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From investment management to investment madness?
Graham Nutter, the owner of the Chateau St Jacques d’Albas vineyard in France, on why and how he got into the wine business.
I’m forever being asked “what got you into the wine business?” and “were you in the wine business before?” Well, the first question is easier to answer, as wine has always been a passion for me. My interest in wine started during my university days at Cambridge, where I was introduced to the cellars of Trinity College by a friend of my father, who insisted that I partake of their treasures once a month at a dinner with him. Difficult to resist, eh? Since then, wherever I’ve lived, I’d always be sniffing around cellars, doing wine tastings, etc. But we all need an epiphany moment too and mine was a visit to Chateau Figeac, St Emilion, in 1974, when the owner gave me an afternoon of vineyard walk, talk and tastings. After that, it was just a question of when could I get started with such a lifestyle.
Investment banking
After university, my first employment was at JPMorgan (then Morgan Guaranty Trust) which had started taking graduates from Europe. We were plunged into the New York training programme and cash-flow statements of AB Volvo. I spent all my subsequent years in the investment function, largely in Paris and London. There was a subsequent spell at Fidelity International, followed by time at Scudder, Stevens & Clark (a US-based private firm). When Scudder was taken over, I was given the chance to entertain our future folly.
Taking a gamble
I entered the wine business in 2001, with the purchase of Chateau St Jacques d’Albas (pictured below) in the Languedoc in an appellation called “Minervois”. Not well known internationally, certainly compared to Bordeaux, so a bit of a gamble, but I’ve always been inclined to “buy when cheap, not expensive”. The Languedoc has been called the “California of France”, where new faces and fresh capital are changing (for the better) the quality of the wine which is still at a reasonable price, at least compared to Bordeaux and Burgundy. But then it should also be said that our region will never make wines to compare with the great names of the two “B”s, prices of which do exercise a pricing umbrella we cannot surpass.
Learning the tools of the trade
The learning curve since 2001 has been incredibly steep. One has to read, listen and question, as well as get one’s hands dirty, either in the fields or in the cellars, all the time. Being a vigneron is a curious multi-task vocation. You’re a farmer for 12 months, a biochemist for six to eight weeks during and after harvest, as well as being a salesman/marketer for the whole year. And on top of that, you are in the lap of the Gods regarding the weather prior to and during harvest, thus having no control over the key variables in this business.
Rebuilding an asset
After a major restoration of the property, replanting of many vine fields, and building and equipping a winery and underground cellar, the major physical and “controllable” tasks are now behind us. Anyone entering this business should not underestimate the costs involved in rebuilding an asset essential for day-to-day operations but which has a minimal return on capital. What most outside observers don’t appreciate is the time between ripping up old or unsuitable vines, letting land lie fallow to recover, replanting and achieving a first, albeit small, harvest – a minimum of six to seven years. It’s longer than for a law degree. In short, the whole business is capital intensive with little return, demands seven to ten years to become established and you have little control over the major input, ie the weather. An accountant would call it investment madness. Perhaps you can now understand why farmers moan so much.
The gamble pays off
All that aside, it’s probably fair to say that, in spite of everything, we are now established as one of the better producers in the Minervois, regularly winning awards for our reds (95 per cent of production, with the balance in rosé and white wines). If you focus on quality, make the necessary investments in material and agriculture, and remain super critical of one’s product, it’s not too difficult to make a decent wine today – and almost anywhere in the world – which means that consumers today have unparalleled choice and at attractive prices.
The most difficult part of the past ten years though, and which I seriously underestimated, was the establishment of a sales network to sell our product. France is awash with wine – and consumption is in a secular decline for all sorts of reasons. By contrast, markets in North America, northern Europe and northern Asia are expanding, as wine becomes more “chic”. It is also seen as healthier than beer and spirits but consumption per capita starts from very low levels. India is the most recent case where the government is actively encouraging wine over hard alcohol consumption and now represents an exciting prospect for us. To access and be successful in these markets has taken much longer than expected – and has involved considerable time, travel and money. We now export approximately 80 per cent of production to over 12 countries, with the USA becoming our largest market, notably in New York and California. India is also taking off this year and where I am happy to be associated with two retired Indian Army Brigadier-Generals. If we succeed in selling our wine in the staff canteens of the Indian army, I’ll have a story to dine out on for many months.
