Subscriber login Close [x]
remember me
You are not logged in.

Why English wine's Litmus Wines is on board with Branson's South African hotel venture

Published:  23 March, 2015

English winemaking consultants Litmus Wines recently teamed up with Richard Branson's private hotel collection Virgin Limited Edition to launch a new joint-venture wine business in South Africa's Franschhoek region. Litmus' founder and director John Worontschak, and VLE's managing director, Jon Brown, talked to about the venture and what it will mean for the Surrey-based business. 

The new venture marks a step up in Litmus's operation, which was started as a wine-making consultancy business in 2008. The idea was to leverage Worontschak's winemaking expertise and international contacts - he started in the Australian wine industry in 1997, and built his career in Australia, California, South Africa and Europe and as a 'flying' winemaker after settling in the UK - to provide wine businesses with "the complete package". The company offers practical skills in wine-making, bottling, packaging and marketing as well as consulting on the structure of the business, developing the right styles for the market, environmental sustainability and accreditation. 

Its first major client was premium English wine brand Denbies, for whom it makes wine under contract but also handles external and international sales. It also acts as a contract winemaker to other English vineyards, has its own brand of English wines, and as a consultant to wineries in Israel, Mexico, China, South Africa, Russia and Portugal.

Who did the joint-venture come about?

JW: What we started at Denbies is very interesting to this project. They outsourced their winemaking and sales to us, but we have no financial input with Denbies, we are a consultant - this joint-venture is slightly different [and develops that relationship].

The company is Mont Rochelle Winery Ltd and its raison d'etre is to provide fantastic wines and sell them. It is pretty straightforward, really!

JB: VLE is Richard Branson's collection of private resorts - a small and beautiful collection of upscale properties owned by Richard and he takes a very personal interest in what happens there. Started in 2000, it is growing steadily and surely, developing lovely resorts. It includes two private islands, a property in the mountains in Kenya, a game reserve and a ski lodge so we were looking to expand, but for the right kind of property to complement the collection. Mont Rochelle was a lovely opportunity in a wine region, with its own vineyard which lent a nice twist to what a hotel can offer. But we are not winemakers and we needed help and expertise, so we set about finding a partner.

So how does the joint-venture work?

JB: The most succinct way of putting it is that it is a back of house and front of house arrangement. John and Litmus provide all the expertise for running the winery, we input marketing and positioning of the property itself, which is critical to us - we needed to reflect that quality and what our clients would expect.

JW: Litmus are shareholders of the joint-venture and the joint-venture pays Litmus wines for its consultancy services and LVE for its marketing. So it is arms-length.

What are you growing and what are your intention on the wine side?

JW: The vineyard is 12.5 hectares and there is a mix of grape varieties, predominantly Cabernet Sauvignon, chardonnay.... The vineyard is in pretty good shape and is a nice age, but we will be replanting. Obviously the vineyard itself if not part of the joint-venture, but the joint-venture company will be purchasing all the fruit from the estate. Litmus will give advice on vineyard restructuring, and planting but has no financial interest in the vineyard itself, which is part of the Mont Rochelle Hotel.

JB: That is where the symbiotic relationship flourishes - we need that kind of input as well, so it is a good, close working relationship.

What work has been done so far?

JW: In the last six months, we've been tidying up and making it a lean, mean fighting machine ready to make really great wines.

The initial investment was around ZAR 5m rand and that has been mostly spent. We redid the flooring and drains of the winery, which were in bad state of repair, and the water so that a pipe runs into the main sewage system. We refurbished the barrel room with automatic humidity and temperature control, and repaired the warehouse and flooring and installed refrigeration. We also bought variable volume tanks as we will be making many more smaller, ultra-premium batches.

Very fortunately, we were able to secure the service of the previous winemaker Dustin Osborne, who did the 2008 vintages. The winery hadn't had the investment [it needed] and Dustin left in 2010 because he felt he couldn't fulfil the potential of the estate. But he came on board in November and he has just finished the last crushing of the Cabernet Sauvignon three days ago, so one malolactic is over, we are about to do the blending. We are working together very closely with him - he is very hands on in the winery and absolutely brilliant.

What wines are you going to make?

JW: We want to make three different ranges. Firstly there will be an entry level range. There is currently an entry level wine called Artemis, but we are working on a new name - as we felt 'Artemis' was a bit staid) and the wines will also change, but we will do a red and a white that is accessible and sold quite young.

Franschhoek is an interesting area as there is a huge difference between the vines on the flat and those on the slopes. There are higher yields on the clay flats, but not such good quality, but the granitic slopes have better drainage and the quality is much higher.

Then there's the Mont Rochelle range, which will really focus on being Franschhoek-driven, offering complicity through the terroir and using modern minimalist intervention, so the Chardonnay will be barrel-fermented, lees work and minimal handling.

Then the top wine range is the Miko - an ultra-premium wine that will mainly be sold in the restaurant at Mont Rochelle and other exclusive markets. It will be small parcels of very good wines and blends, the structure of the blends changing year on year according to the quality of the harvest.

JB: The wine is named after the previous owner, who died four or five years ago. He was the first black owners of a vineyard in South Africa and we wanted to keep his legacy and his name to pay him homage. The main restaurant in the hotel is also named after him.

How much will you produce?

JW: We will make as much of the Miko as possible but in an ideal world it will be about 15% of the production, while 40% will be entry level range and the rest Mont Rochelle.

We will make around 80k bottles this year, but hope to get to 200-250 by the end of it. We may possibly do some contract wine-making as the facility is capable of producing around 200 tonnes and we will head towards that.

Where will your chief markets be?

JW: Previously the winery had a lot of customers in Netherlands and Germany but not so much in the UK, and in the first stages, we are approaching the winery's previous customers. We were at Prowein last week and met many of the previous customers who are keen to rekindle the relationship. There was been big interest at Mont Rochelle, which has already resulted in orders for the older wines.

Obviously because of Litmus wines expertise in the UK market, we will look to market in the UK too, targeting high end retailers and restaurants.

We will be pushing the UK market quite hard, but the domestic market will account for around 60% of production, with 40% for total export. But it is still very early days.

Are you rebranding?

JW: Any new growths will be rebranded, but we have 2009 and 2014 wines that we bottled at the end of February that were blend in November and bottled at the start of the harvest. There are a lot of wines being stores well 2007-8 will be re-released - as reserve wines - they are drinking very well as there was a huge focus on quality. It is good that we have both a reserve of great old wines, and are going forward with the new styles. So we have a museum range to be released that has some history.

Anything that wasn't any good we sold as bulk.

Presumably the new joint-venture will boost Litmus Wines' overall business?

JW: Absolutely, we are excited about that. I think the company is a natural progression and a unique model. We could easily have been consultants for Mont Rochelle but the difference with this is that we are investing our own resources into this venture and what better way to make it worth than if you are a partner?

Where do you see the business going over the next few years?

JW: Litmus is consolidating at the moment and growing very quickly - we have people on the road selling to restaurants, which is a big focus for us. Turnover was around £400k last year but the next stage is £1m within two years. But you have to grow to a certain size before you can do that. We have three employees at the moment, we want to be at five - with another sales persona and another winemaker. Also, you need to bring in the right people of the job - for example Dustin is the resident winemaker at Mont Rochelle and is a very important part of the team, just as Matthieu is crucial to Denbies, without a doubt.