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Tiffany Nugan, Nugan Estate, NSW
Name: Tiffany, Matthew and Michelle Nugan
Nugan Estate: the only way is up
G&W: With Nugan's history in fruit and vegetables, what made you decide that wine grapes were the way to go?
Tiffany Nugan: You have to go a way back to understand it - we really had to diversify. We started of in fruits and veg when my grandfather emigrated from Spain in 1940. Then when my father took over in the 1960s he significantly grew the business and we basically came the major supplier of fruits and vegetables to the supermarkets down the eastern seaboard. We got into juice in the domestic market, and that was all going extraordinarily well but then in the mid 1980s both those industries became quite unprofitable as supermarkets went direct to grower and cheap imported juice flooded the market. At that time, my father died suddenly and my mother took over the family business, which was at the time really struggling. But what Mum found out was that in this industry you have to continually spread your risk to succeed.
So that became one of our key policies, and that's always remained. We entered the export juice market and became - and still are - the main supplier of carrot juice to Japan. So we do 70,000 tonnes of carrot juice, if you can believe it!
Then in the early 1990s having built that up, Mum said we had to keep diversifying. At that time Wine Strategy 2025 was released, which said there would be a world shortage of wine by 2025. At the time we had lots of properties which were fruit and veg, and a fair amount of water allocation, so Mum decided wine would be Nugan's next industry. We had the export know-how from the juice, and juice manufacture and winemaking are both extremely technical and science-based. She approached Southcorp and we started planting vineyards in the Riverina. We now own 590 hectares in Riverina, King Valley and McLaren Vale. We always knew we were going to release our own label, and in 2000, we did!
Nugan Estate has seen enormous expansion in recent years, how did you manage this period of rapid growth, from a business perspective?
We're 100% family-owned and always intend to be. One of our main reasons for success is that we can make decisions on the spot. But as far as growth of the business, we've had to underpin that with different styles of management. We've had to employ people with the right skills for a business this size. For example, we employed for the first time a CFO which has been crucial for growing and managing a business of this size. Also we obviously had to employ experts in the wine industry such as in winemaking and viticulture. But for a business our size, we grew the business on very small staff levels.
Also we've had to plan and put strategies in place to succeed. Very early on our CFO made us do a strategy session. In that session, we realised we needed to grow significantly in order to succeed. In the Australian wine industry there's small, and reasonably large, there wasn't much in between. Our winery as far as size was in no mans land. So we had to write a strategy to get us there, and if we hadn't done that strategy, we'd be in trouble now as it made us think ahead about what we needed in the business and how to get that growth.
For example my brother, Matthew, until the last 18months ran the whole export wine business on his own - with amazing success. But now the business is so big, we've had to restructure and grow that team to service the markets properly. So Matthew is now general manager of Nugan Estate and now has a whole Export Sales Team that report to him.
How much of your production is exported?
90%. Our greatest markets are Ireland and Denmark. We are also growing very well in Canada. We've only launched in the UK a year ago, so we hope that's going to come up too, and Canada's doing well for us as well. But Europe in particular is our main market.
How do you market Nugan products, domestically and overseas?
We basically listen to the market and respond. That was one thing about being brand new, we could really give the market what it wanted, and we could respond quickly. Our main marketing tool is that we're family owned and we work the market hard.
On the distribution side, Matt worked really hard with our distributors on how they were going to sell our products - coming up with sales and marketing strategy of how to sell it. A lot of people just dump their portfolio with the distributor without actually working out how we're going to sell it in your market. So he spends a lot of time with then reviewing that. I mean until this year he's travelled 9 months a year working those markets getting out with the reps on the road. We see our distributors as our partners and work with them to make it a success.
But now we're working very hard on PR plans, marketing and advertising that kind of thing, but our initial success has really just been down to pounding the pavement.
What is the most important element behind the Nugan brand?
It's definitely that we're family owned and estate grown, I keep saying it but it's true! We own our own vineyards and control it from the ground up. So I think we can deliver on quality better than some others can, we can be 100% quality focussed.
Also at the time the industry was going through a lot of change, there was over-supply and there was a lot of negative feeling within the Australian wine market. But we've never known any different to that, we weren't scared of that - it's always been hard! People who meet us say that we're unbelievably passionate, and we just get out there and knock on doors till they open.
What is the next step for Nugan Estate?
Next I think it's about consolidating our market share where we are strong, and building our brand. For the last few years we've just been out there getting the sales and focusing on that, so now we're looking at more detailed marketing and PR plans to ensure our brand growth and longevity. Also hopefully growing markets where we haven't had the manpower before. You can never be complacent, keeping business is as hard as growing it.
Of all the labels you produce, which do you consider to be your most successful wine?
Probably two, our Cookoothama Botrytis Semillon from the Riverina. We've done phenomenally well with that and built ourselves a little niche in that market. And the other one would be our Nugan Estate McLaren Vale Shiraz. Our McLaren Vale vineyard - which is only 12ha - produces great Shiraz and we sell out every year.
What advice would you give to another winery that was considering expanding their business?
What shocked us joining the wine industry is that you really need to watch your cash-flow. It's not like other business, the turn-around on cash-flow is very long, and you need to plan for that. Don't over expand, and make sure you've got enough there to service your market, because you're generating equity in that market. There's a lot of cash-flow that needs to go into the brand and sometimes people put it all into price and don't recognise that there are other costs to come. The wine industry is tough because you need to hold so much stock. Be mindful of the cash-flow necessary to support that growth. Brands always have to come first, and sometimes that does mean sacrificing volume.
Be prepared to be knocked back. And remember, what works in one market may not work in another - for example brands that work in Australia won't necessarily work in Ireland, so it's about adaptability.
Also, never lose contact with the ground level of sales. What can be dangerous is that when you expand the decision-maker is no longer at the coalface and you can lose touch with what's actually happening out there. And you can lose things quite quickly if you're not in touch with what's going on.
Really, just keep knocking on the doors. Eventually they will open!
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