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Vincor’s joint ventures

Vincor’s joint ventures

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.

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.”

Until a new winery is created in the vineyard, the wines are being made in a cuverie specifically designed and constructed on the side of Vincor’s large Oliver winery. The winemaking process for Osoyoos Larose utilizes a sorting table for the hand-harvested fruit, gravity flow for racking, and 10 unique, cone-shaped fermentation tanks. Custom-designed by Alain Sutre so that the height is the same as the diameter, the shape creates an optimum size for the exchange surface and between the must and the cap, and is ideal for limiting temperature fluctuations and reducing problems with the yeast.

“They make wines differently than we are used to,” Triggs said. “For example, they leave the wine to sit on the lees for much longer, so the tannin molecules extend in length, making them softer to the palate in the near term, but still retaining the wine’s longevity. Such practices have made a profound impact on how we make Cabernet Sauvignon in our Oliver facility.”

In 2002, the joint venture invited classically trained Bordeaux wine-maker Pascal Madevon, the former technical director of Chateau La Tour Blanche, to move to the Okanagan and become the resident winemaker and vineyard manager at Osoyoos Larose. “The decision to relocate from the Medoc with my family was made after spending three months working with the Vincor team during the late harvest of 2001,” Madevon said. “Picked from vines planted in 1999, I was surprised by the fantastic quality and ripeness of the fruit.” The 2001 vintage–the first for Osoyoos Larose–produced 2,200 cases of wine that sold out in 73 days at healthy prices.

Madevon works under the direction of Groupe Taillan consultant Alain Sutre, but is solely responsible for daily management of the vineyards and wine facility in Oliver. Part diplomat, he has had no difficulty adapting to both cultures. “The French are more structured, more class-conscious, while Canadians are more open and give the winemaker more freedom,” he commented.

Le Clos Jordanne In Ontario

The classic Burgundy varieties Chardonnay and Pinot Noir are the exclusive focus of another, larger joint venture. Le Clos Jordanne is a major “domaine” or vineyard on Ontario’s Niagara Peninsula, Canada’s largest quality-wine producing region. “We have teamed up with Boisset because we believe that the Niagara Peninsula has the best potential for producing ultra-premium Canadian VQA wines from Burgundy’s classic varieties,” according to Triggs. By far Burgundy’s largest merchant, Boisset owns of controls an impressive line-up of wine houses in Burgundy, as well as the Rhone and the Languedoc, and is involved in projects in Canada, California and South America.

The Boisset-Vincor partnership acquired and developed four sites on the gently sloping Jordan Bench of the Niagara Escarpment. They cover more than 200 acres of prime vineyard land, of which 133 acres are planted, with approximately 75% dedicated to Pinot Noir and the rest Chardonnay. “Studies show that our Niagara properties enjoy similar soil and climatic characteristics to the Cote d’Or in Burgundy, with its cooler summers, equivalent growing cycles and clay loam soils,” said Jean-Charles Boisset, vice president of Boisset.

The principal 35-acre vineyard on Highway 81 was first planted in 2000 with vines shipped from a nursery in Burgundy. The viticultural team, comprised of noted French experts and Boisset winemaker Pascal Marchand, adopted the traditional approach to plant spacing and trellising that is practiced in Burgundy, significantly lowering yields per vine to improve quality. Although wines will not be released until 2006 at the earliest, production of an experimental wine in 2004 proved the point. “Despite a difficult summer, the grapes were picked at 22-24[degrees] Brix, and produced a fabulous wine,” Triggs said.

The winemaking team at Le Clos Jordanne consists of three Canadians from Quebec, each of whom has at different times studied viticulture and enology in Beaune in Burgundy. The chief winemaker, Pascal Marchand, was hired by Jean-Charles Boisset to take over winemaking duties for all Boisset’s vineyard holdings, later known as Domaine de la Vougeraie. Marchand’s team includes Thomas Bachelder and Isabelle Roy-Meunier.

“They know each other and they are all passionate about Pinot Noir,” Triggs said. “But there is an edgy side to their approach: They are practicing organic farming at Le Clos Jordanne, definitely not part of the mainstream in Niagara–or Burgundy, for that matter.” A spectacular new winery designed by Toronto-born/Los Angeles-based architect Frank Gehry is currently under construction and scheduled for completion in 2006. Sited at the center of the principal 35-acre vineyard and surrounded by environmentally protected forest and woodlands, the multi-level, gently flowing structure will combine both inspired design and state-of-the-art technology.

Nk’Mip Cellars

Unlike the joint ventures with the large French companies, Nk’Mip Cellars grew out of a long-standing business relationship with Osoyoos Indian Band (OIB). The arrangement includes the leasing of a large commercial winery facility for Jackson-Triggs Okanagan wines in Oliver, purchasing grapes from the band’s own stellar 240-acre Inkameep vineyard near Oliver in the South Okanagan, and, more recently, leasing in excess of 850 acres of land from the OIB for vineyard development along the eastern shores of Lake Osoyoos. For its part, the band has achieved zero unemployment and a strong business base under the progressive leadership of Chief Clarence Louie.

The band wanted to establish a winery as part of a destination desert resort and heritage center, and approached Vincor in 1999 with the idea of a joint venture partnership. “The band lacked the expertise to embark on a project of this nature on its own,” said Chris Scott, chief operating officer for the OIB Development Corporation. “The band provided the land and financing, as well as staff, taking a calculated business risk to get the project off the ground. In turn, we receive jobs–two-thirds of the Nk’Mip employees are native–training in the winemaking and hospitality professions, and Vincor’s established expertise in winemaking and marketing.”

Opened in 2002, the stunning winery, combining state-of-the-art technology and native art, blends into the wild sage desert surroundings. Wine-maker Randy Picton said the winery’s 21-acre vineyard started producing Merlot and Cabernet Sauvignon in 2004. It also sources grapes from the band-owned vineyard near Oliver and Vincor’s leased site in Osoyoos. In the two and a half years since the launch of Nk’Mip, the winery has nearly reached its capacity of 15,000 cases, winning awards for its wines from the beginning.

“We have been pleasantly surprised with the quality of the wines and the success of the Nk’Mip project,” Triggs said. “It takes a high level of commitment and trust, because those within a First Nations community see themselves not simply as entrepreneurs but, first and foremost, as custodians of the land.”

According to Triggs: “The measure of Vincor’s joint ventures is how far we can move the envelope forward in learning more every year about working with the fruit. To do this, adopting a win-win philosophy and keeping our minds open and flexible are absolutely essential.” A noble pursuit in the hard-nosed world of business.

(Michael Botner is a wine writer and consultant in the Okanagan Valley. He also owns Accounting for Taste bed and breakfast inn. Contact him through edit@winesandvines.com.)

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