Diversification through the generations - a farm evolving
Steve and Linda Hammonds vineyard/farm is adjacent to Renwick, the heart of Marlborough wine country. The 32 hectare vineyard is planted on the flood plain of the Wairau River including a superb terrace (hence the name of the wine). Soils consist of washed stone, alluvial gravels and sandy silt wisps.
The property has been irrigated since 1983 when a 15 metre well was developed, drawing 25 000 gallons/hour from the Wairau aquifer.
Other vineyards to the South have had to buy into the controversial Southern Valleys Irrigation Scheme (the pumping station for the scheme is adjacent to Steves farm) owned by the Marlborough District Council.
Around 24 hectares remains in farm land where Steves father Murray runs some sheep and cattle.
In 1842 David and Mary Ann Hammond and their first three children immigrated to the Nelson colony from Gravesend, England. In 1843 David was contracted to survey the lands around the Wairau. This first contact with the Marlborough district eventually led to the purchase of 120 hectares in the Wairau in 1870 upon which a farming venture commenced.
By 1935 Steves grandfather and Great Uncle had bought over 300 hectares of rubbishy land sweeping from the West Coast Road to Conders Bend. That land originally supported two families farming sheep and cattle.
Steves father Murray continued to be a strong pioneer for the district when he planted a 35 hectare cherry orchard in 1981. Ironically, the vine pull in Marlborough was underway around the same time.
Cherries became a huge horticulture crop in Marlborough and Murray was instrumental with Marlborough Fruit Producers in the building of a huge pack house to service the Blenheim area. Cherries promised extremely lucrative returns of up to $15/kg and a six tonne/acre crop meant a gross return of between $80 000 to $100 000 an acre. Annual rain events in December decimated quality & the expected export returns consistently did not materialise.
Capital costs could be high, particularly when considering the protective covers held up by substantial eight metre poles.
Japan was targeted as the main export market for the fruit, followed by Korea and Taiwan but by the nineties the markets had softened and the promised big returns had disappeared.
Determined to stay ahead of the game Murray diversified the then 280 hectare property again in the mid 80s by 5 hectares of Royal Gala apples. This initial planting was increased at its peak to 15ha of export apples. In good years the apples paid $25 000 to $30 000 gross an acre but by 1994 with the apple market levelling off and the emergence of viticulture in the region Murray and his sons were ready to diversify again.
Steve was in a farming partnership with his brother Jeff on part of the home farm. Determination to keep the farm in the family for generations to come drove the Hammond family to plant the first Sauvignon Blanc grapes in 1994 with Steve planting 6 hectares on contract to Corbans and Murray planting 12 hectares for Grove Mill.
Apple returns supplied the capital cash needed to re-develop the vineyard. Setting up costs ranged between $8000 to $10 000 per acre. A further 5 hectares was planted in 1995 under contract to Whitehaven.
By 2000 Steve and Linda had 28 hectares of grapes including Pinot Noir, Pinot Gris and Sauvignon Blanc and 4 hectares of cherries following the bulldozing of the apple orchard in 1999.
Steve believed that diversification between the varieties of grapes was as good as diversification between different crops - therefore diminishing the risk.
Steve and Linda started out by growing Sauvignon Blanc, Pinot Noir, Pinot Gris and Riesling for Whitehaven on contract - whom they have a close relationship with. They have also contracted grapes in the past to Framinghams and Corbans.
A commercial contract gives the winemaker input while supplying the grower with knowledge and expertise. The winemaker organises the contractors for harvesting/pruning although all input costs of the crop are met by the grower. In that manner costs are driven from the winery back to the grower.
Steve believes Sauvignon Blanc is the cash cow of the industry and is reasonably easy to grow, averaging around 5 tonne/acre.
A reasonably high price of $2700 per tonne including quality bonuses can be expected by good growers. The Hammonds attempt to meet that standard (by per tonne returns) in order to be in the top 15% of growers in the region.
And so by 2002 Steve and Linda, looking to further add value to their business, decided to convert a small tonnage of their grapes into their own labelled wine.
The decision stemmed from the 2002 harvest when Whitehaven winemakers commented on the quality of the Hammonds Sauvignon grapes.
Some 500 cases of Sauvignon Blanc was made and bottled by winemaker Sam Smail. In order to make the wine the Hammonds had to buy their own storage gear including tanks, barrels and picking bins. If they had to set up a winery themselves they would have been unable to meet the costs but using Whitehavens premises meant the venture was viable.
Winemaking is an expensive business with the formula being for every $1 spent in the vineyard for growing grapes, $4 needs to be spent for infrastructure in the winery to make the wine.
