Established in 1967, Vignobles Foncalieu claims to be the largest winegrower cooperative in the South of France.

Based in the Languedoc region, the group represents roughly 619 vintners operating across 5,200 hectares of vineyards and has 119 employees.

Known for brands including Le Versant, Château Haut Gléon, and Atelier Prestige, the red, white and rosé wines producer saw sales reach €59.4m ($64m) in 2023.

Earlier this year, the group promoted its finance chief Emmanuelle Rivière to managing director. She will lead executive decision-making alongside chairman Jean-Marie Cassignon.

With close to 70% of group sales coming from exports, building a presence in global markets is a key consideration for Foncalieu.

Just Drinks sat down with the company’s export director Nathalie Estribeau to find out more about the cooperative’s global growth plans and how it is adapting to the waning consumption of red wine.

Fiona Holland (FH): How does the export side of the business operate?

Nathalie Estribeau (NE): We export in about 40 countries. We have six export managers and we also have an assistant based in China…It's a bit more than 67% of our bottle business that is exported. For the [time being] this year, it’s a small [income] growth of 0.7%. It's not fantastic, but in the current climate we are very pleased to see this number.

The number one [country] is still the UK. Around 15-20 years ago, it was by far the number one, now… number two is Sweden, and it's very close to the UK market. The UK market has lost a little bit of space… and number three is Belgium.

FH: Why do you think growth has slowed in the UK?

NE: A long time ago, we used to work with the supermarkets. It's very limited what we do in the off-trade right now. We work with a lot of independents. It's really mainly the on-trade, and we work with many people, we have many customers over there. That’s why it's still working.

FH: Was Brexit to blame, or competition within off-premise?

NE: Absolutely, the competition. We produce mainly Pays d’Oc varietal wines and there was a time when the origin of varietal wines was not so important, so we did lose some market share but it was ten years ago.

FH: Does all your bottling take place in France?

NE: When we sell bottled wine, everything is bottled at source, at our facility near Carcassonne. We do sell a bit of bulk wine as well, but these wines are [private label]… we don't control the brands at all.

FH: Is that a small percentage of the business?

NE: Yes, in terms of value it's a small percentage.

FH: Which of your main markets offer the greatest growth opportunities in the next 12 months?

NE: Wine consumption habits are changing rather quickly, especially in the old-world [winemaking] countries… for example France. There is also inflation, but inflation is all over the planet, so it makes everything quite challenging.

But we see some growth opportunities for the next year or so in different places. For example, the Americas. We've been growing in Canada, in the US market, and we see that as still potential growth. We don't know anything yet about the possible tariff that may take place. But even with that, we think if everybody has the tariff, then we should be able to still grow our sales over there.

We’re not very big in Brazil, and we think there is an opportunity there, and this is due also to our offer of wines right now. We've got mainly, the Pays d’Oc… At Foncalieu we produce a bit more than 50 different grape varieties, so the diversity makes our portfolio quite attractive.

FH: Why do you see opportunity in the Americas for Vignobles Foncalieu?

NE: I think our diversity of single varieties of wine is really of interest. Also, Foncalieu has always been about innovation from the vineyard. We've got 5,000 hectares of vines, so we've been doing research and development straight on the vineyard.

For example, 15 years ago we planted Albarino, and our Sillage Albarino is now really successful. We did plant also Picpoule Noir where we make a rosé from that, that's really very successful. We were the first one to plant some French resistant grape varieties [in] 2017.

We make our Souvignier Gris under L’Atelier N. 10 label, and this wine really attracts new consumers from the USA. They are really interested in that in Canada as well, and I have to say, in Japan [too]. There is really a growing interest in these different grape varieties that are more adapted to climate change.

FH: How are you preparing for the potential US tariffs?

NE: How can you prepare for that? The last time, the deal was if we didn't want [high] tariffs, we had to increase the alcohol volume of the wines. For me, it's completely nonsense. We cannot really prepare for that. We are making the best quality wines we can at the natural abv. We may be slowing down on this market if the tariffs are coming up, but we cannot really prepare. What we are really going to focus on, and we're recruiting someone new, is to try and find new consumers in this market.

FH: Is Foncalieu looking to enter any new markets in the next year?

NE: Really, the main focus in terms of new markets will be Brazil, and the rest is maybe more strengthening our relationship with the customers we already have in place. This is in Europe, mainly, because consumption is not growing.

There is inflation everywhere, but by really strengthening with our customers, our agents already in place, we've been successful in launching new products over the last couple of years, and this is an area where we can still work and develop. We've got some plans to develop new wines, or develop the range of wines that is already existing. For example, in Sweden, we've got a plan in place already.

