Going vigneron: Julien Seydoux’s journey from Paris to southern France, from financial investor to winemaker

I was speaking recently with the father of a child who plays on my youngest son’s basketball team. He told me about how his company, which supplies parts to Zodiac Marine, the French manufacturer of inflatable boats and above-ground swimming pools, might lose its supply contract with Zodiac. It seems that the Carlyle Group, the Washington, D.C.-based private equity investment firm, purchased Zodiac Marine in 2007. Carlyle is the largest of the leveraged buyout firms that specialize in purchasing equity in what they feel are underachieving companies. After acquiring a controlling or substantial minority position in the company, they try to maximize the investment through an Initial Public Offering (IPO), through a merger or acquisition with another company, or through Recapitalization, where dividends are paid to the investors through the company’s cash flow or through corporate debt.

This man told me that, as part of the Zodiac Marine reorganization, French factories were being replaced with ones in Tunisia, and that the company was also trying to reduce its supplier costs. He’s trying to diversify, he said, by finding other buyers for the parts that his company manufactures. A better plan, I thought to myself, than taking the boss hostage or even blowing up the plant—two extreme worker responses that seem to happen increasingly in France.

Underachieving vineyards
Well, you’re undoubtedly thinking, this reorganization is part of globalization, and what do the Carlyle Group and Zodiac Marine have to do with wine? I made this rather obtuse connection because I’ve been thinking about how this sort of globalization–with money searching for higher returns–is also affecting French vineyards. I’ve heard recently of a consortium of rugby players who purchased several Faugères vineyards from local winemakers who couldn’t make a go of their operations or who were retiring. These former scrummers pooled their money, hired a local winemaker and vineyard manager to take care of the vines at these properties, and they’re planning on recouping their investment with the wine sale proceeds. This is pretty much pure investment. Sure, they will probably get some wine from their property to impress their friends, but it’s not that far away from a California teacher’s retirement fund seeking a return on its investment with the investors at Carlyle.

I also know of another such wine investment group in southern France—this time in the Minervois—that is led by an Executive MBA graduate from the prestigious IMD business school in Lausanne, Switzerland. Each member of the group invested in a fund that was used to purchase what they felt was an under-valued vineyard with the potential to produce quality wine. Their objective: Turn around the property, and then sell it for a profit. Originally, the fund was ambitiously looking to do the same in Spain and Italy, but evidently the economic downturn has toned down their investment appetite.

If you’re still reading, I’ll make my point, as we’re approaching that magic 500-word mark (or around 50 or so tweets) where the attention span of many flags. While attending Vinisud in late February, I caught up with Julien Seydoux, the young man who late last year purchased Château des Estanilles, the Faugères estate of Michel Louison. I first wrote about Estanilles wine in May 2009 and then again in October to report the purchase by Seydoux of the vineyard.

The first time that I met Seydoux was on one of his first visits to Lenthéric, the small Faugères village where Château des Estanilles is located. I happened to be there as I was interviewing some wine producers in nearby St Chinian, and I stopped by to say hello to a few people. He had come walking down the only real street in Lenthéric, and he stopped to introduce himself to me and several others who were standing around on an early Sunday morning. At this point I hadn’t read the news reports about his having purchased the Château des Estanilles, so I didn’t have a clue about whom he might be. But I knew from his dress and mannerisms that he wasn’t from anywhere nearby. First of all, he was dressed in clean, well-cut clothes, not the unofficial jean and khaki shirt uniform that most of us were wearing. His hair was cut as fashionably as a GQ model, and he had the clean, well-manicured nails of someone who spent more time in front of a computer than driving a tractor. For all we knew, he might have just been sucked up from a Parisian café by some mysterious vortex and then set down in this remote village in the Haut-Languedoc.

Nothing akin to an X-file experience had happened certainly, but for Seydoux at least, the change between the world that he left behind and the one that he has embraced must certainly be startling. And today, to see him with his permanent, three-day-old beard, his new (how should I say it?) more functional wardrobe, and his less-manicured look, he certainly looks less like a financial investor and more like a vigneron.

I asked, “Why Faugères?” He told me that he had spent two years looking for a vineyard in the Languedoc-Roussillon, almost buying something in the Pic St Loup appellation (“But it felt too crowded there”) before settling on Château des Estanilles.

“I enjoy sunny, fruity wine with good minerality,” he said. “The Languedoc-Roussillon is more fruity than Bordeaux, and spicier than Burgundy.”

He explained that he was looking for a domain with unique soil, with a good cellar, old vines, and a reputation for producing good wine. The Château des Estanilles, for him, fit all of those criteria. Six months into this endeavor, Seydoux says that it’s “a bigger challenge than I expected.”

To return to my earlier comments about similarities between private equity investment firms and different forms of investment in French winemaking, Seydoux’s approach to radically changing the Château des Estanilles is thoroughly professional and MBA case-study efficient.

He has hired an oenologist/technical director, along with an experienced manager to handle the vineyard operations. He is particularly excited about bringing on board the Narbonne-based consultant oenologist Claude Gros, whose clients are making some of the best wine in the Languedoc-Roussillon, as well as in several vineyards in Bordeaux and Catalonia.

“I really enjoy the wine from Domaine Borie la Vitarèle in St Chinian,” Seydoux told me. “Then, after discussing with Claude Gros about assisting us in improving the Estanilles wine, I discovered that he was responsible for the Borie la Vitarèle wine. It’s amazing, really…,” he added.

Seydoux said that he wants to increase the profile of the Château des Estanilles (he has two public relations professionals handling his domestic and international communications), while keeping the emphasis on traditional, terroir-driven wines. He outlined several areas of improvement, such as working on the maturity of the grapes, using a cold chamber for the harvested grapes to capture the fruit flavor and to prevent oxidation, vinifying the varieties separately to better control their development before blending them into different wines, and using larger, 600L demi-muid barrels to lessen the oak impact on the wine and to make the wine more accessible when young.

In addition to changing some of the cellar practices, the general image of the Château des Estanilles is also in for a maker-over. In another Midi Libre newspaper article, Seydoux said that he planned on introducing some more modern-sounding names to replace the domain’s “Tradition” and “Prestige” labels.

It’s evident that Seydoux has the commercial and financial acumen to promote and manage Château des Estanilles. Just like investors need to be patient, we Estanilles wine enthusiasts need to give him time and hope for positive returns.

Tagged as: Faugères, Languedoc