“Good for us isn’t necessarily profit” – South African wine group Journey’s End on sustainability efforts in “difficult” market

In March, Journey’s End announced it had become a B Corp-certified business, a move the South African wine business said underlined its efforts in areas including energy efficiency, water use and farming.

The wine sector, like any in agriculture, knows all about the impact of rising temperatures and a more variable climate – but it’s also facing economic headwinds.

Rollo Gabb: Sustainability and community have been at the very core of Journey’s End’s from the offset – having come off-grid entirely for energy recently, with our own battery storage rooms and, with water, we are self-sufficient with our own bore holes, with our farming practices, where we’re doing our own composting and regenerative soil programmes and numerous things in the vineyards. It felt this was the next step to be able to encapsulate all we were doing in one rubber stamp, so to speak. Also in the community, in our local township of Sir Lowry’s Pass village, we’ve got numerous programmes.

Rollo Gabb: Well, I think that we are in an age where more people are becoming very aware of the issues of climate change and more the socioeconomic problems that exist in the world. More companies are wanting to improve and try and be forces for good. As part of being a force for good, you want to align yourselves with other companies of similar mindsets.

Will it be good for business? I think anything that demonstrates that, as a producer, you’re doing the right thing is good for business. We’ve been Fairtrade-certified since 2017. We have various other certifications. They’re all good for business but it’s not the reason you do it. The reason you do it is because you want to be as clean a producer as possible and you want to be as good as you can be. Good for us isn’t necessarily profit. Good for us is how you present yourselves as a business, your quality of your wines, although the quality of your wines isn’t purely about the palette – that, of course, is critical – it’s also about what is going on in the background of those wines and what the brand is about.

Rollo Gabb: Sadly, I don’t think that resonates enough. Therefore, to answer your initial question, no, I don’t think it’s going to be brilliant for sales at a consumer-base level. Certainly, in the on-trade and in the UK, I don’t think Fairtrade resonates. In the off-trade, I think it resonates with certain consumer groups. For instance, with The Co-op and their consumer group, South Africa [and] Fairtrade clearly resonates but it doesn’t resonate everywhere. You wouldn’t build your strategy on Fairtrade and B Corp around getting immediate consumer buy-in. The reason we’ve done it is because we’ve set off on this trajectory of wanting to be as environmentally sound as we can be, step by step and then we’ve been wanting to get better and better at it – and it seemed B Corp was the target to aim at.

Rollo Gabb: Yes. I’ve read that piece in the Financial Times as well and that article specifically referred to big multinationals who were becoming B Corp and that was potentially tainting it. I’ve noticed B Corp have changed and improved their methodology of auditing and reviewing companies, which is key. I’m not in the position to comment on what the big multinationals are doing because I haven’t seen what their B Corp submissions are. All I know is, from a Journey’s End perspective, we are trying our hardest to really excel in being a leading force in sustainability and wine and the ethical and community production of wine.

Going back to your earlier comment on whether it is good for business and the consumer buy-in: I think consumer buy-in on something like B Corp will be more with a younger generation but it’s more the big gatekeepers in some of the big groups who are going to be looking out for companies that have got the right certifications and accreditations and are doing the right thing.

Rollo Gabb: Reducing our glass weights across our range. We were averaging 404 grams bottle weight, glass weight as a business last year. I think we’re pulling that down to about 395 grams now. That is one area. We can’t switch everything out of glass but it’s to reduce your glass weights where you can. Certainly, on your bigger volume lines, you’ve got to bring them down.

We were one of the first people to introduce a cardboard bottle. We had Interpunkt on our side, which came on the heels of When in Rome. That we trialled and launched. We have had issues with it as far as the shelf-life of the product and the bottling capabilities, both in South Africa and in the UK, so we’ve had to rein that back for the time being. However, we were trying as far as we could to push the boundaries on what was happening with wine. We’re also exploring other packaging formats: smaller format, bag-in-box, various different things, pint-size bottles.

Rollo Gabb: It’s very difficult. The wine industry in itself is an incredibly difficult place to operate. We’re working with an agricultural product. You can’t just switch your vineyards to organic or switch your farm and winery off-grid. It takes significant investment and, with that, you have to be in a profitable space. We’re very lucky that I built my winery in 2012 and set it up to be as sustainable as I could at that point but it is hard. You also have product that’s in bottle and aging. We’ve got wines which are five-, six-years-old in bottle, waiting to be released. Some of them I wish were in slightly lighter glass but they’re not. It’s not a switch that you can do overnight but I think all one needs to do is get on the first rung of the ladder and start moving up the ladder as fast as you can.

Rollo Gabb: I think so and that changes from region to region. In my view, sustainability is an incredibly localised event. If you’re like Journey’s End farming in South Africa with a township on your doorstep, sustainability encompasses that township, your employees, anyone that works in the township that works for you, that lives there. It encompasses the schools there. That’s entirely different from someone who’s got some vineyards in Burgundy.

We had two years of drought where Cape Town came within days of turning the taps off. That really drove us into water conservation. All these sorts of things we’ve implemented was because we realised that to be sustainable had nothing to do with getting accredited or anything. It’s all about survival. We had to really focus on water. Energy as well. We set off with solar. That was because we wanted to be green for energy. Then you suddenly had a lot of power outages in South Africa, so it just seemed to serve us well.