But what to name the wine? Initially plans for a traditional label with the Hammond family name and crest seemed promising but on a trip to Waiheke Island the couple came up with the idea of using the name of the farm Terrace in the label and came up with Terrace Heights Estate - cleverly abbreviated to T.H.E. Terrace Wine Company was formed as a stand alone business with a financial partner & friend Grieg Taylor (a highly successful NZ fruit and produce exporter and principal of FRESHCO).
The couples entire marketing strategy for the label was based around winning a medal at the Air New Zealand Wine Awards in 2002. All was looking promising until the wine awards when T.H.E missed out on any medals (due to the entry being lost by the organisers along with many others that year). So it was left up to Steve and Linda to sell the wine which was difficult with little market exposure.
With no previous experience in marketing the couple began to wonder if they had made the right decision. However their doubts were decreased when Terrace Heights Estate won the NZ Wine Society Trophy for Champion Sauvignon Blanc in 2003 at the Royal Easter Show. Within three weeks T.H.E Sauvignon Blanc 2002 had sold out.
Steve believes the trophy gave them confidence although they knew that 99.5% of the population still didnt know anything about their wine, the critics and more importantly the traders did.
2003 became a busy year with contracts with exporters in the USA and UK and a general buzz about Terrace Heights Estate. In Steves words during those early stages marketing of the wine totally took over their lives and the trophy set an uncomfortable precedent they werent entirely sure they could live up to.
Contracts into the United Kingdom via Lay & Wheeler and the US looked promising for the 2003 vintage with plans for 3000 cases of Pinot Gris, Pinot Noir and Sauvignon Blanc. However, a disaster frost on November 17 2002 (ironically the same night as the Air New Zealand Wine Awards) destroyed 70 % of Terrace Heights Estate production.
Sauvignon Blanc was hardest hit. The grape that normally yielded 5 tonnes/acre only managed 0.75 tonnes/acre in places. Pinot Noir was not as badly affected.
Coupled with that was a contract fall over with Pinot Noir in the United States leaving the Hammonds with a lot of previous Pinot Noir to sell and the coming seasons vintage.
However the lower production volume meant demand was high with T.H.E Pinot Gris selling out within weeks of hitting the shelves. T.H.E also proved its worth when it took home another Gold medal at the Royal Easter Show - this time for Pinot Noir.
On the back of that positive critique the Hammonds grew many of their grapes without contract in 2004. A bumper harvest meant much of the extra yield was absorbed by the increase to 5000 cases of T.H.E wine.
During the last season Steve and Linda extended their business again by adding a second label titled Murrays Barn - a mid priced Sauvignon Blanc and Pinot Noir. Fittingly the label was named after their father and a barn he used on the farm which is still standing today.
Altogether they produced 7000 cases for sale in the last harvest and are slowly selling the stock off. Steve is unsure if he regrets the decision to make and market their own wine. Having been full circle from contract growing to wine making he understands the advantages and disadvantages on both sides and only time will divulge the success or otherwise of T.H.E.
While Steve and Linda are hands on operators they both realised the need to have somebody wake up in Auckland thinking how am I going to sell T.H.E wine today. Although they had managed to launch the brand on the market with little knowledge of how the industry worked, the time consumed in continuing to promote their wine was becoming difficult.
Six months ago the couple employed Grieg Taylors wife Annabel to market T.H.E. It is a decision Steve believes was vital to the operation - giving him the chance to concentrate more on his area of expertise - growing the grapes.
Following on from that the wine company has been formed as a stand alone business set aside from the primary partnership of growing grapes on contract. This was done to keep the so called entrepreneurial spirit away from the bread & butter financially. However the profits from the grape growing enterprise have been injected into supporting & establishing the brand.
Although there has been a huge increase in viticulture in Marlborough Steve is adamant that there is only one Marlborough Sauvignon Blanc and so long as it is good quality wine that protects the reputation of the area it can never be oversupplied. He points out that vineyards in California are bigger than the entire size of the Marlborough wine industry.
Problems may only arise if far too much average wine is produced, he says. Marlborough Sauvignon Blanc is a totally different kettle of fish to anything else in New Zealand. Its becoming an icon and it opens doors for a lot of other New Zealand products. Theres a wine lake around the world but you can only grow Marlborough Sauvignon in Marlborough.
Steves horticultural experience in the apple and cherry industry meant growing grapes was not a difficult crossover to make. Of all the grapes Sauvignon Blanc is the easiest to manage with very few problems apart from splitting when it is close to maturity which Steve notes is similar to osmosis in cherries.
Pinot Noir can be tough to manage. Because it is planted closer it is a less vigorous grape and can have a lot of variation between rows. It is extremely susceptible to cold weather. Steve believes the secret to growing a good Pinot in Blenheim is to have a low crop level. Whereas Sauvignon Blanc is better for different variations in soils within rows, Pinot needs the consistency to be the same - highlighting the differences between the two.
