Jim and Rose Delegat maintained a strong belief in producing premium international wines and they have executed their plans and dreams perfectly. Photo / Supplied
Whatever was thrown at them, Jakov (Jim) and Rosemari (Rose) Delegat maintained a strong belief in producing premium international wines and they executed their plans and dreams perfectly.
They are celebrating 75 years of contribution to the flourishing New Zealand wine industry — no doubt with a glass of their renowned Delegat Oyster Bay Marlborough Sauvignon Blanc or Barossa Valley Estate Shiraz or Crownthorpe Terraces Chardonnay.
Over that time Delegat Group has become one of the country’s leading and biggest wine companies with an eye to exporting super premium brands. Its Oyster Bay brand, with the gold-rimmed label, has put New Zealand wine on the world map and maintained longevity.
Leading London wine writer Michael Kime described Oyster Bay as “pretty close to being the elusive stuff of dreams” after it won the coveted Marquis de Goulaine Trophy for Best Sauvignon Blanc in the World in 1991— the variety’s very first vintage.
Thirty years later, Oyster Bay is Australia’s favourite white wine and was officially recognised by Drinks International magazine as the 25th most admired brand in the world.
Over the last two decades, Delegat has grown 22-fold and has passed three million cases in global sales — the equivalent of 200 million glasses of wine.
From the humble beginnings of the 4ha vineyard in West Auckland, Delegat has spread to more than 3500ha in Hawke’s Bay, Marlborough and Barossa Valley northeast of Adelaide.
Jim and Rose had a clear and deliberate strategy and plenty of innovation. They pioneered the fermentation of Chardonnay in French barrique barrels in the 1980s; introduced a new vine selection Clone 6 Chardonnay from California; were among the first to plant vines on the Gimblett Gravels in Hawke’s Bay; and developed state-of-the-art wineries.
Delegat has carved a path for New Zealand’s cool climate varietal wines on the world stage. The wine exporter, publicly-listed since 2006, sold a record 3.36m cases in the 2021/22 financial year ending June, and recorded revenue of $325.6m, up from $255.8m in 2018, and net profit of $63m, up from $46.7m.
Delegat’s total assets are nearing the $1 billion mark at $967.3m, increasing from $779.8m in 2018, and the group plans to invest $51.9m next year to help meet its next planned stage — reaching sales of 4.08m cases by 2025, with 21 per cent growth in North America.
Jim and Rose Delegat, the single-minded and dynamic brother and sister combination, were recently awarded Fellows of the New Zealand Winegrowers Association for their outstanding contribution to the industry which now produces $2.8b worth of wine.
They have been described as “industry architects.” Their drive, determination and achievement have also earned them the title of Visionary Leaders in the 2022 Deloitte Top 200 Awards.
Deloitte awards judge Neil Paviour-Smith said right from the outset, Jim and Rose backed their vision of New Zealand as an exporter of super-premium wine to the world’s most discerning markets.
For two twenty-somethings this was a bold ambition. Jim was the planner and business builder. Rose the marketing supremo. Together they were a powerhouse.
Paviour-Smith said it wasn’t all plain sailing. They had to sell control of the company to avoid receivership when a wine glut in the mid-1980s forced a major industry rationalisation. But three years later it was back in family ownership.
By 1990, their pioneering ethos had taken them to Marlborough where their first vintage of Oyster Bay Sauvignon Blanc won gold and the coveted Marquis de Goulaine Trophy at international awards.
“Key to the international success of Delegat and its comparative advantage over other wine exporting companies lies in its single brand (Oyster Bay) strategy targeting the super-premium category. This has enabled Delegat to maintain relatively stable export prices in key markets,” said Paviour-Smith.
“Jim and Rose also determined that Delegat should control distribution and marketing in export markets rather than working through agents, an approach relatively rare in the New Zealand wine industry. It has been credited as helping Delegat sustain better relationships and higher margins over time.”
Delegat is now a $1 billion public company — Jim and Rose hold 66 per cent — and since listing has delivered an annualised total shareholder return of 16.5 per cent a year.
“Quite a remarkable success story but reflective of the long-term vision and leadership Jim and Rose have brought to the company, which bears their family name, and to the New Zealand wine industry,” said Paviour-Smith.
Jim has stepped down as chairman of Delegat Group and is now an executive director and spending less time in the office. But he still works alongside chief executive Steven Carden on strategy and monitoring performance to ensure the successful delivery of board-approved business plans.
