FAMILY WINERIES

A family affair

Andrew Graham analyses the continued success of family-led businesses and their impact on Australia’s wine industry.

It’s impossible to understate the importance of family companies to Australia’s wine industry.

But sure, let’s look at the numbers. According to the latest Wine Australia estimates, there are 2156 wineries in the country (and 6000 growers), most of which are family businesses. That trend continues all the way up, from boutique to large producers, with more than half of our top 20 largest wine producers (by revenue) all family-owned and operated.

It doesn’t stop there either, with many in that top 20 list (from the Wine Industry Directory 2021) also multi-generational businesses - including Tahbilk, Brown Family Wine Group and Yalumba, who each boast histories of more than a century.

But have you ever really wondered why? What is it about family wine businesses that make them so successful, and for so long? Especially in a world where larger corporations enjoy much greater economies of scale and global brand recognition, surely it should be corporations dominating the top 20, not the other way around?

I went to the source for an answer, hitting up a few members of some of our most important family wineries to work out what it is that really helps them not just survive, but thrive.

It’s all about patience

The benefits of a long view - that’s the most obvious answer as to why family wineries are more successful. It’s the benefit of looking beyond immediate shareholder returns and instead gazing far into the future to spot a path, even if it means a few lean years.

As Caroline Brown, from the venerable Brown Family Wine Group (Australia’s seventh largest wine company in 2021), explains, time works differently in a family winery.

“We’re not in it for the quick wins. Patience is the key to our success (for over 130 years), and from this, the rewards do come,” she said.

Elizabeth Calabria-Staltare, of Calabria Family Wines (Australia’s 13th largest wine company in 2021) agrees, and said: “The decisions we make in business today have a long-lasting impact on future generations to come.

“When your family name is on thebuilding, the bottle and the letterhead,it results in an enthusiastic obsessionwith quality and a respect of theheritage that the family hasbuilt up over many years.”

Mitchell Taylor, Taylors Wines

“Our actions today will affect our children and our grandchildren when and if they decide to step into the business, so while we need to make decisions that make ‘business sense’, we also need to factor in the long term impacts as well.”

The other undeniable motivator for any family winery is the sense of responsibility when something feels like it is ‘yours’. Mitchell Taylor of Taylors Wines (Australia’s 12th largest wine company in 2021) puts it succinctly.

“When your family name is on the building, the bottle and the letterhead, it results in an enthusiastic obsession with quality and a respect of the heritage that the family has built up over many years,” he said.

Calabria-Staltare made a similar point by saying: “There’s something about family businesses that bring the concept of a ‘higher purpose’ to the forefront of how we operate.

“Our name is on every bottle of wine that comes out of the winery, so it’s very important the wines live up to the high standards we aim to achieve.”

Yalumba Managing Director, Nick Waterman, and Robert Hill-Smith

The sentiment doesn’t go unnoticed in the trade either, as Will Figueira from Wine Selectors explained.

“Being family, you can’t be more tied into something - it’s blood,” he said.

“You can’t run away when things go bad. You are often tied to it for life, so you have to stick, and tough it out. This creates many things - pride, pressure, responsibility, accountability… all of it helps family wineries be enduring success stories.”

It’s also about culture

It’s easy to explain away some of these family’s success stories by focusing on a sense of duty. But the most successful producers also foster a culture beyond the names on the door.

Take Yalumba (Australia’s ninth-largest wine company in 2021) and the Hill-Smith family for an example. Here, the family places an emphasis on treating employees more like family, with the result a winery with a legendary low staff turnover.

Indeed, when the latest member of the family Jess Hill-Smith entered the business in 2019, it was a surreal experience

“It felt like coming home. There were so many people around the winery who were there when I was born. They were talking about meeting me first as a baby. I have to say that this is what makes us unique. I wouldn’t be here as the sixth generation in the business unless we didn’t have those incredible people working alongside the family,” she said.

While Hill-Smith family members are encouraged to work in the business, there’s also a rule that states they must work elsewhere for at least five years before they can apply for a role within the company - amove widely respected for creating sense of real-world grounding.

