Chapel Down fizz ‘cheaper than champagne and just as good’     

When Brits are popping bottles of bubbly this Christmas and New Year, Andrew Carter believes there’s more chance than ever that their bubbles will be homegrown.

The English wine industry, says Chapel Down’s chief executive, has reached its tipping point.

After years of establishing its reputation, winning awards and enticing international buyers to sample South East fizz, it is now expanding on an industrial scale.

It also helps that English sparkling wines are still on average 20 to 25 percent cheaper than champagne, he admits.

“This year, more people know they can buy English without settling for less product and change – we want to be the choice for those who may have chosen champagne once.”

Chapel Down is the most established name in the British industry, centered around Sussex and Kent, where the terroir is the same as that of their French arch-rival.

At the company’s Kent countryside headquarters in Tenterden, behind rows of meticulously cared for vines, a series of massive stainless steel fermentation tanks have been dragged into place

‘We currently produce about one and a half million bottles a year,’ Carter beams. ‘With these 17 tanks we can double the size of our company in the next five years.’

Carter joined Chapel Down, the largest winemaker in the country, in September 2021, just in time for harvest.

He took over from former CEO Frazer Thompson, who joined what was then a minnow 20 years ago to “prove something to himself” after years spent in the major league beverage industry.

At the time, the idea that England could become a bona fide rival to Champagne and Prosecco was utopian.

As a result, according to Carter, many vineyards have been passion projects rather than businesses.

“English wine is mostly plutocrats and hobbyists,” he says. ‘And I don’t mean to offend my fellow winemakers, but there is a certain kind of people who started with English wine.

“As we go forward, you have to commercialize it. You have to run it like a really big company, build a brand.’

There is another important aspect, he says. “You have to make money.”

Chapel Down is no stranger to the support of wealthy businessmen. The largest shareholder is City veteran Lord Michael Spencer’s IPGL investment company, while Sir Nigel Wray is a financier and board member.

Since taking office, Carter has reshuffled several top roles, including bringing in a former head honcho of his team at Chase Distillery and hiring finance boss Rob Smith, who started in September, from PwC – a perhaps unlikely hire for an English winemaker.

“I think the previous team did a great job for the better part of 20 years. When you come in as a CEO, you naturally want to establish your culture,” says Carter.

Doubling the business in the next five years requires a change. “What that needs and means is a different kind of financial mindset in a financial boss.”

The company sold its failing beer business, Curious Brewing, before Carter joined. He is now focusing on sparkling wine again.

A 50-50 split between sparkling and still last year will change to 70-30. Carter is also considering moving the company from challenger Aquis Exchange to AIM, the junior market of the London Stock Exchange. This would help it raise more money, which he says may be needed in the future.

Partnership: Chapel Down is a sponsor of the annual Oxford vs Cambridge University Boat Race

The group already has a ‘whole army of retail shareholders’, raising £6.9 million last year. Part of this is reserved for a new winery that wants to build it in Canterbury.

A listing on AIM could also bolster the company’s shares – since Carter joined Chapel Down, its market value has dropped from £85m to around £56.5m today.

But the half-year results released in September show profits have risen to £490,000, from £149,000 in the same period of 2021.

It also had a record harvest this year, producing about 2,000 tons of grapes, compared to 1,400 in 2021.

In the long run, this should help it go from 1.5 million bottles of wine a year to 9 million, which is the same as the entire English wine industry last year.

It has 750 hectares planted with vines, which should increase to 900 by 2023. But it is chasing another 1,500 hectares in the coming years.

This isn’t Carter’s first taste of wine. His career history sounds more like a pub bar than a resume – he’s worked with Bacardi, Bombay Sapphire, Strongbow, San Miguel, Gray Goose and Bulmers.

Most recently, he served as the general manager of Chase Distillery for four years, which was then snapped up by FTSE 100 group Diageo.

Carter and Thompson were introduced by Martin Glenn, chairman of Chapel Down and former CEO of the Football Association. Since his last leadership role led to his company being sold, have there been any takeover offers for Chapel Down?

“I can categorically say that’s not the case,” he says. “And I don’t expect that to be the way we are funded.

“With the support we have from our investors and shareholders, that is very unlikely.”

He would have much preferred Chapel Down to be ‘in charge’ and be the company that took over its competitors. Carter is coy about whether anything is in the pipeline, but says deals that grow the company are a “stated goal.”

There are a number of other rival producers – most notably Gusbourne, Nyetimber and Rathfinny – but Carter says there is more to be gained from working together now that the industry is in this nascent stage.

‘While people compete with English wine companies for a share of the market, we don’t see them as the main competitors. Our competitor is Champagne.’

But for the homegrown industry to reach the big leagues, it needs more of a tourism industry. Many winemakers – especially in Sussex – have pushed through the need to add accommodation if they want to serve visitors Napa Valley style, rather than people on day trips from London.

Chapel Down’s headquarters in Tenterden is open to the public to wander around, offers wine tasting and has an AA Rosette and Michelin Bib restaurant called The Swan.

“We could expand the tasting rooms, do something about the restaurant, or put in accommodations — we have the option of putting boom boxes and rooms in and around the winery.” Vines have been planted in England since Roman times, but its emergence over the past 50 years has attracted overseas fans.

In terms of customers, Scandinavians, Americans and Japanese are enthusiastic – but exports only make up about 4 percent of the industry’s current turnover. Competition is also closing in, with international growers increasingly looking to set up hubs in South East England, which has the same terroir as France’s Champagne region and an ideal climate due to the effects of climate change.

The patchwork of the Kent and Sussex countryside can make it difficult for producers to buy huge tracts of land, although big names like Taittinger have already made ground. “Especially from a French point of view, the nature of their weather conditions is becoming more and more dramatic, such as extreme frosts,” says Carter.

“Whether it’s the guys in Champagne or an Australian company, they’ll look at the world map and think, ‘We’ve got to be in the UK somewhere.'”