He was a director of the New Zealand Wine Institute for 13 years and then New Zealand Winegrowers, which was established in 2002 following the amalgamation of the Wine Institute and NZ Grape Growers Council. He is a member of the Institute of Directors.
Both Jim and Rose are still board members of Delegat Group and are only a handful of second-generation family wine producers in the country.
Rose was responsible for initiating the group’s drive into export markets in the 1980s and was the inaugural chairperson (1987-90) of the special United Kingdon Exporting Group, part of the NZ Wine Institute. She is also a member of the Institute of Directors.
David Babich, chief executive of rival Babich Wines but a close family friend with the Delegats — Jim and Rose came to his wedding — said the wine industry has always been very co-operative “for a lot of the chain supply”.
Babich explains: “For 90 per cent of the supply chain, you are co-operative but the last 10 per cent is getting your brands on the shelf and you are in swinging.
“At that level, you are competing with Oyster Bay.”
Jim was always helpful, said Babich. “Our families go back 100 years, and Jim was always a phone call away. It might have been for some advice or we need to crush 1000 tonnes, can you do it? ‘Yes, I can’ Jim would say.
“It might be something minor like borrowing a pump. But when I finished my winemaking degree in 1990, I had theoretical knowledge but not practical experience.
“Jim got his winemaker Brent Marris to invite me over and for two to three hours he went through their two-year chardonnay oak trial. He didn’t need to do that but it was a completely open book,” Babich said.
“I thought ‘good on Jim for thinking that Brent can do that’. Jim has been pretty giving and a great guy to have in the wine industry.”
Babich said Oyster Bay contributed to the establishment of the New Zealand wine industry — it is such a strong and large brand. It commands a presence overseas.
“You have a 2.5 million case brand sitting as an international leader and New Zealand owned and grown. All two million case brands in New Zealand are internationally owned except Oyster Bay.
“Jim and Rose conceived and executed Oyster Bay from nothing. That was an audacious thing to do and there wasn’t a precedent for us as winegrowers.
“Twenty-five years ago, Jim and Rose put everything on the line to make Oyster Bay a big brand and that takes a lot of horsepower with a lot of associated risks.
“It was a calculated risk building a profile that would produce a return. I don’t think they were rolling the dice — they planned and executed it in a textbook fashion.
“Jim was always willing to bring in a strong team to deliver his concept.”
The Delegats signed up Boston Consulting Group to complete a strategic plan. They had a lot of wine volume coming on stream and they had to develop markets.
They engaged then-government viticultural scientist Dr Richard Smart — now a global consultant referred to as “the flying vine doctor” — to establish the Scott Henry trellis system in their vineyards.
Henry, an Oregon winegrower, developed a system that provides more grape yield, less disease and better wine. (Delegat now has the largest area of Scott Henry trellised vineyards in the world).
The Delegats’ chief winemaker Brent Marris, responsible for developing the Oyster Bay wine style of zesty flavours and fragrance, travelled the world to launch the brand.
Delegat went to Australia, the UK and then to the US.
“They created a team of 25 — they probably have 40 now — on the ground in the US to get the attention of the distributors who hold the balance of power,” said Babich.
“We were in the US before them but they knew how to get good distribution and we’d see their wine stacked prominently in the retail stores.”
It took five years of planning to execute the export drive. “I know how Jim and Rose would have sweated over it — it was a big call and a big return — and the success probably exceeded their expectations,” said Babich.
Delegat Group, which has nine wine varieties, now has in-market sales teams in New Zealand, Australia (Botany), UK (London), the United States (San Francisco), Canada (Toronto) and China (Shanghai).
North America is the biggest market with 48 per cent of the group’s sales or 1.6m cases; UK, Ireland and Europe 32 per cent or 1.06m cases; and Australia, New Zealand and Asia Pacific 20 per cent or 692,000 cases. The 2022 grape harvest was 44,861 tonnes, up 20 per cent from last year.
Growing appetite for wine
It all began when Jim and Rose’s Croatian parents Nikola and Vidosava Delegat planted vines on their new West Auckland property near the Whau River, an arm of the Waitematā Harbour, in 1947 — after working on a dairy farm in the Waikato to save money for a vineyard and winery.
Nikola died in 1973, and Jim (then 24) and Rose (22) joined forces to drive Delegat forward, recognising a growing appetite for wine in New Zealand.
Vidosava died in 2014 aged 92.
