Distell spins off wines unit
Libertas Vineyards and Estates will house portfolio of premium wines
Distell, which owns brands such as Nederburg and Durbanville Hills has launched a stand-alone company to drive global sale of its premium wines.
The formation of Libertas Vineyards and Estates represents a shift from Distell’s previous model in which premium wines were managed as a division within the company’s large portfolio.
Kay Nash, MD of Libertas Vineyards and Estates, said on Tuesday the move would sharpen the global penetration of Distell’s premium wines.
“Distell is a multicategory company. We have learnt that premium wines require special focus. This requires a special set of skill. The establishment of Libertas Vineyards and Estates gives us space to focus on premium wines. Distell can also concentrate on other things,” Nash said.
Libertas Vineyards and Estates is a wholly owned subsidiary of Distell, the global producer of wines, spirits and ciders.
Nash said the move out of Distell and the creation of an independent board of directors would support focus on the premium and fine wine category.
“We are making bold decisions regarding how we operate and compete and Distell with their strong wine DNA are championing the need for a new approach. There is recognition that the category is challenging and inherently complex and requires a specialist focus, different culture and entrepreneurial approach,” she said.
The portfolio of brands that will be housed in Libertas Vineyards and Estates include Alto, Nederburg, Durbanville Hills, Plaisir de Merle, Pongrácz, Fleur du Cap and Allesverloren as well as the heritage assets of Chateau Libertas, Zonnebloem and the Tabernacle.
Distell said the new business would revitalise the Oude Libertas site, which would be the new home for premium wine in Stellenbosch.
Nash said the new company’s immediate focus was to review its large portfolio. She said Libertas Vineyards and Estates had to streamline its portfolio because it operated in a complex category. “The cost of this complexity is significant and it hinders our ability to focus and support winning propositions,” she said.
The company’s priority was to ensure that its products thrived in the market. “You want to make sure that the brands you put in the shelves succeed,” said Nash.
Libertas Vineyards and Estates’ current portfolio includes eight brands and 40 subbrands operating in 88 markets globally.
Nash said the company had started to consolidate the secondary production from four sites to a single site at Nederburg in the Western Cape in a move to ensure an efficient supply chain.
In its 2018 annual report, Distell said its strategy to focus on core brands such as Nederburg, Drostdy-Hof and Durbanville Hills had yielded positive results in the year ended June 30 2018.
“The disposal of noncore brand assets and the creation of a dedicated premium wine business unit are expected to further enhance this category,” Distell said in the report.
Distell pointed out the modest growth in international markets in the past financial year. It said its pursuit for growth in international markets such as Europe, US and Asia Pacific will focus on the premium portfolio, “emphasising the intrinsic qualities of our brands”.
Distell’s other brands include Savanna, Amarula and Viceroy.
Distell shares on Tuesday gained 3.25% to R114.61.