Rollo Gabb: ​​​​​​​The obvious thing to do, which all the big drinks companies seem to be talking about is premiumisation because people are drinking less but better. That fits something like Journey’s End well because we are a premium wine producer entirely focused on quality. However, your younger consumer is not going to come in at the premium level. In this drive to forever premiumise, there is a risk the younger consumer is being forgotten and attention may potentially be slightly moving away from them in wine circles.

This issue we have specific to the UK of EPR, PRN – which are the latest two glass packaging taxes – on top of a multi-banded, new, alcohol duty, the safest area to be is in the premium space where the impact is less. The risk is whilst we have less and less people of a younger age drinking – and drinking alcohol full-stop – wine is becoming so unattractive at the entry level, which is the level at which any potential young consumer would come in. We’re in turn, thanks to the government, bashing our industry’s future even more.

We have the Journey’s End brand hopefully delivering as best we can on the premium piece. We have the Mount Rozier brand, where we are really absolutely focusing on flavour profiles and trying to deliver what the consumers want at an entry level and also Inzuzo, a brand we launched in March, which is our BEE, black empowerment brand, owned by the workers of Journey’s End. The brand, I think, does resonate with the younger generation and people entering the wine market who are 18, 19, 20, early 20s, up to their 30s, who want something that’s cool.

Rollo Gabb: Cocktails and beers. I think wine and wine language is quite intimidating for younger consumers. Asking for the wine list, being able to pronounce certain names, knowing your way around wine, it’s highly complex. With the pricing that’s going on in duty on alcohol and all these things that are happening, the wine profiles at entry level are changing, not necessarily for the better, which is a shame. That is the big question: how do we bring them back in?

Rollo Gabb: The no-and-low alcohol sector is attractive for that younger generation. There have been some successful products using celebrities to link with them and you can see how they would be attractive to a certain audience. We want to make real wine, which isn’t zero-alcohol. We are wine producers who are quality-focused. Whilst we are exploring the zero-alcohol space for sparkling, I think for wine it’s really trying to deliver fruit-forward, approachable, well-made wines at 12% abv or thereabouts – or, on whites, 11% – which have really got fruit in them, are easy-drinking and fresh. We think that’s what the consumer would want but the packaging and the labelling has to be simple, not pretentious and not confusing.

Rollo Gabb: We do export to the US. Fortunate in that the US is one of our smallest markets. I wouldn’t want to be heavily invested there at the moment. That said, the dollar has weakened significantly and 10-15% of the tariffs one could offset just purely on currency, I would have thought.

Tariffs are never a good thing. It’s an awful idea. That said, has globalisation worked? Globalisation hasn’t been great for the UK or any developed Western economy. However, tariffs and the method upon which they have been unleashed on the world by the US is creating absolute chaos and I think it’s the methodology that has been done so wrong. All it’s showing us is it’s all about de-risking your business. Anything you do has to de-risk it, whether that’s us putting rainwater catchment channels to de-risk us against droughts or whether it’s spreading our distribution across 52 markets, so that we are equally spread.

One of the biggest risks to Journey’s End being a South African producer of wine is we are open to the political issues within South Africa. Now, with both parties working together in government, we’re on a firm foothold at the moment. With the tariffs, one just has to try and focus on multiple markets and that is the only thing we can do. We could have had a government in the UK which suddenly decided to slap massive tariffs on South Africa, in which case, I’d have been completely stuffed as a business.

There’s some significant headwinds on the horizon and I think that, from a global perspective, these tariffs are going to mean inflation and we’re all going to feel poorer – that is if they actually happen. I’m not entirely convinced they’re going to happen.

Rollo Gabb: Other key markets would be UAE, Asia, Canada, Africa, increasingly so. We’ve got a huge focus going on with South Africa itself at the moment. The reason the UK is our biggest market is because when I started Journey’s End I was in the UK and I couldn’t be in two places at once. I had a team making wine in South Africa and I was selling it in the UK – and the UK, after all, is the biggest export market for South African wine. As a result of that, we’ve under-invested within South Africa but now I’m of a size and scale that we can really start investing properly. Ninety-five per cent [of turnover] is export.

Rollo Gabb: Firstly, it’s building our sales and marketing team within South Africa, operating by region. We have in place now distributors to be able to distribute our wines into both on-trade and off-trade. Then it’s diverting marketing resource. We’ve undertaken things like in South Africa, sponsoring Ultra Trail Running Cape Town. We are focusing on a lot of events – wine dinners, tastings, clubs, really driving the brand at that level. We are looking at a cellar door experience, which we’ve never had before.

Rollo Gabb: Well, I think that’s right but, at the same time, investing in the home of your brand has to be a good thing. With tariffs, people aren’t going to stop drinking wine, they will probably stop drinking imported wines and we’ll get a bit more isolationist, sadly. Within South Africa, wine is still incredibly good value. Tax on wine is very, very low. It is chalk and cheese with the UK, with VAT, PRN, EPR, importer margins. Whilst there might be tariffs, and everyone will potentially feel poor around the world, within South Africa, they’re still going to be drinking wine – and good wine.