Focus - Les Vignobles Foncalieu Fights "Old Fashioned" Industry with Premium Jump
Foncalieu owns 5,100 hectares in the Languedoc Roussillon wine region
Wine cooperative Les Vignobles Foncalieu is taking some bold steps towards premiumisation. Andy Morton visited the company in southern France to find out where that journey is taking it.
Gabriel Ruetsch, the chief viniculturalist for Les Vignobles Foncalieu, stands in La Garrigue vineyard and talks about his first visit some 13 years before.
The one-hectare site was not looking good - cluttered vines and overgrown canopies predominated, and grape quality had suffered as a result, he recalls. Today, the ordered lines of syrah that tumble gently down towards the sea in this corner of the Languedoc Roussillon wine region stand in testimony to Ruetsch's, and vineyard owner Myriam Roussel's, hard work.
But they also represent for Ruetsch's employers at the wine cooperative a new direction. As wine supplies soar and margins are squeezed, and as new investment from China threatens to change the financial rules of wine growing in France, Foncalieu is attempting to move away from its roots as a bulk supplier of wine to an owner of premium labels. La Garrigue is one of 40 hectares out of the 5,100 Foncalieu controls that have been invested in to contribute exclusively to Foncalieu's Great Wines portfolio - four premium wine labels that the 46-year-old collective hopes will compete in the higher-margin categories and help drive up profits.
Driving that change is Michel Bataille, who since he became head of Foncalieu in 2001, has seen the company's fortunes stagnate against the backdrop of a declining market. Last year, Foncalieu sold 22.2m bottles, just 70,000 more than it did in 2002. Sales over the same ten-year period increased by just 15%.
The Great Wines portfolio with its average EUR20 (US$27) per bottle price tag, Bataille reasons, will help Foncalieu's union of members find better margins as demand for prestige labels proves the most resilient among consumers.
Foncalieu head Michel Bataille says he is fighting against the French wine industry's “old-fashioned” ideas
Alongside a EUR20m investment across all of its cooperative growers and winemaking partners, Foncalieu has sunk about EUR300,000 in new harvesters and storage vats for the Great Wine vineyards. The 15 growers included in the project, such as La Garrigue's Roussel, meanwhile receive far higher returns from Foncalieu for their grapes they grow on their premium vineyards - around EUR8,000 per hectare.
Foncalieu has also bought a new vineyard in the area that comes with its own château, Château Haut-Gleon. As well as supplying the premium Haut-Gleon label, the château will serve as a conference and hotel for Foncalieu clients.
But despite the increased investment, it has not been an easy transition - Foncalieu is made up of 1,200 wine growers, each with their own ideas on how the cooperative should operate.
Bataille, a combative former rugby player, says he has had to fight what he calls the French wine industry's “old fashioned” ideas.
“They want tranquillity and quietness,” he says of some of his members. “But in the world today there is no quietness.”
It is Chinese money that is making the most noise in the French wine industry as it buys up struggling vineyards and, as far as Bataille is concerned, snuffs out competition. In Bordeaux, Chinese investors have acquired around 30 estates over the past five to six years.
“Profitability for them is not as important as it is to us,” he says. “If someone comes in to make fair competition, then that's fine. But what can happen is that a company comes in and can spend EUR10-20m upgrading equipment. We can't do the same.”
Despite the challenges, Bataille is winning over the Foncalieu union. Even as one of the 15 growers included in the Great Wines project, Romain Torrecilla was not initially convinced that the Château Haut-Gleon purchase fitted in with Foncalieu's heritage. “Was it the right thing to do?” he asks. “But once I'd visited it and seen how it could help us to give a different view of Foncalieu I agreed that we had to do it.”
All that remains to be seen now is what the Great Wines can do for Foncalieu's bottom line. In the UK, Foncalieu's main overseas market with 40% of exports, early demand has been strong. According to Foncalieu's UK sales manager Marie-Annick Consola, in the past few weeks, the portfolio has secured some important distribution, especially in restaurants. Foncalieu's overall sales for the year so far are up 39% year-on-year in the country.
“Haut-Gleon is just starting but feedback is good on that range too,” Consolo adds.
Back on the hill at La Garrigue, Gabriel Ruetsch is also bullish about the wine he put so much focus on over the past few years. He admits the cooperative still needs to sell more before the project can be considered a success, but is happy with the move into premium wines. Already he is considering other vineyards that can join the project. “We could be at the start of something special,” he says.
Les Vignobles Foncalieu – an overview
- Founded: 1967
- Became a Union of Cooperatives in 1992
- Surface area under vine: 5,100 hectares
- Number of associates: 1,200 winemakers
- Headquarters: Arzens, near Carcassonne
- Staff on site: 85 employees
- Export: 80% of total production to 21 different countries
- Primary markets: UK, Germany, Netherlands, Scandinavia, China
Appellations: Languedoc, Languedoc Crus (Pic Saint Loup, Picpoul de Pinet), Corbières, Corbières-Boutenac, Minervois, Cabardès, Côtes-du-Rhône, Côtes-du-Rhône-Villages Laudun, Côtes-du-Rhône-Villages St Gervais, Coteaux d’Aix-en-Provence, Saint Chinian
Key members: the Vignerons du Pays d’Enserune in Maraussan, the Celliers du Nouveau Monde in Puichéric, the Vignerons de la Cité near Carcassonne, the Cave de Baixas, the Cave de Saint-Gervais in Côtes-du-Rhône Gardoises and the Vignerons de Rognes in Coteaux d’Aix
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