Our wines
Minervois is largely red (95 per cent) and historically known more for its quantity than its quality. New owners and fresh approaches have led to a significant improvement in the quality and hence reputation of the wines; severe pruning to lower yields, wider use of Syrah and Grenache over the traditional Carignan workhorse of the region, later harvesting, destemming, lower use of chemicals, etc. Wine writers such as Jancis Robinson and Rosemary George have long recognised the area’s potential and which is now being accepted in France by more modern writers and tasters. The wines, due to their multi-varietal blend, can be more complex than traditional Bordeaux, for example, with notes of “nutmeg, black peppar, thyme and olives” to quote one writer. And with age, the notes turn to “dates and prunes”. Quite multi-dimensional and very food friendly. Remembering that Minervois has to have a minimum of two varietals (a government historical requirement), look for one with a 30-50 per cent backing of Syrah (the balance in Grenache, Mourvèdre and a dollop of Carignan) to start and then move onto different blends to appreciate the changes in style and in vintage. Many Minervois will give Rhone wines serious competition – and at much lower price.
An agreeable lifestyle
It has to said though that the wine industry is an entertaining one, as most characters I meet are outgoing, convivial and a tad extrovert. Not many monks in this business. You don’t make much money at it, however – unless you are at the Chateau Lafitte end-of-things – so don’t enter this world to obtain 20-30 per cent returns. We’ve rejuvenated our address books, are kept very busy and get a lot of satisfaction. I get the greatest kick at summer evenings when we do concerts, both classical and jazz, and see the place jumping and wine sales going strong. Plans for the future essentially revolve around consolidating on what we have built, growing sales with our clients around the world and working to raise the profile of the Minervois region and its wines. It’s a full agenda.
Graham Nutter is the owner of the Chateau St Jacques d’Albas vineyard, Minervois, France
Buying the wines
For more information on St Jacques d’Albas visit www.chateaustjacques.com. The vineyeard is open most days to welcome visitors to tour and taste. The wines can be purchased via Goedhuis & Co in London (tel: 0207 793 7900) or Stokes Fine Wines in Hampshire (tel: 01256 8976 4001).
I’m forever being asked “what got you into the wine business?” and “were you in the wine business before?” Well, the first question is easier to answer, as wine has always been a passion for me. My interest in wine started during my university days at Cambridge, where I was introduced to the cellars of Trinity College by a friend of my father, who insisted that I partake of their treasures once a month at a dinner with him. Difficult to resist, eh? Since then, wherever I’ve lived, I’d always be sniffing around cellars, doing wine tastings, etc. But we all need an epiphany moment too and mine was a visit to Chateau Figeac, St Emilion, in 1974, when the owner gave me an afternoon of vineyard walk, talk and tastings. After that, it was just a question of when could I get started with such a lifestyle.
Investment banking
After university, my first employment was at JPMorgan (then Morgan Guaranty Trust) which had started taking graduates from Europe. We were plunged into the New York training programme and cash-flow statements of AB Volvo. I spent all my subsequent years in the investment function, largely in Paris and London. There was a subsequent spell at Fidelity International, followed by time at Scudder, Stevens & Clark (a US-based private firm). When Scudder was taken over, I was given the chance to entertain our future folly.
Taking a gamble
I entered the wine business in 2001, with the purchase of Chateau St Jacques d’Albas (pictured below) in the Languedoc in an appellation called “Minervois”. Not well known internationally, certainly compared to Bordeaux, so a bit of a gamble, but I’ve always been inclined to “buy when cheap, not expensive”. The Languedoc has been called the “California of France”, where new faces and fresh capital are changing (for the better) the quality of the wine which is still at a reasonable price, at least compared to Bordeaux and Burgundy. But then it should also be said that our region will never make wines to compare with the great names of the two “B”s, prices of which do exercise a pricing umbrella we cannot surpass.
Learning the tools of the trade
The learning curve since 2001 has been incredibly steep. One has to read, listen and question, as well as get one’s hands dirty, either in the fields or in the cellars, all the time. Being a vigneron is a curious multi-task vocation. You’re a farmer for 12 months, a biochemist for six to eight weeks during and after harvest, as well as being a salesman/marketer for the whole year. And on top of that, you are in the lap of the Gods regarding the weather prior to and during harvest, thus having no control over the key variables in this business.