FH: How are you trying to boost performance in the UK?

NE: For next year, with the tax challenge [on] the high percent abv we’re trying to adapt with some lower abv wines, but really just at the entry level. All our current ranges, like Le Versant, we’re not going to reduce the abv by 2% because it would change your profile of the wine, so we cannot do that… we've developed 10.5% to 11% abv wines, just for [private label].

FH: Does Foncalieu plan to delve further into lower abv wines?

NB: We’ve been making 10.5% and 11% abv. We are looking at possibly doing some low abv by dealcoholisation, but we haven't gone into the process of starting that yet. We see a potential interest, absolutely. First because of the tax bracket in different countries, not only the UK. Different countries have got lower tax, depending on the abv and because of the consumption and social responsibility of some people now. We will be looking at that, but we haven't yet.

FH: Would that include non-alcoholic as well?

NE: We decided that no-alcohol wine is not really part of our winemaking process. It's an industrial process that we wouldn't be able to control ourselves. For the time being, we've decided not to go ahead with that. A lot of players are doing them… it's not part of our DNA right now.

FH: What are the main growth targets for the year ahead? Is there anything specific you're looking to achieve in other international markets?

NE: Japan is really good market for us, where we can see some growth opportunities thanks to our organic products. Japan is really interested in organic wines, and at Foncalieu, we've got almost 10% of our production, which is organic. We've launched a brand called Sur Tes Pas, a 100% organic [wine] last year, and the first customers who've listed these wines were some Japanese customers. They are really key to developing some sales with the organic wines.

FH: You’re in China as well, is that a big market for you?

NE: China is not big. We've lost a lot of market share there, like many others. We see a different opportunity in China right now.

73% of the wines that we export are white and rosé [versus 67% in 2023]. This makes a really interesting mix for all markets because red wine consumption is decreasing almost everywhere.

In China, we've had some really good interest [in] white wines. For us, [this] is completely new, because we used to sell 100% of red wines, and since last year, we've had a few orders of white wines. The market is really changing and looking like they may be liking white wines in the future.

Also, more expensive wines. We've got Chateau Haut-Gleon, now sold in China. It's our most premium range at Foncalieu, and we sell quite a bit in China… We used to sell AOP wines, AOP red wines, and now they are more interested in more premium wines.

FH: What are the most significant challenges facing the wine sector at the minute?

NE: The biggest challenge all over the planet… the first one is inflation.

Then the change of consumption habits, right now red wines are really decreasing quickly… But at Foncalieu, because we were really big in making white wines in the past, we've been able to adapt because we have the infrastructure in the wineries, we’ve been able to make rosé quite easily.

This year, I think we've only got 25% of red wines in our mix, so we've been able to adapt. But this is one of the biggest challenges, I think for the French market, it's red wines.

FH: You mentioned in Norway, customers don’t want to take the entry level price. Can you give some more colour on that?

NE: China used to buy cheap wines, not Norway. They were interested in really good quality wines. Now because they have tax on abv as well, and because of inflation, the cost of wine for consumers is really high. In a restaurant, for example, it's more than £100 a bottle, so they are looking at what have you got [that’s] less expensive. It’s the first time they have asked us for that. I'm not saying we can do it, but they asked the question.

FH: What other key developments are you expecting to see in wine in the next year?

NE: People are more interested in white and still the rosé market as well. We've been always quite big in supplying rosé and French rosé is still key in most of the markets. That's what I see.

Rosé is still linked to summer, but we’ve seen that consumption of rosé is not yet all year round, but it's changing, and during autumn and spring there is more consumption of rosé.

FH: Has climate change affected Foncalieu at all? Is it currently having an impact?

NE: It does have a big impact. It's really warm, so it can be hard to keep some acidity in the vineyard. Some areas are really struggling with water, that’s why we're [trying] these new resistant varieties, and some, we think, are quite well adapted to the south of France. I was mentioning l’Atelier N. 10, Souvignier Gris, it's from Germany. I don't remember the year, but it's not new. We think it's really well adapted for the South of France because it has got a really nice natural acidity.

FH: Does the business plan to invest more in grape resistant varieties in the future?

NE: Absolutely, we need to adapt. Some varieties that we've got now are less adapted to this climate change, it’s getting a bit too warm for them. For example, we've had less Merlot in our vineyard this year. We think Merlot is struggling a little bit with this warm weather that. It’s really a focus for us to look at these different resistant grape varieties, but we already have 95 hectares planted with these resistance varieties.