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Another (Quiet) Track Record of Quality: South Africa's Mulderbosch

Photo by: David Yellen

Posted: Feb 2, 2009 12:23pm ET

In a recent blog post, I took a look at the quiet track record of Thelema, one of South Africa’s best Cabernet producers. Mulderbosch could arguably be Thelema’s alter ego— it’s known for white wine more than its reds (in contrast to Thelema), and it too has quietly put together an impressive track record.

Co-owned by head winemaker Mike Dobrovic, Mulderbosch has been in the U.S. market since the early 1990s. Before Dobrovic could set about planting vines on the property in Stellenbosch (started in 1990), he had to clean up large piles of broken glass left over by the previous tenant who would toss his used bottles out the window of the house.

Sauvignon Blanc, of course, has a well-cemented reputation for producing crisp, lively, light-bodied wines with citrus, chive and chalk notes. For the most part, they’re meant for immediate consumption, though there are some exceptions. Among the examples are the wines of the late Didier Dagueneau and the Château Haut-Brion white. (Apparently my colleague James Laube has just put California’s Merry Edwards on this short list of Sauvignon Blanc greats.)

As Thelema’s Cabernet represents the steady qualitative progress of the Cape’s reds, so does Mulderbosch represent improvement with the Cape’s whites. There’s been an explosion of Sauvignon Blanc bottlings from South Africa in recent years, and time will tell how many wines from this new generation can match or perhaps exceed Mulderbosch’s track record.

In the meantime, Mulderbosch isn’t sitting on its laurels. Dobrovic has continued to experiment and tinker. According to the winemaker, “We are getting more trellised Sauvignon Blanc now and from three main production areas - Stellenbosch, Durbanville and Elgin. The ripening times differ quite a bit, with the Elgin fruit coming in last.”

This combination of different fruit from varying micro-climates adds to the complexity of the final blend. In addition, Dobrovic has also made drastic changes in the yeast strains used on the winery’s Sauvignon Blanc.

“I used to split a day's juice into as many as four different tanks and then ferment each with a separate yeast,” he says. “Now however we co-inoculate using up to six yeast strains [in each tank]. Each year is an experiment as some yeasts perform better in certain vintages. Suffice to say that it is enormously exciting, and the complexity from the co-inoculations compared to fermentation with a single strain is wonderful to see. Simply put, each strain brings its own set of enzymes into play, which alters the final composition of the wine.”

“The other major change is I let the wines lie with full lees for a longer period after dryness. Besides increasing mouthfeel, this allows the enzymes to work their magic for a longer period. The major advantage is the increase of glutathione (an amino acid with strong antioxidative properties) so the wines should age even better than before.”

Mulderbosch currently farms 56 acres of vines, plus brings in some purchased fruit. The winery now produces 90,000 cases a year, about 22,000 of which are Sauvignon Blanc.

Following are notes on three older vintages of Mulderbosch Sauvignon Blanc that show noticeable improvement over the short range of vintages; the most recent of these, the 2003, is the best of the three, showing excellent cut and definition. (The current 2007 vintage retails for about $20 a bottle. It’s one of the best values around if you like a nervy, bright, rapier-sharp Sauvignon Blanc that can withstand a little bottle age.)

Mulderbosch Sauvignon Blanc Stellenbosch 2003
Very expressive, with lemon verbena and lemon pound cake notes rippling through a racy core of gooseberry and grapefruit rind. The lengthy finish has lost its severity, but still retains a refreshing tangy note. From a cool vintage with excellent acid balance, according to Dobrovic. I originally reviewed this at 92 points, with a drink recommendation of best from 2004 through 2006.

Mulderbosch Sauvignon Blanc Stellenbosch 2001
Mature, with verbena and thyme notes backed by a still lively chive note. White asparagus and floral notes fill out the finish. Still has some zip, though a nutty hint is peeking in on the finish now. A year with good rainfall and above average acidity, according to Dobrovic. I originally reviewed this at 90 points, with a recommendation to drink through 2003.

Mulderbosch Sauvignon Blanc Stellenbosch 1999
Fully mature, with asparagus, straw and chamomile notes backed by a hint of candle wax. This is a touch past prime for me, and the weakest of the three vintages here. A difficult year, according to Dobrovic. Originally reviewed at 88 points (by another editor), with a recommendation to drink upon release.

