Duo spice up the traditional wine industry

Bill Rolfe and Toby Hancock were sitting on a park bench eating sandwiches when they had their eureka moment. The business partners were trying to drum up an idea for their new wine marketing business when one suggested creating a wine to accompany spicy food. They dubbed their plan Project Tikka Masala.

Three years on, the Portuguese rosé that they created, Pink Elephant, is on target to sell a million bottles a year through supermarkets, off-licences and more than 1,000 restaurants and the duo predict that in five years’ time, sales could top a million cases a year.

Mr Rolfe, a former marketing director of the Unwins off-licence chain, says: “Wine and food matching is really important to the trade, and I thought no one had really done a wine to match Indian and Asian food. People talked about sauvignon blanc and gewürztraminer, but no one ever mentioned rosé as being a great match with this type of food.”

As well as being good with spicy food, rosé was also — at the time of Pink Elephant’s launch — the fastest-growing part of the wine market. The pair had links with a winemaker in Portugal — the country that gave us Mateus Rosé — who they knew could create a high-quality wine in sufficient quantities for their plans.

 “We knew that rosé was growing exponentially,” Mr Rolfe says. “At that time it was growing at almost 30 per cent and represented 5 per cent of the market, but we knew it would carve out 10 per cent of the market. All the signals were there for rosé, and Portugal was known for it because of Mateus. They’ve created a world brand that consumers know, though it’s a bit old hat. We thought we could do something new and modern.”

To ensure that they got the product right, Mr Rolfe and Mr Hancock assembled a tasting panel of 12 wine experts, including two Masters of Wine and some wine journalists. The panel gathered at a Masala Zone restaurant in London where they were served spicy dishes to help them to create an accompanying wine.

Having chosen a suitable wine — one described as having “intense mouth-watering juiciness, crisp fresh flavours and aromas of strawberries and raspberries” — the next stage was choosing a name, a key element in creating a marketable brand, and getting a designer to devise a modern, eye-catching bottle label.

The first batch of Pink Elephant was in the shops in the summer of 2007, selling 300,000 in the first year and 500,000 the year after, thanks mainly to deals with Tesco, Morrisons and Booths. The brand is also showing strong export potential, being sold in 22 countries, including Australia, Thailand, Spain, Sweden and the US.

Although the brand has achieved its sales targets, the problem has been converting sales into profit in the face of sharply rising duty, cost increases and aggressive pricing by multiple retailers. “It hasn’t met the targets in terms of margin,” Mr Rolfe admits. “To be frank, the margin target was very difficult to project, let alone hit.”

Mr Rolfe says that, at the normal retail price of £5.99 a bottle, they would be “very lucky to make 60p”, and it is clear that at the promotional price of £3.99 often employed by Tesco, the profit for the duo would be negligible. Mr Rolfe says: “There’s a joke: How do you make a small fortune in the wine trade? Answer: start with a large one.”

However, he says: “We love the supermarkets because they’re helping us to build a brand, which in turn creates a capital value. We know the game and we’re happy to play it.”

Mr Rolfe says that the duo’s company, 10 International, is also making headway in its plan to become the wine equivalent of Cobra Beer in ethnic restaurants. It recently won a deal from Nando’s, the Portuguese peri-peri chicken chain, and has secured a listing with LWC, a drinks distributor with a strong presence in the curry market.

However, 10 International is far from being a one-brand business. Although Pink Elephant is easily its biggest wine, the group’s name is taken from the number of top wine-producing countries and its aim is to create a new wine brand for each of them. From Argentina it has created a red wine called La Poderosa, after Che Guevara’s motorbike, recently stocked by Majestic Wine Warehouses, while from Italy it has developed a brand called Emotivo.

Mr Rolfe says that, although the quality of the wines is important, the company has learnt from the travails of the French wine producers and created simple but attractive brands with modern label designs that appeal to today’s wine drinkers.

Mr Rolfe and Mr Hancock met while working in sales and marketing for United Wineries, part of the Spanish group Arco, for which they launched a number of new wines as the company sought to move away from its roots as a “slumbering, traditional Rioja producer” into a more marketing-led organisation.

Mr Hancock says: “We were going round our clients and wine fairs launching new Spanish wines. We thought, if we can do it for someone else, why can’t we do it for ourselves. So I persuaded Bill we should set up our own company creating and designing new wines from scratch.”

However, rather than becoming involved in making wine, they get the wine made to their specification by top producers for a fixed price or, in some cases, a profit share. “Most producers who sell to the market directly are still stuck in this old-fashioned production-led frame of mind,” Mr Hancock says. “Often you see all the good work they do in the vineyards and with their wine, but they don’t understand the consumer and how to create brands and turn their product into something desirable.”

Mr Rolfe adds: “I think there will be room in the future for entrepreneurs, innovators in the wine industry. You can’t stand still, as the French have seen. How have we managed to get where we are? I think it’s because we are innovators and we’ve pushed the boundaries and used marketing in its very best form.”

The Surrey-based group’s marketing tactics are certainly different. Just after the launch of Pink Elephant, Mr Rolfe admits walking around the London International Wine Fair “putting stickers saying ‘I love Pink Elephant’ on people’s backs, including some captains of the wine industry”. The group also supports the Elephant Family, a charity that protects elephants in Asia.

The company, which also acts as agent to its wine-producing partners’ own brands, recently set up a franchise in Ireland and is in talks about setting up operations in the US, Scandinavia and China.

Mr Rolfe says: “The wine industry faces tough challenges in the short and medium term but the long-term prognosis for the industry is good. At the moment there is a glut, but when the Chinese start drinking wine there won’t be enough.” And what happens if Pink Elephant draws interest from one of the big drinks companies? “We’d always listen to a proposition.”

Wine collection

Brands created by 10 International:

Portugal: Pink Elephant — rosé made from four grape types (touriga nacional, alfrocheiro, castelão, cabernet sauvignon); Point West — white wine (50% chardonnay, 50% alvarinho) and red (100% touriga nacional). All made in Estremadura.

Argentina: La Poderosa — red from Patagonia (70% malbec).

Chile: Chamanto — sauvignon blanc, cabernet sauvignon and carmenere rosé, all from Maule Valley.

Italy: Emotivo — pinot grigio blush, white pinot grigio and red montepulciano.

France: Left Bank — cabernet sauvignon from Bordeaux.

New Zealand: Two Islands — sauvignon blanc from Marlborough.

Spain: Altoro — red from Navarra (60% tempranillo, 40% cabernet sauvignon).