Rebuilding an asset
After a major restoration of the property, replanting of many vine fields, and building and equipping a winery and underground cellar, the major physical and “controllable” tasks are now behind us. Anyone entering this business should not underestimate the costs involved in rebuilding an asset essential for day-to-day operations but which has a minimal return on capital. What most outside observers don’t appreciate is the time between ripping up old or unsuitable vines, letting land lie fallow to recover, replanting and achieving a first, albeit small, harvest – a minimum of six to seven years. It’s longer than for a law degree. In short, the whole business is capital intensive with little return, demands seven to ten years to become established and you have little control over the major input, ie the weather. An accountant would call it investment madness. Perhaps you can now understand why farmers moan so much.
The gamble pays off
All that aside, it’s probably fair to say that, in spite of everything, we are now established as one of the better producers in the Minervois, regularly winning awards for our reds (95 per cent of production, with the balance in rosé and white wines). If you focus on quality, make the necessary investments in material and agriculture, and remain super critical of one’s product, it’s not too difficult to make a decent wine today – and almost anywhere in the world – which means that consumers today have unparalleled choice and at attractive prices.
The most difficult part of the past ten years though, and which I seriously underestimated, was the establishment of a sales network to sell our product. France is awash with wine – and consumption is in a secular decline for all sorts of reasons. By contrast, markets in North America, northern Europe and northern Asia are expanding, as wine becomes more “chic”. It is also seen as healthier than beer and spirits but consumption per capita starts from very low levels. India is the most recent case where the government is actively encouraging wine over hard alcohol consumption and now represents an exciting prospect for us. To access and be successful in these markets has taken much longer than expected – and has involved considerable time, travel and money. We now export approximately 80 per cent of production to over 12 countries, with the USA becoming our largest market, notably in New York and California. India is also taking off this year and where I am happy to be associated with two retired Indian Army Brigadier-Generals. If we succeed in selling our wine in the staff canteens of the Indian army, I’ll have a story to dine out on for many months.
Our wines
Minervois is largely red (95 per cent) and historically known more for its quantity than its quality. New owners and fresh approaches have led to a significant improvement in the quality and hence reputation of the wines; severe pruning to lower yields, wider use of Syrah and Grenache over the traditional Carignan workhorse of the region, later harvesting, destemming, lower use of chemicals, etc. Wine writers such as Jancis Robinson and Rosemary George have long recognised the area’s potential and which is now being accepted in France by more modern writers and tasters. The wines, due to their multi-varietal blend, can be more complex than traditional Bordeaux, for example, with notes of “nutmeg, black peppar, thyme and olives” to quote one writer. And with age, the notes turn to “dates and prunes”. Quite multi-dimensional and very food friendly. Remembering that Minervois has to have a minimum of two varietals (a government historical requirement), look for one with a 30-50 per cent backing of Syrah (the balance in Grenache, Mourvèdre and a dollop of Carignan) to start and then move onto different blends to appreciate the changes in style and in vintage. Many Minervois will give Rhone wines serious competition – and at much lower price.
An agreeable lifestyle
It has to said though that the wine industry is an entertaining one, as most characters I meet are outgoing, convivial and a tad extrovert. Not many monks in this business. You don’t make much money at it, however – unless you are at the Chateau Lafitte end-of-things – so don’t enter this world to obtain 20-30 per cent returns. We’ve rejuvenated our address books, are kept very busy and get a lot of satisfaction. I get the greatest kick at summer evenings when we do concerts, both classical and jazz, and see the place jumping and wine sales going strong. Plans for the future essentially revolve around consolidating on what we have built, growing sales with our clients around the world and working to raise the profile of the Minervois region and its wines. It’s a full agenda.
Graham Nutter is the owner of the Chateau St Jacques d’Albas vineyard, Minervois, France
Buying the wines
For more information on St Jacques d’Albas visit www.chateaustjacques.com. The vineyeard is open most days to welcome visitors to tour and taste. The wines can be purchased via Goedhuis & Co in London (tel: 0207 793 7900) or Stokes Fine Wines in Hampshire (tel: 01256 8976 4001).
From investment management to investment madness?
Graham Nutter, the owner of the Chateau St Jacques d’Albas vineyard in France, on why and how he got into the wine business.
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