Long-term vision is usually vital for doing business in China – and wine-maker Miguel Torres Snr is among the more far-sighted investors, building a €26 million business from scratch over the course of a decade.
This year sees the departure of Mr Torres Snr from active duty as company general manager – he will stay on as president – and, before leaving, the patriarch made one last tour of China, a country that now accounts for around 10 per cent of the Spanish giant’s turnover.
But it was far from easy to establish, and run, a business in the country, especially in the early days. Torres initially embarked on a joint venture, ultimately deciding that it was easier to go it alone, a decision that was vindicated by staggeringly high annual growth rates.
As well as supplying hotels, restaurants and clubs across the vast nation, Torres has a consumer-oriented division, everwines, which sells wine via the internet and also at in its own stores, and wine-bars, in major Chinese cities.
Miguel Torres Snr predicts that, despite increased competition, the market has ample room for further growth, particularly in the second, third and even fourth tier cities, where the middle-class pastime of wine-drinking is still something of a novelty.
The company also has a successful joint venture with the Hong Kong-owned Grace Vineyard, making a muscat wine, Symphony, but unlike a number of French producers there are no immediate plans to found a Torres vineyard.
‘That is one to study for the future, we are analysing possibilities,’ says Torres. ‘This country is so big that even today they are discovering new areas with potential for wine. When we went to Chile it was much easier because you knew the exact areas for wine but in China there are all kinds of possible areas and you have to make sure.
‘We don’t need to make a fast decision whether it is distribution, or making wine. We are very careful, it is very different to Europe, but we have a great team here.’
Torres now has almost 300 staff in China, representation in all the major cities and has notched up growth rates of 40 per cent for two consecutive years – almost doubling the size of the business. But last year’s China-wide austerity drive, which involved clamping down on excessive entertaining and gift-giving, hit all sectors of the luxury business, including wine sales, meaning Torres growth was a relatively paltry four per cent.
Business has since rebounded, with a forecast growth of up to 15 per cent this year. To encourage sales – and maintain loyalty – Torrres regularly hosts educational seminars, wine-tasting events and, for the higher-end customers, elaborate dinners featuring visiting winemakers and vineyard owners.
The recent farewell tour by Miguel Torres Snr allowed him to explain to staff in detail the succession procedure, which will see son Miguel Torres Maczassek take over his duties as group general manager. The new boss is planning a China visit shortly, where he will be accompanied by China senior staff, including Shanghai-based Alberto Fernandez, a ten-year China veteran, and his Beijing–based deputy, Singaporean Damien Shee.
Meanwhile, Torres senior is planning to devote more of his time to one of his main passions – climate change, and how it is likely to affect the wine industry. That interest was sparked by watching former American vice-president Al Gore’s documentary on climate change, An Inconvenient Truth.
Torres vowed to make the company cleaner and greener and persuade other wineries in Spain that the environmentally-friendly route made perfect business sense. That has evolved into the organisation Wineries for Climate Change, which recently agreed on procedures for certification – and approved the companies that would undertake audits of winery facilities and processes.
‘I think the wine industry has to take climate change seriously,’ says Torres. ‘It will change drastically: temperatures have increased one more degree in the last 40 years, if they increase two or three more degrees this century what will you do with Pinot Noir in Burgundy for example?
‘At Torres, we have to move our vineyards up to higher altitudes, closer to the Pyrenees. We are buying land and investing for the future in 20 years’ time. The vine lives 40 years, so you have to think long term. I think it could be difficult days for the wine industry in future. We are exploring possibilities: can we create new hybrids?’
Torres hands over a company that is in rude health, with wineries on three continents; China annual revenues grew from €100,000 back in 2000 to the current €26 million. But his proudest legacy has more to do with quality than quantity. Torres is now known for producing high-end wines, as well as its mass-market bottles.
He adds: ‘Me and my brothers worked to upgrade the image of Torres from sangria, wine that tourists would buy in supermarkets. Nowadays we dare to compare our wine with the best wines in the world.
‘One of the most beautiful moments in my career was when we launched Mas La Plana and it received international recognition from a French jury, ahead of Chateau Latour. That was the first time for Spanish wine to receive international recognition. That was a big moment. I love Mas La Plana. We do blind tastings all the time and it comes out well.’
All rights reserved by Future plc. No part of this publication may be reproduced, distributed or transmitted in any form or by any means without the prior written permission of Decanter.
Only Official Media Partners (see About us) of DecanterChina.com may republish part of the content from the site without prior permission under strict Terms & Conditions. Contact email@example.com to learn about how to become an Official Media Partner of DecanterChina.com.