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Ground-breaking empowerment wine
text and pictures: Cassie du Plessis
No wonder that, apart from the executive chairman of Lindiwe Wines, Nosey Pieterse, making a politically charged and emotional speech, there was also a whole array of other prominent black leaders having their say and giving their blessing, including Lynne Brown, local government MEC, Clarence Johnson, Cape Winelands District, Max Maisela of SAWB, Sawit's Charles Erasmus, IDC's Johan van der Rheede and Tyrena Holley of the US Embassy. As well as a pretty daring and mischievous master of ceremonies, Theo Esau of P4 Radio.
ReInvest was established in 1998 with the specific purpose of BEE entry into the wine and spirits industry and it played a leading role in the establishment of Bawsi, an umbrella body with an affiliation of organisations and individuals in the wine industry. Bawsi receives 20% of ReInvest's annual profits for social responsibility projects. Bawsi, in turn, is part of the black empowerment consortium which now owns 25,1% of KWV Group. Nhlanhla Nyembe, programme manager: Investments, of the National Empowerment Fund (NEF), said Lindiwe Wines had taken bold steps to enter into the mainstream business of marketing and distributing its own wine under a truly BEE-owned wine label and funded by the NEF to the tune of R3 million. "NEF's subscribed for 49% of the issued shares, thus sharing the risks with the founders. In addition, the NEF invested in a five-year debt instrument. The NEF intends to exit within a period of seven years from the date of its investment by selling back the shares to the company, thus removing the onerous obligation from the individual shareholders to pay back the NEF. BEE shareholding will be restored to 100% after NEF's exit, thus achieving the transfer of a productive asset to historically disadvantaged persons. "Lindiwe Wines is without a shadow of a doubt among the NEF's successful ventures with a very unique business model. Unlike many BEE transactions in the wine industry which tend to focus on developing production capacity before developing a market for their products, Lindiwe adopted a different approach. When they approached the NEF for funding, the company had already developed a product with an appealing brand that potential customers had guaranteed the uptake thereof. In addition, the company had outsourced the production of its products, thereby avoiding committing a substantial amount of capital investment upfront which also bode well for the potential return on investment. This model is what grabbed the NEF's attention when the proposal was initially presented." Pieterse described the launch as "the epitome of the success of eleven years of democracy ... and of the success of black economic empowerment".
"We have survived the bureaucratic nightmare from getting started to eventually getting our wine on the shelves of the retailers." To date The House of Lindiwe had achieved listings with all the supermarkets in the country and some of the prestigious hotels and restaurants, liquor stores, corporates and government departments. Last year the 2002 Shiraz was listed on South African Airways and Lindiwe had received numerous accolades from Wine-Of-The-Month-Club - including a "Chardonnay-of-the-Month" - out of 51 wines. In January record sales of 2 614 cases were achieved for that month.
The customers - including Pick'nPay, Shoprite/Checkers, Spar, Pick'nPay Hypermarkets and Metro Cash and Carry Group (including 7/11's and Friendly Grocers) - are "partners eager to co-operate and make a meaningful contribution towards transforming representation in the South African economy. "The challenge for emerging black-owned businesses is to get their wines off the shelves. To achieve this, a dynamic brand building campaign is required. This is where financiers play a crucial role, because brand building costs money and lots of it. NEF came to the party in this regard. But, financiers would do very well if they can implement a more simplistic process to acquire funding. I have an MBA from one of the best business schools in the world and almost finished with a PHD, but I battle with the procedures. What about these brothers and sisters who are less sophisticated." The Lindiwe range of seven varietal wines is produced under the specifics of the management team of ReInvest, winemaker Chris Jansen, to meet he requirements of the company's clientele. The grapes are sourced from farms that comply with both the quality criteria and the code of the Wine Industry Ethical Trade Association (Wieta). The grapes are delivered at the Vinnova Cellar (KWV's contract winemaking facility) in Robertson where Jansen oversees the vinification. The process of bottling and packaging takes place in Paarl from where the wine is prepared for shipment and distribution to overseas and local markets. "Judging by the potential of Lindiwe wines, there is scope for a further addition of more products in the portfolio that would include a brandy and a sparkling wine to cater for the growing spirits and sweet wine palate," said Pieterse. The current range comprises: Cabernet Sauvignon 2002, Pinotage 2002, Merlot 2002, Shiraz 2002, Sauvignon Blanc 2003, Chardonnay 2003, Chenin Blanc 2003, Chazaa (Township word for sparkling wine, made semi-sweet for sweeter palates). The whites retail at about R24 - 26 and the reds around R34, while the sparkling wine costs R24. Soon to be released are the Lerato White (Colombard / Chardonnay) and Lerato Red (Ruby Cabernet/Pinotage), as well as ReInvest Brandy.
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