David Harper
Annapolis MD —  February 2, 2009 5:57pm ET
I recall in 2003 that Mulderbosch's 2003 SB, the highest rated of that year, was selling for $$4.25 in Capetown bottle shops and for $23+ here. I asked the editor of the "Annapolis Capital" (who does a weekly wine column) why the huge markup and he gave me the song and dance -- shipping and related distributor cost in Maryland. However, I was in Amman in 2003 and was able to negotiate a pallet price of about $6/bottle to Aqaba. So, who are the crooks in this business and why is it that, as you say, there's good news and bad news with SA wines. Quality's up for current releases but the prices are getting out of hand. Shades of 2003.
Dana Buys
South Africa —  February 3, 2009 5:01am ET
David, I can assure you that the winerie also battle with the same problem, as they do not see the difference in pricing and would like to offer the best possible value to the consumer! The heart of the problem goes to the complex US set of 51 liquor laws and its 3-tier importer / distributor / retailer channel requirements.

Add in the costs of shipping, insurance, import taxes and duties plus US domestic shipping costs and you end up with a hefty multiplier from winery to consumer.

Depending on the cost of the wine, the multiplier typically varies between 3 and 4. The impact is greater on cheaper wines as a bunch of the costs (eg transport and some of the duties & taxes) stay the same regardless of price. On average you can work on a retail price of 3.5 times the FOB price paid to the winery.

The only way to change this, is by getting the US laws changed significantly and thus encouraging far greater competition in the distribution channel. Right now one would assume that your government is facing much larger challenges and change may not come soon!
Karl Mark
Geneva, IL. —  February 3, 2009 8:38am ET
Thanks for the info Dana.
James Molesworth
February 3, 2009 8:53am ET
David: I can't comment specifically as to what you experienced six years ago, but Dana (who owns a winery in SA) does a good job of layng out the cost details.

Don't forget there's also an exchange rate at work here, and the South African rand has gone up and down vs. the dollar significantly over the years.

I think it's also important to note that Mulderbosch SB, along with many, many other SA wines, have held their prices steady for several years now. Which means the wineries face a shrinking profit margin from time to time as currencies fluctuate, in order to hold on to what market share they do have in this market. Mulderbosch Sauvignon Blanc was $20 for the '99 vintage, and it's $21 for the '07. That's pretty consumer-friendly...
David Harper
Annapolis MD —  February 3, 2009 1:02pm ET
The rand in 2003 was 12/USD. It's now .098/USD so Dana is not able to take advantage of the drop. I agree with Dana that the chain of U.S. importers/distributors/wholesalers is where the problem lies and Maryland is one state of a relative few that does not even permit direct import from U.S. wineries. Distributors have their arm on the State legislature and there's nothing wine buyers can do about it. I mentioned the $4.25/$23 markup as one that I was able to view from both ends -- Capetown's Caroline's Fine Wines and Vaughan Johnson and Wine Spectator's quoted price for 2003 Mulderbosch. I could not agree more than laws need to change and that distributors etc. not strangle U.S. retailers and consumers. Retail markup here is very small.
David Harper
Annapolis MD —  February 3, 2009 1:32pm ET
Dana and James, this is just a brief followup to my last note not yet posted. The owner of my local wine shop, the best in Annapolis, says that his markup over distributor cost is 1.4 percent and he cannot sell to restaurants, only the walk-in trade. He visited SA in February and says that SA is bound by two or more importers to the states and that distributors here sell one to another based on their market needs. All the retailer can do is stay close to his 1.4% and hope that service and promotions bring customers in the door. Again on Mulderbosch, I recently bought a half dozen bottles of its "Faithful Hound" 2005 for $22.99/bottle and no store in the area could do better. Dana, what is its cost in Capetown at retail?
John Jorgenson
Seattle, —  February 3, 2009 1:38pm ET
Who was it that said the devil is in the details?I am glad to see more attention being given to regions and varieties that are less, shall we say, prestigious. My thanks go to all of the Spectator staff for a job well done, especially over the last decade. That is about when you started to let the world know that there were wonderful wines in places we were unfamiliar with; like Stellenbosch and Paarl, S.A. and Toro, Spain, and the recent focus on the table wines of Portugal. Bravo to all of you! The world will be a better place. I am also glad to hear of those in the industry that are doing their part to hold their prices within reason. Bravo to you as well!
James Molesworth
February 3, 2009 2:39pm ET
David: A retailer that works off of a %1.4 markup? Sorry, but that's impossible. No store would buy a case for $100 from a distributor, only to sell it for $101.40...at least, no store that would survive.
Dana Buys
South Africa —  February 4, 2009 6:06am ET
I checked with the winery and their 2008 Sauv Blanc retails for R90 per bottle from the cellardoor. It may be a bit more in shops. So that is $9.00 directly translated. If you work on a $70 per case FOB price (personal estimate) and you multiply by the 3.6 factor I would assume at that price range, you get to $21 retail on the shelf.