The same rule applies at fellow First Family of Wine member, Brown FamilyWine Group, with good effect.

But it goes deeper than that. One of the benefits of finally entering the business for these next-generation wine producers is that working with your family can be fun, as Brown explained.

“I love working alongside my best mates (sisters and cousins) and the way we work together and bounce ideas off one another is probably quite unique,” she said.

“No doubt we drive each other nuts at times but knowing what each other is thinking probably helps too!”

For Casella Family Brands (Australia’s third-largest winemaker in 2021), the sense of family permeates the business too, with a stated belief that ‘a company built on family values fosters a workforce of dedicated and resilient people.’

Innovation and adaptation is the ultimate answer

It’s no coincidence that Australia’s most successful family wineries are also among the most innovative in the country too, with a storied history of bold moves (which don't always work out) that simply wouldn’t fly in a larger corporation.

Casella is a perfect place to start. We all know the legacy of Yellow Tail, which singlehandedly launched bright and cheerful Australian wines into millions of affordable wine glasses around the world. But what’s fascinating is how they've carried that brand forward, now featuring new products like Yellow Tail PureBright, a ‘lighter in calories and alcohol’ range, and the latest to market, and YellowTail Whiskey Barrel, aged in Australian Whiskey barrels. It’s a move straight out of the big brand playbook, and it’s hard to argue against.

On the topic of ‘lighter things’, the no and low alcohol category is where many of these family businesses are investing their effort. Brown is especially excited.

“Have you tried our Prosecco Ultra Low?” she asks.

“The no and low alcohol space (this wine has 0.5 per cent ABV) is really growing and we think this wine really is the best tasting in the market.

“We’ve retained the very small percentage of alcohol (technically we can call it zero alcohol, however we’ve chosen to be very transparent) to retain the flavour and it’s really paid off. This is a really exciting space for us.”

You don’t have to look far to see how family wineries have helped colour the wine landscape too. At De Bortoli (Australia’s sixth largest wine company in 2021), the launch of the Rosé Revolution a decade ago helped to drive our rosé styles in a (welcome) dry, pale and savoury direction. Or for the grandfather of innovation, look at Angove Family Winemakers (Australia’s 14th largest wine company in 2021) who pioneered the wine cask in 1965.

Family wineries, perhaps by nature of that long term view, are typically at the forefront of sustainability measures too.

Taylors, for example, was the first in the world to launch a carbon-neutral wine range (80 Acres) and has partnered with the Sydney Institute of Marine Science to help save the Endangered White’s Seahorse from extinction. Tahbilk (Australia’s 11th largest wine company in 2021) is now carbon neutral, and is growing closer to ‘natural’ carbon neutrality thanks to decades of tree planting.

Of course, it’s not all about a working green gauge. The other element for enduring family winery success is about adaptation and embracing change.

“We’re not in it for the quick wins. Patience is the key to our success (for over 130 years), and from this, the rewards do come.”

Caroline Brown, Brown Family Wine Group

For the Brown and Hill-Smith families, it has meant buying up vineyards and wineries in Tasmania with an eye on a climate-change-affected future. For the Calabria family, it has meant consolidating their footprint with the acquisition of another legendary family business, McWilliam’s Wines, in 2021. The family is also broadening its range of wholesale partnerships through the Vintners & Co. Merchants portfolio (including availability of the Piedmont original Fontanafredda).

Who do you trust?

Finally, if there was a single reason why family wineries have a natural edge, it comes down to a question of trust from consumers and customers.

According to the giant Edelman Trust Barometer (which surveys 36,000+respondents), family businsseses are more trusted (66 per cent) than public (52per cent) or state-owned (46 per cent) companies.

A study published in the Psychology & Marketing Journal dug deeper, theorising that consumers feel this way because they “subconsciously take their positive emotions for their own families and project that onto the family-owned business and its products.”

Of course, this doesn’t add up to instant success for family wineries, but it does suggest that when it comes to the crunch of what wine to pull off a shelf, family wineries enjoy an edge. Couple that with a focus on culture, innovation and family values, and it’s little wonder that top 20 list looks like a who’s-who of wine industry families.

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