A move into the wine business for property executive Bruce Baudinet threw up challenges aplenty. The biggest was nature.
Flood, drought, pests and disease are “way outside of what we’re used to operating under in property”, he says.
It started with a stake in a small South Australian vineyard in 2000. Now Baudinet is part of a syndicate that owns 10 per cent of the vines in the Barossa Valley. Although he spent more than 20 years working in commercial property, including roles at Lend Lease and Perpetual, Baudinet says buying a vineyard wasn’t a property play. “There’s always a bit of dirt behind a vineyard but it’s not developable dirt,” he says.
Together with Nathan Waks, a cellist with the Sydney Symphony Orchestra and Baudinet’s Sydney neighbour, his first deal was to buy a Clare Valley vineyard from winemaker Kevin Mitchell.
“We had long-term contracts so it gave us a bit of security,” Baudinet says.
Mitchell was behind boutique brand Kilikanoon Wines and in 2001 when he wanted to expand the business, he turned to Baudinet and Waks. Now Baudinet is chairman of Kilikanoon, a business that has grown through acquisitions of vineyards in South Australia to produce more than 60,000 dozen bottles a year.
Baudinet is also the chairman of Seppeltsfield Estate Trust, an historic wine brand and vineyard founded in 1851. He still has a role as managing director of Oracle Group, a fund manager and developer that he founded in 2007. His background gives him a headstart on striking deals. It’s not enough to get a good price, ongoing contracts make the difference, he says.
His first vineyard purchase had 10-year contracts in place, then in 2007, Baudinet and other Kilikanoon shareholders formed Seppeltsfield Estate Trust to buy a 50 per cent share of Seppeltsfield from Foster’s Group. The deal included ongoing fruit, storage and wine processing contracts with Foster’s as well as about 3 million litres of ageing 100-year-old Para Tawny port. “It’s like being able to buy Grange,” he says.
Seppeltsfield increased its ownership of Barossa Valley vines by 500 per cent in October 2011 and will focus on supplying its own brand and bulk wine to markets such as India and China.
Baudinet says growers must focus on meeting their production capacity and then cultivate strong supply contracts. “It’s very much a matter of having a home for the fruit.”