Welcome to Manufacturing & Agribusiness Month. Follow along here for all our coverage on these important sectors.
This article was originally published in November 2017.
The wine business is a capital intensive venture. This, however, didn’t stop young entrepreneur and former banker, Mphumeleli Ndlangisa, from launching his own brand of wines, Magna Carta Wines in 2014.
With the help of friends, Ndlangisa launched the company despite having no traditional financing and doing so in a tough and still white-dominated industry.
“Yes, it has been difficult but I’m not one to shy from difficulty, I relish it,” he says. “The industry, both from the production and consumption side, is predominantly white, we all know that. Luckily a good wine will remain a good wine regardless of colour, hence I focus on that and leave the politics to the politicians,” says Ndlangisa.
Ndlangisa was still able to launch his brand without owning many of the usual bottling equipment or wine tanks used in winemaking.
“I do not own fancy Foudre or imported tank presses. However, this shouldn’t stop you from producing excellent wines, as excellent wines were being made in the dark ages were fancy technology didn’t exist. Without being too technical, I’ve made wines with interesting character through exploring and experimenting with grape skin contact, extended lees contact and maturing in glass or neutral vessels.”
To solve the problem of land, as he currently does not own any vineyards, Ndlangisa sources all his grapes from grape growers.
Ndlangisa is hoping to coin in on both ends of the spectrum. His wines are targeted at both novice and connoisseur drinkers.
Today, the Stellenbosch-based establishment produces 10,000 bottles annually of what Ndlangisa describes as light and delicate wines which are also “predominantly terroir expressive” which means they reflect the character of the vineyard where the grapes are grown, he says.
They produce wines such as the Magna Carta Pinot Nior 2014, Magna Carta Chenin Blanc 2014 and Let The Wine Speak For Itself Syrah 2015.
Magna Carta now also sells in London and Tokyo as well as across Africa including Zambia, Lesotho, Kenya and Nigeria.
“I’m grateful for the support thus far as all our wines sell-out within three months of release. The problem now is increasing production whilst maintaining the same standard of quality. In 2018 we’ll be looking at 50,000 bottles,” he says.
Ndlangisa talks to SME South Africa about how being innovative has helped him break into a tough industry and create a powerful brand.
Q. Why did you choose winemaking?
I’ve always loved art and agriculture, winemaking encompasses both elements. I grew up in the rural areas and farming is somewhat in my blood, making wine is not only about biology and science but also about the winemaker’s finesse and artistic signature.
Q. How much did you know about the wine industry before you decided to take the leap?
I knew that the wines I wanted to drink were not being produced and that if you happen to come across them, they’d be too expensive. I’m talking about natural wines. The unimaginative ways that wines were being produced propelled me into making wines in a more maverick style.
Q. Wine-making is a very capital-intensive venture, what was your strategy for raising capital?
I didn’t need one initially as I received help from friends who were already in the industry to help me produce my wine. I’m now in the process of scaling up my production and I’m using corporate financiers to help structure a hybrid debt and equity model to suit our cash flow needs.
Q. What about investors, what do you look for in an investor?
I’ve never needed investors and it’s only at this point where I’m being approached by investors. I’m looking for investors who understand the wine industry as it is unique and requires a unique understanding of wine consumers and the wine trade in order to succeed in it.
Our strategy is to convert stubborn drinkers of certain varietals into trying something new that we’ve produced
Q. How did you fund Magna Carta in the early days and what would you say was your biggest hurdle in terms of securing the funding you needed?
I started Magna Carta Wines from my savings. Currently, as I seek funding, I find it difficult to make investors understand that the wine business is not a short or medium term exit but indeed long term. Funds and investors need to understand that quality does indeed determine wine prices and as consumers shun big brands and trust their own palates, quality will become the largest contributor to price and hence revenue.
Q. What would you say is Magna Carta’s biggest advantage over your competitors?
For Magna Carta Wines our niche is natural wine produced in small batches. Our focus is on maintaining a high-quality standard whilst intriguing erudite wine drinkers and the novice wine drinkers alike. Our strategy is to convert stubborn drinkers of certain varietals into trying something new that we’ve produced.
Q. Overall, what does it take to stand out in this saturated market?
Authenticity is the ultimate. Wine lovers gravitate towards my wines because they carry unique character whilst being authentic to what they are: fermented grapes. It sets Magna Carta apart in that we believe that the grape which is a product of the vineyard should be at the forefront of the wine producer. A lot of our work involves naturally farming grapes and highlighting nature in our wines.
Q. The first few years in any business are usually the most difficult, other than funding, what have been your most unexpected challenges so far?
Remaining positive through the tough times is difficult and it’s easy to become a self-saboteur in this regard by beating yourself down. What I’ve come to appreciate the most about being in business is that you learn to be utterly honest with yourself about your progress and even your failures. Which is probably something I avoided in the past.
Q. How is your approach to branding also helping you to stand out?
I try position Magna Carta Wines to straddle both more serious drinking markets as well as more casual drinking markets. You can see that by how the Chardonnay, Pinot Noir and Sauvignon Blanc are branded completely different from the Pet Nats and The Blind. The strategy is to create characterful wines for all occasions.