The property has been irrigated since 1983 when a 15 metre well was developed, drawing 25 000 gallons/hour from the Wairau aquifer.
Other vineyards to the South have had to buy into the controversial Southern Valleys Irrigation Scheme (the pumping station for the scheme is adjacent to Steves farm) owned by the Marlborough District Council.
Around 24 hectares remains in farm land where Steves father Murray runs some sheep and cattle.
In 1842 David and Mary Ann Hammond and their first three children immigrated to the Nelson colony from Gravesend, England. In 1843 David was contracted to survey the lands around the Wairau. This first contact with the Marlborough district eventually led to the purchase of 120 hectares in the Wairau in 1870 upon which a farming venture commenced.
By 1935 Steves grandfather and Great Uncle had bought over 300 hectares of rubbishy land sweeping from the West Coast Road to Conders Bend. That land originally supported two families farming sheep and cattle.
Steves father Murray continued to be a strong pioneer for the district when he planted a 35 hectare cherry orchard in 1981. Ironically, the vine pull in Marlborough was underway around the same time.
Cherries became a huge horticulture crop in Marlborough and Murray was instrumental with Marlborough Fruit Producers in the building of a huge pack house to service the Blenheim area. Cherries promised extremely lucrative returns of up to $15/kg and a six tonne/acre crop meant a gross return of between $80 000 to $100 000 an acre. Annual rain events in December decimated quality & the expected export returns consistently did not materialise.
Capital costs could be high, particularly when considering the protective covers held up by substantial eight metre poles.
Japan was targeted as the main export market for the fruit, followed by Korea and Taiwan but by the nineties the markets had softened and the promised big returns had disappeared.
Determined to stay ahead of the game Murray diversified the then 280 hectare property again in the mid 80s by 5 hectares of Royal Gala apples. This initial planting was increased at its peak to 15ha of export apples. In good years the apples paid $25 000 to $30 000 gross an acre but by 1994 with the apple market levelling off and the emergence of viticulture in the region Murray and his sons were ready to diversify again.
Steve was in a farming partnership with his brother Jeff on part of the home farm. Determination to keep the farm in the family for generations to come drove the Hammond family to plant the first Sauvignon Blanc grapes in 1994 with Steve planting 6 hectares on contract to Corbans and Murray planting 12 hectares for Grove Mill.
Apple returns supplied the capital cash needed to re-develop the vineyard. Setting up costs ranged between $8000 to $10 000 per acre. A further 5 hectares was planted in 1995 under contract to Whitehaven.
By 2000 Steve and Linda had 28 hectares of grapes including Pinot Noir, Pinot Gris and Sauvignon Blanc and 4 hectares of cherries following the bulldozing of the apple orchard in 1999.
Steve believed that diversification between the varieties of grapes was as good as diversification between different crops - therefore diminishing the risk.
Steve and Linda started out by growing Sauvignon Blanc, Pinot Noir, Pinot Gris and Riesling for Whitehaven on contract - whom they have a close relationship with. They have also contracted grapes in the past to Framinghams and Corbans.
A commercial contract gives the winemaker input while supplying the grower with knowledge and expertise. The winemaker organises the contractors for harvesting/pruning although all input costs of the crop are met by the grower. In that manner costs are driven from the winery back to the grower.
Steve believes Sauvignon Blanc is the cash cow of the industry and is reasonably easy to grow, averaging around 5 tonne/acre.
A reasonably high price of $2700 per tonne including quality bonuses can be expected by good growers. The Hammonds attempt to meet that standard (by per tonne returns) in order to be in the top 15% of growers in the region.
And so by 2002 Steve and Linda, looking to further add value to their business, decided to convert a small tonnage of their grapes into their own labelled wine.
The decision stemmed from the 2002 harvest when Whitehaven winemakers commented on the quality of the Hammonds Sauvignon grapes.
Some 500 cases of Sauvignon Blanc was made and bottled by winemaker Sam Smail. In order to make the wine the Hammonds had to buy their own storage gear including tanks, barrels and picking bins. If they had to set up a winery themselves they would have been unable to meet the costs but using Whitehavens premises meant the venture was viable.
Winemaking is an expensive business with the formula being for every $1 spent in the vineyard for growing grapes, $4 needs to be spent for infrastructure in the winery to make the wine.
But what to name the wine? Initially plans for a traditional label with the Hammond family name and crest seemed promising but on a trip to Waiheke Island the couple came up with the idea of using the name of the farm Terrace in the label and came up with Terrace Heights Estate - cleverly abbreviated to T.H.E. Terrace Wine Company was formed as a stand alone business with a financial partner & friend Grieg Taylor (a highly successful NZ fruit and produce exporter and principal of FRESHCO).
