22 | FORBES ASIA OCTOBER 2017
the Crawfords sold the label—but not its physical assets, which
by this point included a 45 -hectare block—to Canada’s Vin-
cor International, which itself was acquired three years later by
global drinks giant Constellation Brands.
Between the sale price and a performance-based earn-out
that saw Kim staying on at Constellation until 2 007 and Erica
until 2 009, the Crawfords netted roughly $50 million. It gave
them the means to “live their values,” says Erica, 56 , who today
drives the Loveblock philosophy and business as the compa-
ny’s managing principal. She became interested in organics after
a car accident in her early 3 0s led her to take stock of her health.
Kim, who has been married to Erica for 2 7 years, tagged along,
up for the challenge of using old-world methods to grow grapes
and make wine. “Kim and Erica took a novel path, but it enabled
them to fund their dream, and that’s to have all the elements, the
personality of the brand and control over the way the raw prod-
uct, the grapes, are grown. That embodies a much stronger and
compelling story [than their
original label],” says viticulture
consultant David Jordan.
A ten-year noncompete
clause with Constellation pre-
cluded the Crawfords from
making or selling any wine, but
not from growing grapes. They
went shopping after their sale,
upping their holdings to about
215 hectares, which included
16 0 hectares of undeveloped
hillside and adjoining land in
Marlborough’s Awatere Valley
that is now home to the Love-
block brand. “We couldn’t af-
ford to buy a developed vine-
yard,” says Erica, with Kim,
adding, “It wasn’t realistic. You
might want to buy a vineyard, but it’s very difficult.”
Property values in Marlborough have surged in recent
years, with wine companies and investors hustling to nail
down grape supplies to meet demand. Sauvignon blanc wines
make up more than 85 % of New Zealand’s total wine ex-
ports, which hit a record $1. 2 billion in June. Its biggest over-
seas market is the U.S., which has developed a particular lik-
ing for the crisp, clean taste of Marlborough sauvignons. With
fewer vineyards hitting the market and a dwindling supply of
land suitable for development, vineyard values in Marlbor-
ough have risen sharply over the past year, fetching between
$88,000 and $220,000 per planted hectare depending on loca-
tion, according to Tim Gifford at Colliers International. Land
in smaller and cooler Awatere Valley is cheaper.
Converting the hillside property into vineyard land hasn’t
been easy. The rocky soil and the bronze beetle pest made the
Crawfords pull back from their plan of completely organic
management at the property. Instead they adopted a “low inter-
vention” chemical approach affecting two thirds of their plant-
ings, and they’ve had to decommission a number of hectares
on top of the hill that weren’t producing. Yield is king in the
wine business, both in terms of growing the grapes and the vol-
ume of wine produced, and so any yield loss because of an or-
ganic strategy is really challenging, notes Jordan.
“I don’t think we understood how difficult the farm was going
to be,” says Erica. “But we now have infrastructure and know
what to plant.” So far the Crawfords have put around $8 million
into Loveblock, and despite the slow return on investment, the
label has grown enough to reach a tipping point.
Their estate produces close to 2 7,000 cases of Loveblock
wine annually—the company expects to post $3.7 million in
revenue in the year ending in June—and is on track to dou-
ble that within the next five years, with most of the produc-
tion for export. They see a larger organics business developing
from the farm, including sales of grass-fed beef from their herd
of Angus cattle. “It’s good to break even and to be a base for
the brand,” says Erica. While
Kim and Erica use only their
own grapes to make Loveblock
wine, they also sell their grapes
to others, and Kim runs a sep-
arate bulk-wine business called
Zorro Wines. With more than
90 hectares of their land hold-
ings planted, the Crawfords
now number among the top
10% of the country’s largest
vineyard owners.
They say they weren’t ever
tempted to return to virtual
winemaking with Loveblock;
blending grapes from a variety
of suppliers is now common-
place among brands. “That
model is incredibly profitable,”
says Erica, “but what will your point of difference be? Peo-
ple are looking for provenance in brands. They want to know
where it’s grown, how it’s grown, what has gone into it. And
it’s those under 3 0 who are particularly interested in that.”
Expanding the estate is all about the kids. “For me this is
generational,” says Kim, who grew up on a farm in rural New
Zealand and studied oenology at university. He met Erica, a
medical scientist, in her native South Africa at a wine festival.
Their 23 -year-old son, Rory, is an aspiring winemaker who,
they insisted, must ply his trade outside the family business
until he is 30 ; daughter Pia, 22 , recently graduated from uni-
versity with a science degree.
Kim says the traditional taste of the Marlborough sau-
vignon blanc is different when it has an organics platform.
“The way I explain it is that we’ve developed from our teen-
age years and we’re now middle-aged, so we’re so much
more. We’re not throwing our hormones and testosterone
out there anymore. We’re quite restrained but hopefully a bit
more complex.”FORBES ASIA
LOVEBLOCK WINES
MEANWHILE,
AT KIM CRAWFORDSince taking over Kim Crawford Wines in 2006, New York-
based Constellation Brands has built the label into a power-
house, especially in the U.S. The label posted $229 million
in retail sales in the U.S. last year, making it the top- selling
New Zealand wine brand there, according to U.S. market-
research firm Impact Databank, and the top-selling sau-
vignon blanc. Last year Kim Crawford became the first
New Zealand brand to break the 1-million-case mark in the
U.S., growing 20% from a year earlier to 1.2 million cases.
That represents 25% of the New Zealand wine category.
Kim Crawford is part of a stable of New Zealand labels that
Constellation—the largest exporter of New Zealand wines—
owns and exports to 75 countries. —J.S.W.F