As James mentions, the prices have stayed quite contant, while the producers have faced significant cost pressure (as have wineries around the world) with high diesel prices, significantly higher costs of electricity, soaring bottle prices, dramatic increases in the price of fertilizer and anti-fungal sprays.

I also do not buy the 1.4% markup - one has to assume that most businesses would need to make at least a small profit (!!) and the most efficient of retailers, Walmart, runs at an expense to sales ratio of about 18%. So that means they need to make a greater than 18% margin in order to show a profit.

As for the Rand - it has fluctuated a great deal. In 2002 it peaked at R13 = $1, then in early 2006 is reached R6 = $1 and right now it is at R10 = $1. It makes it quite difficult to keep prices constant in $ terms. A lot of wineries took huge pain when they adjusted prices when the Rand was at its weakest, only to see it double in value over the next few years.
David Harper
Annapolis MD —  February 4, 2009 4:00pm ET
Dana, you and James are both right. 1.4% is not the markup -- this is just U.S. winespeak that translates to $40 over wholesale or 100% plus 40. In checking with another local merchant I've learned that containers from a single SA winery will bear a $1 initial markup per bottle, $2 if it's a broken lot from several wineries. Then the importer and distributor (here) will add 33% or so for profit, clearing, ground transport, tax and related costs before the retailer adds his 20-40% markup. My second friend says that SA wines for various reasons are not moving -- he cited the Mulderbosch 2005 Faithful Hound (last bottle) at $14.99 (vice the $22.99 I paid elsewhere) and said that they discount SA wines routinely to move inventory. I hope this clears things up to some degree as I was simply not versed in the new math of wine markups. In short, importer and wholesaler 33% each and 20-40% for the retail shop. This is not a Stellenbosch problem, but a U.S. bit of profit-taking.
Ken Forrester
Stellenbosch South Africa —  February 10, 2009 2:42pm ET
David, John, James and Dana, what a refreshing yet painfully truthful picture you paint of selling SA wine in the USA, and whilst state legislation as well as the three tier system may well be hurdles, we in South Africa truly have to do a little more and "take the wines to the market" all too few Americans are aware of the amazing value offered by many South African wines below the $20 mark and even below $10 which in the current economic climate must be really good news. Great ripe, fruity wines, with an element of restraint and old world charm at fair prices, we somehow just need to spread that word and have the market start looking out for these wines. Lots more shoe leather required......
Alan Seicshnaydre
March 4, 2009 4:42pm ET
James As a W.S. on-line member, I really enjoy your written comments and video. You deliver crisp well-informed analysis in a non-condescending style. That having been said, I was very surprised to see your comments about the 2000 Weinert Cab. Let me quickly point I do not have a ¿dog in the fight¿(I am not in the trade, no biz ties to Weinert etc, etc). What I do have is 20 + years of mostly weekly (group 1) and monthly (group 2) double blind tasting experience. We taste wines from around the world from typically $15 ¿ $100++ price points including 6-1st growth tastings since 2005. I do not say this to impress but rather to add context to my comments. As such I am not interested in gathering support for my point of view but rather understanding a different but respected opinion.My thoughts on the 2000 Weinert Cab as tasted 3 times in the last year¿ Remarkably bordelaise in tannic structure and well managed left bank like Bret.¿ Well-integrated French oak character. Back of bottle say 3 yrs in French oak casks which I assume not to be all new¿ Accessible fruit without back plate dryness which betrays the new world (not withstanding the Right bank in a ripe year)¿ Overall impression of this wine from 2/22/09 and 2/23/09 tastings as well as another tasting approx 6 mo ago is a very convincing and well executed expression of Bordeaux from South AmericaPs: Whereas Differences of opinion are common and certainly expected in a well-informed tasting setting; I'm at a loss here. But isn¿t it great that wine allows such diverse interpretationYour comments from W.S.BODEGA Y CAVAS DE WEINERTCabernet Sauvignon Mendoza 2000¿Generate shelf talker ¿Add this wine to my Personal Wine List ¿What's this? ¿Back to search resultsBarely hanging on, with tea, prune and earth flavors that turn muddled on the finish. Past its prime. 8,000 cases made. ¿JM Score: 76Release Price: $22Country: Argentina Region: MendozaIssue: Web Only - 2006
James Molesworth
March 4, 2009 5:13pm ET
Alan: That's what makes horse races, I guess. I'm glad you enjoy the wines, but in my opinion, Weinert is way behind in quality...they keep promising to send me wines to taste that show they're going in a new direction, but they never seem to follow up. C'est la vie...

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