Putting the fizz in accountancy

Hambledon Vineyard FD Joe Jeffers FCCA had been in the job only a few weeks before the biggest deal in his new employer’s history came up. Almost as soon as he took on the new role at the Hampshire-based sparkling wine producer, Jeffers found himself at the heart of an acquisition by London’s famous wine merchants Berry Bros & Rudd and the Symington Family Estates, a major name in port and wine, and owner of brands such as Graham’s and Cockburn’s.

And the deal landed in safe hands. ‘While I’ve been in FD and CFO roles for a number of years now,’ he says, ‘a significant part of my career has been in corporate finance, which was very helpful in this situation.’

Prestige brand

What appealed to the new owners was the strength of Hambledon’s reputation and product. ‘Hambledon has been building the brand over 20 years with the vision of making the best English sparkling wine possible,’ explains Jeffers. ‘All of our processes are the same as for producing champagne.

‘It’s the same chalk soil with a similar climate here as it was in Champagne 40 years ago. We’ve got the perfect land to grow traditional grape varieties – chardonnay, pinot noir and pinot meunier – and our reputation is amazing.’ Hambledon’s wines regularly come top of blind tastings against the best of its French rivals.

Hambledon wine is most definitely aimed at the higher end of the market and can be found in Majestic Wine, Waitrose and M&S, as well as in many hotels and restaurants. ‘Virgin Atlantic serves us too,’ says Jeffers. ‘A lot of time and craftsmanship goes into producing a bottle.’ The range includes the popular classic cuvée and classic cuvée rosé as well as the premiere cuvée family of products.

Expanding the experience

Long before Jeffers joined, a plan had been in place for a major investment in a new visitor centre. With wine tourism (or enotourism) being successful in the US, France and South Africa, Hambledon decided to create its own visitor experience. When it opens in spring 2024, the centre will offer tasting activities, a shop and a restaurant with spectacular views over the vineyards.

‘It’s a two-tiered building and the tasting rooms will look into the cellar, which is the size of a football pitch. It’s going to be amazing,’ says Jeffers.

However, the ambitious project has not been without its problems. ‘Post-Covid, the price of labour and materials has gone through the roof, so the budget has come under a lot of pressure,’ he says.

Finance to farming

The cyclical nature of winemaking also brings challenges. There is the harvest in October, where the grapes are picked, pressed and put into tanks, before being bottled the following July to be aged on their lees in the cellar.

‘There’s a myriad of things you have to think about,’ explains Jeffers. ‘We’re making something that is complex and requires inventory. It involves the appropriate amount of yeast and sugars; then we need to forward-purchase bottles, foil and corks to the appropriate timeframe. The timings within the wider process of wine-making are everything.’

For the finance function, it is all about cashflow forecasting and management, and the funding of cash, he says. ‘We are able to leverage the value of our wine stock using asset-based lending. We have wine in tanks, which is then worth more once it gets bottled, so we have these periodical uplifts in funding for our borrowing base.

‘Our classic cuvée will be on its lees in the cellar for a minimum of 22 months, but premier cuvée is 62 months. So, you are not going to revenue that for five years.’

As well as the patience needed in making top sparkling wine, there are other cyclical costs, such as hiring around 80 pickers annually (in addition to the 25 full-time staff, and part-time staff who work on tours and events).

This year saw a huge 45% increase in grape volumes, as there was an excellent harvest with better yields from the vineyards. Appropriate land has been rented locally, which means around 500,000 bottles will be filled this season.

Revenues grew 32% between FY21 and FY22, and Jeffers is anticipating growth of around 20% between FY22 and FY23.

Hands on

It has been said that a winemaker is first and foremost a farmer. Although this is not Jeffers’ background, he says his years in business (see CV panel) mean he’s able to learn from the industry experts around him. He also likes to immerse himself in the day-to-day activities.

‘I’m a working onsite kind of person. I seek to have close relationships with operational teams to gain an understanding of the work, listening to the problems people have and then solving them. I think that is the modern CFO for you, right in the middle of things.’

Throughout his career Jeffers has always had a mantra of ‘no surprises’ for management and staff. ‘I try to speak to people, because if I’m constantly communicating with everyone there shouldn’t be any big surprises. But this is farming and, unfortunately, one thing I can’t dictate is the weather.’