Château d'Agel (B): Living the dream

In early 2007, some three and a half years after realizing his dream of acquiring the Château d’Agel vineyard in the Languedoc region of southern France, Robin Budowski took stock of the situation. Overall, things had not evolved exactly as planned. He was still unable to live off the property and devote all of his time to managing it. His second job, as chief wine purchaser for one of the largest wine distributors in Switzerland, paid his salary and allowed him to stay close to market players which was an advantage. Returns from his vineyard were below expectations for a combination of reasons: (1) slower than expected replanting of vines; (2) issues with the distribution channels; (3) a production level just short of 130,000 bottles, with prices below expectations; and (4) a general downward trend in wine real estate prices. It would probably take longer to reach positive cash flow, than initially planned. As a result, several French investors were trying to get out of the venture and claim their money back, creating personal tensions and binding management capacity for almost a year. However, there was some good news too. The jump in quality of the property’s wines was phenomenal, with their top product, not only winning a Gold Medal at the Concours Mondial de Bruxelles in 2006 but also being included in the renowned Guide Hachette 2006 on its first presentation. Clearly, the new winemaking equipment and blending had paid off. The average selling price per bottle was up some 200%, reflecting the quality improvements and the better distribution. The local authorities were hailing the property as an example of what ought to be done for the Minervois appellation. A third label, Bergerie d’Agel, was being introduced to commercialize generic Minervois bought from other wine producers in the region. Finally, sales were brisk so far in 2007, with over 200,000 bottles on order by March. Robin knew he needed to look for another round of financing to complete the turnaround. It was time to revisit the last three years and decide on a course of action for the next three.