The couples entire marketing strategy for the label was based around winning a medal at the Air New Zealand Wine Awards in 2002. All was looking promising until the wine awards when T.H.E missed out on any medals (due to the entry being lost by the organisers along with many others that year). So it was left up to Steve and Linda to sell the wine which was difficult with little market exposure.
With no previous experience in marketing the couple began to wonder if they had made the right decision. However their doubts were decreased when Terrace Heights Estate won the NZ Wine Society Trophy for Champion Sauvignon Blanc in 2003 at the Royal Easter Show. Within three weeks T.H.E Sauvignon Blanc 2002 had sold out.
Steve believes the trophy gave them confidence although they knew that 99.5% of the population still didnt know anything about their wine, the critics and more importantly the traders did.
2003 became a busy year with contracts with exporters in the USA and UK and a general buzz about Terrace Heights Estate. In Steves words during those early stages marketing of the wine totally took over their lives and the trophy set an uncomfortable precedent they werent entirely sure they could live up to.
Contracts into the United Kingdom via Lay & Wheeler and the US looked promising for the 2003 vintage with plans for 3000 cases of Pinot Gris, Pinot Noir and Sauvignon Blanc. However, a disaster frost on November 17 2002 (ironically the same night as the Air New Zealand Wine Awards) destroyed 70 % of Terrace Heights Estate production.
Sauvignon Blanc was hardest hit. The grape that normally yielded 5 tonnes/acre only managed 0.75 tonnes/acre in places. Pinot Noir was not as badly affected.
Coupled with that was a contract fall over with Pinot Noir in the United States leaving the Hammonds with a lot of previous Pinot Noir to sell and the coming seasons vintage.
However the lower production volume meant demand was high with T.H.E Pinot Gris selling out within weeks of hitting the shelves. T.H.E also proved its worth when it took home another Gold medal at the Royal Easter Show - this time for Pinot Noir.
On the back of that positive critique the Hammonds grew many of their grapes without contract in 2004. A bumper harvest meant much of the extra yield was absorbed by the increase to 5000 cases of T.H.E wine.
During the last season Steve and Linda extended their business again by adding a second label titled Murrays Barn - a mid priced Sauvignon Blanc and Pinot Noir. Fittingly the label was named after their father and a barn he used on the farm which is still standing today.
Altogether they produced 7000 cases for sale in the last harvest and are slowly selling the stock off. Steve is unsure if he regrets the decision to make and market their own wine. Having been full circle from contract growing to wine making he understands the advantages and disadvantages on both sides and only time will divulge the success or otherwise of T.H.E.
While Steve and Linda are hands on operators they both realised the need to have somebody wake up in Auckland thinking how am I going to sell T.H.E wine today. Although they had managed to launch the brand on the market with little knowledge of how the industry worked, the time consumed in continuing to promote their wine was becoming difficult.
Six months ago the couple employed Grieg Taylors wife Annabel to market T.H.E. It is a decision Steve believes was vital to the operation - giving him the chance to concentrate more on his area of expertise - growing the grapes.
Following on from that the wine company has been formed as a stand alone business set aside from the primary partnership of growing grapes on contract. This was done to keep the so called entrepreneurial spirit away from the bread & butter financially. However the profits from the grape growing enterprise have been injected into supporting & establishing the brand.
Although there has been a huge increase in viticulture in Marlborough Steve is adamant that there is only one Marlborough Sauvignon Blanc and so long as it is good quality wine that protects the reputation of the area it can never be oversupplied. He points out that vineyards in California are bigger than the entire size of the Marlborough wine industry.
Problems may only arise if far too much average wine is produced, he says. Marlborough Sauvignon Blanc is a totally different kettle of fish to anything else in New Zealand. Its becoming an icon and it opens doors for a lot of other New Zealand products. Theres a wine lake around the world but you can only grow Marlborough Sauvignon in Marlborough.
Steves horticultural experience in the apple and cherry industry meant growing grapes was not a difficult crossover to make. Of all the grapes Sauvignon Blanc is the easiest to manage with very few problems apart from splitting when it is close to maturity which Steve notes is similar to osmosis in cherries.
Pinot Noir can be tough to manage. Because it is planted closer it is a less vigorous grape and can have a lot of variation between rows. It is extremely susceptible to cold weather. Steve believes the secret to growing a good Pinot in Blenheim is to have a low crop level. Whereas Sauvignon Blanc is better for different variations in soils within rows, Pinot needs the consistency to be the same - highlighting the differences between the two.