03 December 2020
Yealands Wine Group has announced the strategic sale of four vineyard sites in Marlborough – Confluence, Brackenfield, Willow Flat and Medway – to the $50 billion, taxpayer-owned NZ Super Fund.
Representing 187 planted hectares and producing majority sauvignon blanc and pinot noir, the vineyard portfolio will be overseen by FarmRight, the manager of the NZ Super Fund’s rural investment portfolio in New Zealand.
The sale includes long-term supply arrangements and an offer from FarmRight of employment for Yealands staff based at the sites. Yealands’ brand portfolio of sustainably produced wines will remain unchanged.
Yealands Wine Group CEO, Tiffani Graydon, says the sale represents a significant capital raise to reinvest and grow its business. “It has always been our ambition to be recognised globally as a leader in sustainable winemaking and work is ongoing to maintain our leadership in this area. This land sale is about supporting our business strategy for accelerated growth, while achieving financial sustainability for the future, including debt reduction.
“Capital from the sale will enable us to accelerate our premiumisation plans and global growth strategy while retaining quality supply. The funds will be used to invest in brand growth in the US, UK and Europe, and with the vineyard development we’re undertaking in the Awatere Valley, this will result in a considerable net gain in supply for the future,” says Tiffani.
The investment will also extend to business operations, including transformative systems upgrades to support Yealands’ teams and customers globally. A portion of funds will also contribute to reducing business debt.
Tiffani says that demand in Europe and the UK is incredibly strong. “The Yealands brands are well placed. Consumers want great quality, sustainable products and ours is a compelling story of Kiwi entrepreneurialism that resonates strongly with consumers around the world. Premiumisation of the Yealands range internationally is a significant part of our growth plan and the results in market since our brand reset last year give us real confidence that we’re on the right track.”
NZ Super Fund Direct Investments, Megan Glen, says “We’re pleased to have acquired these four vineyard sites. The properties are a valuable addition to our growing portfolio of rural land across New Zealand, which we see as providing diversification benefits to the Fund and will allow us more access to the successful New Zealand viticulture sector.
“As a long-term investor, we can continue to add value to the properties through the application of patient capital and high standards of operation and governance. We look forward to working with Yealands Wine Group, through our farm manager FarmRight, with a particular focus on supporting sustainable practices.”