New Zealand’s export wine industry can be a fickle master at the best of times. It requires innovative thinking and real tenacity – qualities the owners of Toi Toi Wines have in spades.
By Glenn Baker.
With the benefit of hindsight, March 2006 may not have been the best time to launch yet another wine brand onto the international market. If the two founders had known the Global Financial Crisis (GFC) was just around the corner, one wonders if they would’ve been so eager to jump into the cauldron.
As it turns out, Kevin Joyce and Andrew Bonner were more than up for the task. Marlborough Wine, the producer of Toi Toi wines, would flourish because its owners had the skills and experience to steer them through the choppy waters.
Marlborough Wine Limited is essentially a family business, held and managed by the Joyce and Bonner families, with Kevin and Andrew as directors.
Kevin is a chartered accountant and was acting CEO/commercial manager for Tohu Wines prior to establishing Marlborough Wine. His strong commercial and finance skills and experience in the local wine industry have been key contributors to the business’s success.
Andrew is a former MD of Foster’s Group New Zealand and the South Pacific. With more than 22 years sales and marketing experience in the liquor industry, his strategic marketing and sales skills enabled the company’s brands to become quickly established in export markets.
“The great thing about our skill sets is that they are complementary, so we both bring a different perspective to the business. Fortunately we both also have enough experience to understand that neither of us is always right!” says Andrew.
Like most Kiwi wine companies Marlborough Wine wants to over-deliver on the quality of its wine for the price. Perhaps its biggest point of difference is that it is not afraid to operate in the commercial end of the market.
“The majority of wines sold are under $20 and we’re happy to operate with the majority of our portfolio in this space,” explains Andrew. “We’re also not afraid to try new wine styles and innovate.”
Looking back, the toughest challenge for the two directors was indeed the GFC.
“It tested us,” admits Andrew, “but it also affirmed the strength of our team with Kevin’s ability to manage costs and keep across the financial detail and my long-term relationships within the global wine industry.
“The fact we had chosen not to go down the traditional wine company route of owning multiple vineyards and a winery also held us in good stead during this difficult time.”
The wine industry has always been a tough master and Andrew doesn’t expect this will change. It’s agriculturally based and therefore vulnerable to the weather, he says. It has always suffered from under- and over-supply issues. Indeed sourcing grapes can be the biggest challenge.
“The nature of the market means pricing for grapes can fluctuate enormously and so being able to produce a quality finished wine at a consistent price is a continual challenge,” says Andrew. “Part of that challenge is tied up in production planning and, while we do plan ahead, we also need to have the ability to respond to changes in demand and that can really test us!
“Retailing is changing too. The rise of online [wine] sales is impacting some traditional paths to market. While we’re fortunate to work with partners who have adapted to this and evolved their business model, this isn’t the case for all distributors,” says Andrew.
Innovation pays
It’s true that generating new sales is a challenge in the wine industry, but Andrew and Kevin are thrilled that being prepared to innovate has paid off for their brands.
“We were the first wine company to sell sparkling sauvignon blanc in Australia and the first to take a sparkling rosé to market,” says Andrew.
“Earlier this year we introduced ‘Hidden Treasure’ – a Marlborough sauvignon blanc with a dash of pinot noir. We’ve been successful in having it ranged in Australia and we’re looking forward to seeing the response over summer.”
The company’s innovative stance has produced excellent results in regards to international awards and accolades too, including:
- San Francisco International Wine Competition 2015 – Double Gold and Best Sauvignon Blanc for Toi Toi Marlborough Sauvignon Blanc 2014.
- International Wine and Spirit Competition 2013 – Gold Medal for Toi Toi Marlborough Reserve Riesling 2012.
- San Francisco International Wine Show 2013 – Double Gold for Toi Toi Central Otago Clutha Pinot Noir 2012.
- International Wine and Spirit Competition 2011 – Gold Medal and Best in Class for Toi Toi Marlborough Riesling 2010.
Contacts the key
Exporting is a challenge. Andrew reminds me that there’s a plethora of New Zealand wineries, many owned by multinationals, with global distribution and often their own sales forces.
New players struggle to find distributors because the majority of distributors already have New Zealand brands within their portfolios, he says.
Nevertheless 90 percent of Marlborough Wine’s business is export. “This is because we had a clear opportunity in mind when we started and existing relationships globally that we could leverage. What’s more, we’ve recognised we need to work with people who are prepared to work through the detail of importing a product and successfully distributing it,” says Andrew.
“As with any business, relationships are key. Without contacts in the market to start with I would expect it’s practically impossible for companies to gain any support.”
Being truly customer-driven is crucial. “We know strong partnerships mean better business,” says Andrew. “We listen to our overseas distributors and when that means collaborating with them to create bespoke wines or release new Toi Toi wines we go out of our way to make it work.”
Both directors work in the business so customers and suppliers are always dealing with a principal, “which means they always have someone who cares and can make a decision”, says Andrew. “Although on the downside it may mean we’re hard to pin down, as we’re very busy! On that note another lesson we’ve learned is to employ qualified people to assist us where we’re not so strong. We’re extremely lucky Chris Young joined the team in 2008 as our winemaker.”
Going forward, the main focus is on the US and UK.
“We believe Toi Toi hasn’t reached its market potential in these two countries and that’s where we’ll see the growth for us in the coming years,” says Andrew.
