Gin puts distillery on the road to success | Fin24
 
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Gin puts distillery on the road to success

Dec 08 2016 14:12
Glenneis Kriel

The story of how Wilderer Distillery became one of the world’s leading gin crafters started more than 20 years ago when Helmut Wilderer lost a restaurant that he built up to Michelin status in Baden-Baden, Germany. At the time, around the start of 1993, Helmut won a golf trip to South Africa. 

During this weeklong trip, he drank the worst grappa, imported from Italy, he had ever tasted. After complaining about the poor quality of grappa in South Africa, the Swiss owner of Rozendal farm in Stellenbosch convinced him to start his own distillery here. The very next day, the two set off to register the distillery and a few months later Helmut received a licence for the first privately owned distillery in SA. 

Helmut took various international courses to learn the tricks of the trade and become a master distiller. Despite numerous international awards for his grappa, the business only started making real money when his son, Christian, persuaded him to make his own gin.  

Christian, how was Wilderer started?

My dad swore he’d never get involved in the restaurant business again, but when he acquired the property in Simondium for his distillery, he opened his premises for grappa tastings. During the tastings, people would ask whether he didn’t have any coffee or snacks. Before long he opened a restaurant again, called Pappa Grappa. The idea was for the restaurant to serve authentic Italian and German cuisine to complement the grappa experience. 

How did you get involved in the business?

I worked for my dad for three years after finishing my B.Com degree, but left in 2005, because we clashed too much. I got a job at Core Catering and within two years worked myself up from rep to a department manager with more than 60 people under me. 

But when my dad decided to sell the distilling operation, I knew it would be a financial disaster to sell the property. So I offered to help him out. He would continue producing grappa, while I would take over the restaurant and find an independent distributor for the grappa. I reasoned it would be easier to find a distributor than a good restaurant manager.  

Why was the business struggling?

Grappa was not taking off the way my dad envisioned – drinking grappa simply isn’t part of the South African culture. In addition, he was operating the restaurant half-heartedly because of the Baden-Baden experience in which he suffered huge financial losses. He also struggled to find good staff, most probably because of language and cultural differences. He tried to import good chefs, but this didn’t work out. 

How did you plan on making a difference?

I looked at the restaurants around me and came to the conclusion that a restaurant’s success depends on the atmosphere, service, quality and price of food. You will almost certainly be busy by doing all four these things well, and [become] a major hit if you do them exceptionally well. 

Achieving these goals wasn’t easy, as we were quite cash-strapped. We started out with a turnover of something like R30 000 a month. I bought just enough produce at the start of each day from the money made the previous day. The number of customers was greatly managed – if there was a booking of more than 20 people, I would say the restaurant was fully booked. 

The menu was limited to two to three dishes. Since we had very limited provisions, I would also sometimes go to big tables and talk like an Italian: I would welcome them, ask them what they wanted to eat, but before they could respond, tell them: “Ah, let me make you something special.” 

I also suggested people shared dishes and refilled the dishes when they were empty. The people loved going to the “crazy German”. I did this for about three months until things got a little more settled. You won’t be able to build a big restaurant on serving food that way.

When did things start improving?

Customers were increasing. I organised an Oktoberfest with an Oompah band, which cost me almost all my savings, but it helped us break through the R40 000 barrier a day. But I wasn’t happy. I was working 18 hours a day, six days a week and feeling very sorry for myself. 

In 2009, I took a break to visit my mother in America. I went to play golf with one of her Finnish friends, who asked what was troubling me. I told her my sad story, but instead of sympathy, she gave me a “slap”. She scolded me for not making the most of my opportunities and told me to stop “being a little boy”. 

The talk got me all psyched up and the change in my attitude seemed to have a positive impact on the restaurant and me and my father’s relationship. 

Quite a few lifestyle estates popped up in the region in the mean time, with many of the new inhabitants becoming regulars at the restaurant.

What was one of your first real breakthroughs?

Well, Charles Back, the owner of Fairview, used to (and still does) visit quite often. He is a great visionary. He told us about this plan of opening the Spice Route in Paarl, which he estimated at the time would attract more than 1 000 visitors a day. He wanted us to take part. We were just starting to get on our feet, so I wasn’t interested at first, but he kept nagging until we finally agreed. 

We opened the La Grapperia Pizza & Bistro with another Wilderer distillery at the Spice Route Wine Estate in January 2013. The restaurant was much busier than we expected, doing almost four times better than Pappa Grappa and averaging about 12 000 people a month. Grappa sales however remained down. 

How did gin come into the picture? 

Grappa is a seasonal product. You can only distil while there are fruit or wine grapes available. Charles wanted the distillery to run throughout the year. He actually threatened to throw it out, but we were adamant in keeping it, as it was integral to our concept.  

We were thinking of various alternatives. About four years ago, I went to Germany to visit a friend. We went to this bar, where I noticed all these strange people with beards and tattoos and when I ordered a beer, the bartender told me that they only served gin. 

They had something like 20 gins and 12 tonic waters to choose from, along with a variety of condiments. I was quite disgusted to fork out over R200 for a glass of gin I didn’t really want.

Then I started reading articles on this trend. It seemed to be huge in America and the UK. This made me think that it would also work here, as it is usually only a matter of time before trends in the UK catch on in South Africa. 

Was it smooth sailing from there?

Oh no, my dad didn’t want to bite. It took me almost a year to convince him to craft our first gin, as he insisted that he never invested in trends and he seemed to think gin crafting was beneath him. Once convinced, it took him another year-and-a half to develop our Fynbos Gin, which was released at the end of December 2015. It was a hit from the start and won three international gold medals – one at the Meiningers International Spirits Awards, one at the Selection Magazine competition in Germany, and one in the Michelangelo’s awards in South Africa.

Where we struggled to get grappa distributed, the gin almost sold itself. It is sold by all the major local retailers in the country. The gin has also made people more aware of the brand, which had positive spinoffs on grappa sales and restaurant attendance. 

The wonderful thing, though, is that we were always limited to producing about 10 000 bottles of grappa a year. Crafting gin is a lot easier and all the raw materials – botanicals and spirits – are available all year round. We currently craft 5 000 bottles of gin a month, but have the capacity to craft up to 70 000 bottles a month.  

The gin is producing almost exactly the same profits as the restaurants, with a lot less stress. Where we are employing close to 70 people altogether, only five people are involved in the gin-crafting process. But this doesn’t mean that we would get rid of or neglect the other business divisions. It is good to have a diversified business, as the thing with trends is that they often blow over as soon as they start. 

How tough is competition?

Craft gin is still relatively new in South Africa. I would say we are most probably the second-biggest gin crafters in the country. There have been quite a few new ones popping up since the start of the year. Our awards and the positive media coverage resulting from it, has given us a big advantage. According to South African Wine Industry Statistics (SAWIS), the value of the gin market has increased from R483.7m in 2006/07 to R892.4m in 2014/15. 

What were the biggest lessons you learnt?

I have been extremely tight pocket, because we had been struggling for so long. One of the greatest lessons I have learnt, though, was that it pays to invest in good human resources. Good employees usually more than pay for themselves.  

What are your goals for the next three years?

My main focus would be on smoothing operations and increasing sales, but we won’t do much more production expansions. I am quite happy with the way things are now. As mentioned, the gin is sold by all the major local retailers and we are exporting to Holland, Belgium, Germany and Switzerland. The company to which we are exporting in Switzerland offered us shares for exclusivity and also want to open up a company in the United Kingdom. In addition to that we are in the process of unlocking the Chinese, American and Australian market. 

This article originally appeared in the 1 December edition of finweek. Buy and download the magazine here

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