By 1978 Jim and Rose had established vineyards in Hawke’s Bay and they bought their first Gimblett Rd property in 1986.
They set their sights on the headlands of the Marlborough Sounds and planted their first Oyster Bay vines in 1988.
In the mid-1980s the industry was in the grips of a wine glut and was suffering.
Babich recalled: “There was a trade war going on with Corbans and Montana fighting for supremacy and other brands were caught in the skirmish and selling wine for no profit.
“Then the (Muldoon) Government unexpectedly increased the excise tax on wine and virtually paid you to pull out grape vines. There was a big production and a big tax which screwed the industry.”
Delegat was sold to entrepreneurial hospitality and technology group Wilson Neill which also owned Cobb & Co, Parnell Iguacu restaurant and wireless internet company Radionet. Wilson Neill went into liquidation in 2002.
Babich said Wilson Neill poured money into the Delegat production process with new stainless steel and improved infrastructure. Delegat was put on the market and Jim and Rose bought it back and regained control.
“I recall Jim saying it (the receivership) was the best thing that happened and he was really happy afterwards getting back a better asset and being able to make better money,” Babich said.
Jim and Rose expanded again. They bought the financially distressed Hawke’s Bay Stony Bay Wines and Matariki Wines, one of the pioneer developers in the Gimblett Gravels, in 2013 and an 800-ha dairy farm beside its Crownthorpe vineyard two years later.
There were two more Marlborough properties in the Awatere Valley, and they crossed the Tasman to buy the 5000-tonne winery and 41-ha Barossa Valley Estate (in receivership). Jim said at the time: “The acquisition of the Barossa Valley assets is an ideal fit with the group’s portfolio of high-quality wine.”
The sheer quality and consistency of success of Delegat’s wine brands — Oyster Bay, Crownthorpe Terraces and Barossa Valley — has lived on.
Jim and Rose never wavered from their four-pillar strategy: Leading global super premium brands; vineyards in three of the world’s great wine regions; uncompromising super premium quality; and its global distribution network.
READ MORE: Click here for the Deloitte Top 200 Index tables
In its 75th year Delegat Group celebrated winning the New Zealand International Wine Show’s Champion Commercial White title with Crownthorpe Terraces Chardonnay which was judged in February because of the Covid delay.
At the same time, Oyster Bay was again named Australia’s favourite white and was officially recognised by Drinks International magazine as the 25th most admired brand in the world.
The awards have continued to flow for Delegat Group since Oyster Bay won gold and the coveted Marquis de Goulaine Trophy for best Sauvignon Blanc in the World at the International Wine and Spirits competition in London in 1991.
Here are some of the latest accolades:
92 Points
Delegat Merlot Gimblett Road 2019 at the International Wine Challenge 2021
Gold Medals
Delegat Pinot Noir at New Zealand International Wine Show 2021
Merlot Gimblett Road at New Zealand International Wine Show 2021
Trophy for Champion Commercial White Wine, Double Gold and 96 points
Delegat Chardonnay at New Zealand International Wine Show 2021
Gold Medals
Crownthorpe Terraces Hawkes Bay Chardonnay 2018 at Sydney International Wine Competition.
Awatere Valley Marlborough Pinot Noir 2016 at Mundus Vini (German-based wine academy) Spring Tasting in 2018
Crownthorpe Terraces Hawke’s Bay Chardonnay 2015 at NZ International Wine Show in 2016
Crownthorpe Terraces Hawke’s Bay Merlot 2015 at NZ International Wine Show in 2016 and Gold Champion
Crownthorpe Terraces Chardonnay 2015 in 2016 New World Wine Awards
Crownthorpe Terraces Chardonnay 2014 at 2016 Decanter World Wine Awards
Awatere Valley Marlborough Sauvignon Blanc 2015 at San Francisco International Wine Competition in 2016
Crownthorpe Terraces Merlot 2014 at NZ International Wine Show in 2015
Crownthorpe Terraces Chardonnay 2014 at NZ International Wine Show in 2015
Last year the Delegat Barossa Valley Estate’s 2019 Shiraz, Cabernet Sauvignon and Grenache Shiraz Mourvèdre were all awarded 90 plus points in competition, with the iconic E&E Black Pepper Shiraz awarded 90 plus for 10 years running by Wine Spectator magazine which also recognised it as one of Australia’s Top 25 benchmark wines
The event is described as a series of aggressive sales pitches.