to the drinks business about the current state of the market.

Richie Vandenberg, CEO of LCW

LCW exports to 13 countries across three continents, sourcing its fruit from regions including the Limestone Coast, Barossa Valley and greater South Australia.

Which markets do you believe are currently the most buoyant for bulk wine exports? 

By volume the UK and Europe remain Australia’s largest bulk wine destinations. Australia is long established in these markets with a reputation for high quality varietal new world wines. For LCW growth in bulk wine continues to come from the UK, Europe and the Asia Pacific region. While in general the wine we move into Asia is not typically moved in bulk it is BOB (buyer’s own brand) so from a supplier perspective we view this as a bulk wine movement as opposed to a traditional branded exercise. Australian wine exports peaked in 2007 at which time bulk wine made up 30% of the export volume. Since that time we have seen the continued emergence of bulk wine which now makes up nearly 60% by volume of all exported wine from Australia.

In contrast which markets, if any, have contracted?

We are not experiencing market contractions at this stage however partners in Ireland are experiencing challenges to volumes with recent excise increases so this is very much a market we are monitoring closely to understand what those impacts may be.

Consumer demand for cheaper, bulk wine exports is unlikely to wane, but how do you reconcile this lower cost with perceptions of quality?

We have strategically positioned ourselves as a premium bulk wine producer focused on delivering high quality cool and warm climate wines to the market. We don’t believe bulk wine needs to be associated with a compromise in quality and feel the customer is of the same opinion. Real perceptions of quality are realised once the wine is consumed and we believe wines that overdeliver in the bottle will overcome any pre conceived perception that may exist. We continue to experience strong reviews from both wine critics and wine shows for our range of wines once in the bottle.

What are the biggest issues currently facing the bulk wine industry?

While operational issues associated with bulk wine logistics have largely been overcome ensuring quality and consistency of supply arresting the trend of declining export market value remains a challenge for Australian winemakers. Other challenges include the high AUD, geographic and tarrif imposts and the rebuilding of “Brand Australia”. Rebuilding “Brand Australia’s” premium image while answering the calls of the customer who’s demand growth is in bulk wine sees a paradigm shift in the way we need to market as a nation.

What is LCW doing to reduce its carbon footprint?

LCW is committed to reducing not only its carbon footprint but also its overall environmental impact. The very nature of exporting bulk wine reduces carbon footprint due to transport efficiencies. Further, LCW currently engages the use of green power and is constantly implementing efficiency programs and Capex upgrades in a bid to reduce energy consumption. LCW is committed to recycling all waste stream by turning grape marc into animal feed and compost while using waste water to irrigate 12 hectares of woodlots on the estate.

How important is the upcoming bulk wine show in Amsterdam to your industry?

Bulk wine fairs are an important sales tool to complement our strategy of over delivering on wine quality and service. Spending time in the market building relationships and developing trust are the keys to sustained success and using these fairs to build on existing, and developing new, relationships is integral to LCW.

What are your company’s priorities for 2015?

LCW is committed to delivering quality and service to our partners. Building on these relationships remains our core focus. We are focused on building a presence in the American market where we see an opportunity for new age Australian wines tailored for not only the millennials but generations to come.