This year is a significant one for Delegat, and for the family behind this globally successful wine company. “We can easily forget that not so long ago things were different,” says Executive Director Jim Delegat, 75 years after his parents established a small vineyard and brand in West Auckland. “The idea that one day New Zealand would be successful in exporting wine to the discerning markets of the world would have been dismissed as fanciful.”
At 75 years old, the company’s experience is storied and its track record solid, he adds, paying special tribute to his parents for early decisions made and foundations laid. “We have been fortunate to be part of an incredible New Zealand wine industry growth story.”
“The idea that one day New Zealand would be successful in exporting wine to the discerning markets of the world would have been dismissed as fanciful.”
In 1947, Croatian immigrants Nikola and Vidosava Delegat planted vines on a 4-hectare block, while establishing a modest wine brand. This year their two youngest children, Jim and Rosemari Delegat, have been named Fellows of New Zealand Winegrowers, having built one of the most successful wine businesses in the country – now with 4,000ha of company owned vineyards – while helping raise the fortunes of New Zealand’s industry at large. “I am happiest when I am in the vineyard or the winery or talking to people about wine,” says Jim. “It is an environment that Rose and I feel completely satisfied to work in, so we made quite a powerful team.”
Nikola came to New Zealand from former Yugoslavia in 1938, leaving the uncertainty of Europe behind him. The same year Vidosava arrived with her parents and joined the vibrant West Auckland Croatian community, where the couple inevitably met. They married in 1941 and moved to the Waikato to work on a dairy farm, and by 1947 had saved enough money to buy land for a vineyard and winery in Henderson.
“Our family has been making wine for centuries in Yugoslavia and it was something he felt comfortable as a young man to turn his hand to, as well as general cropping,” says Jim of his father. But wine was not “a beverage of choice” in New Zealand back then, “and nor was liquor licencing prevalent”, he says. “So, in order to establish themselves in the market, they established the Delegat wine label brand and would sell from the cellar door, and do mail order to the Waikato, back to the people they knew when they were farming there for seven years.” It was, he adds, “the formative stages of direct-to-consumer marketing”.
“Oyster Bay, we felt, resonated as clean green New Zealand and the packaging was extremely modern and easily identifiable. So it established a strong presence in the emerging export markets.”
Rose’s memories of growing up in Henderson are of “happy families”, with abundant socialising and wide-open spaces. “It was an awful lot of fun in a rural community,” she says. “As teenagers we helped out in the vineyard on holidays and weekends, while my two elder sisters helped with bottling and labelling the wines”. That was typical of the community, says Rose. “We were really doing what everyone in West Auckland was doing.”
Then Nikola passed away in 1973, with Vidosava widowed at the age of 56. The eldest daughters had married and started their own families and businesses, but Jim, aged 24, and Rose, 22, joined forces to drive Delegat forward, recognising a growing appetite for wine in New Zealand, along with the emergence of table wines.
By 1978 the siblings had established vineyards in Hawke’s Bay, which was a major investment, “and a signal of our intention to focus on making premium varietal wines”, says Jim. Chardonnay drove demand in the 1980s, so the family imported the “legendary” Clone 6 from UC Davis in California, which became a major Chardonnay clone for the business. That was followed by importing French barrique barrels and fermenting Chardonnay in oak from 1983 onwards. The Hawke’s Bay vineyards, Clone 6 import, and barrel fermentation “all paid dividends” as the company started to stack up trophies and medals, says Jim. “We were planning for success, and we felt success at that time lay in recognising quality.”
In 1986 they purchased Delegat’s first Gimblett Road property in Hawke’s Bay, as one of the earlier players on the gravels in a move “that further underpinned red wine making for Delegat”, says Jim. Their next
big stride was into Marlborough, with the first vintage of Oyster Bay Marlborough Sauvignon Blanc. It proved a strong choice, when its first vintage – 1990 – won gold and the coveted Marquis de Goulaine Trophy for Best Sauvignon Blanc at the International Wine and Spirits Competition in London. Oyster Bay Chardonnay and Sauvignon continued to reap rewards, “and we went on to be recognised as a great example of New Zealand wine”, says Jim.
The Oyster Bay brand was designed to represent the best New Zealand could do with wine and help the industry gain a foothold in the global wine market, he adds. “Oyster Bay, we felt, resonated as clean green New Zealand and the packaging was extremely modern and easily identifiable. So it established a strong presence in the emerging export markets.”
Meanwhile Rose was proving a force in export marketing, having been a member of the Wine Institute’s export subcommittee from 1987-1990. She also played a pivotal role in the development of the New Zealand Wine Guild, which led export activity in New Zealand’s largest market – the United Kingdom – during the 1990s. The 1980s and 1990s were a key time in the development of the modern New Zealand export wine industry, and Rose “really played a large role”, says Jim. “The wonderful character in my sister Rose is she creates enduring relationships, whether personal or business, and that proved to be a great asset to our business. She is very well respected and well- liked by a vast audience of people.”
“I find satisfaction in developing business strategy, building teams, and executing on those plans. I think that is probably the foundation of our success.”
Jim was also immersed in the wine business beyond Delegat, particularly as a member of the Wine Institute Board from 1985 to 1996. He served as an alternate and full director during a critical time period, when the industry was pivoting from a domestic to international focus. He also sat on the Wine Institute Board from 2005 to 2016, and on the NZW board from 2007 to 2016.
Having left school aged 16, Jim brought with him little formal education, but plenty of determination and willingness to learn. “I have made wine all my life, but I have never studied winemaking.” Meanwhile, he has become a “natural business builder”, he says. “I find satisfaction in developing business strategy, building teams, and executing on those plans. I think that is probably the foundation of our success.” Jim has sought knowledge from experts in areas such as strategy, identifying competitive advantage, and pinpointing key success factors. “So I have had a lot of tuition over the 55 years I have been in the wine business.”
Some lessons are learned the hard way, and in 1986, when New Zealand’s wine industry was struck by oversupply and a downturn, Delegat was poised in the jaws of receivership. “The wine industry hadn’t yet truly benefited from the demand from global wine markets,” says Jim. He recalls issues of oversupply, rationalisation and “significant financial hardships” that caused some of New Zealand wine’s biggest brands to fall away.
The siblings fought back and found means to “rescue” the company, sacrificing 51% of their stake in the effort. But the show was far from over for Delegat and the Delegats – by 1989 they had retrieved it all, “and took it back to complete family ownership”.
A year later they established the Oyster Bay brand in a move to go global, says Jim. A decade of awards and accolades followed, nationally and internationally, “and that was really the foundation for continuing to build on our business”, he says.
In 2006 – in the wake of Jim winning the 2004 Ernst & Young Master Entrepreneur of the Year – they were ready to take the next big step. The company, by then a category 3 wine producer, was moved from private ownership to a public listing on the New Zealand Stock Exchange, while Rose and Jim retained a 66% majority. The capital raising enabled them to invest in a growth strategy to launch Delegat into the hearts, minds (and shopping trolleys) of early New Zealand wine enthusiasts around the world, says Jim.
Now, 75 years from its foundations, 36 years after the wine glut threatened them, and 16 years since they listed the company, the Oyster Bay brand is New Zealand’s top selling super premium wine brand globally, with more than 3.7 million cases sold each year, equating to 220 million glasses of wine, says Jim. “That’s the modern-day story of Delegat.”
And he and Rose still consider it a growth business, with significant global aspirations. The world, it seems, is still their oyster.
This was first published in New Zealand Winegrower magazine issue 136 and is republished with permission.