Entrepreneur watch: How to make it in the wine industry
Malmsey Rangaka is co-founder and CEO of M’hudi Wines, a family wine farm located in Stellenbosch, South Africa. The M’hudi wine brands are sold not only in South Africa but also the US, UK, Germany, Switzerland, Sweden and Nigeria. Rangaka tells How we made it in Africa’s Dinfin Mulupi how she ventured into wine making and the ups and downs of running a family business.
How did you get into wine making given that you trained as a clinical psychologist?
For a long time the abiding interest of my husband and I had been to get into primary production. He thought of cattle and I thought of milch goats. However, before 1994 it was not possible for black people to acquire farms as the Native Land Act of 1913 prohibited it. After freedom it was possible but it was only in 2003 that we finally decided to take the plunge. We walked 22 farms that were on sale and ended up with this one in the Western Cape winelands. Our fate was sealed, it was a vineyard and wine it had to be.
What challenges did you face investing in a sector you had no prior experience in?
The capital outlay was not only prohibitive initially but continues to be a challenge. It is the lack of funds that was the main problem. But we gave the bank our home in Mahikeng and were able to get the bond over the farm. We had to learn to drink wine because we felt we would not be able to tell good wine from plonk if we did not. This called for single mindedness as wine is not the easiest of products to get into. But when that had been solved we then had to understand the value chain and here again were dragons. The absence of black-owned productive capacity meant we had to depend on others and to learn that far from being a welcome development the presence of black people in the industry was received with sometimes naked hostility. Many black-owned companies failed to make it past the first year.
How have you coped with the competition in the wine industry?
Competition is normal and makes for good quality products at good prices to consumers. We have to ensure that we get our positioning right – be an afropolitan brand with a striking label and irresistible story. We continue to recreate ourselves to remain competitive in keeping with our motto: ’M'hudi – the journey begins’.
How did you manage to get your wine into international markets?
Wine is just about the only product that depends on personal relationships to sell. After all, at a certain level it is merely fermented grape juice. So, consumers respond to you personally and that is why having a personal story linked to the wine is a persuasive selling proposition. The wine is good, the prices are in keeping with the quality, the packaging is classy and the story compelling.
You run the business with your husband and children. What advice can you give to other family run businesses? Is it challenging or does it make things easier?
It is onerous to be in a family business, particular as CEO like me. I have to herd a team – I use that word deliberately – that tends to see you in a dual capacity. You have to be careful to ensure that the discipline of business does not get misinterpreted to be personal ‘maternal’ censure. With your husband involved there is the constant line you have to tread between asserting the claims of your office and maintaining the balance that allows the love affair to continue.
Succession planning is another issue. If you go by primogeniture and the eldest is incapable or busy elsewhere you then have to break traditional ranks to build up a younger sibling. If it happens that the younger is a daughter all sorts of other issues come to bedevil the matter.
Where do you see M’hudi Wines in five years?
Owning bigger productive capacity with a stronger market presence, especially in Africa and the BRICS countries.
Does being a woman make things harder in business?
Infinitely. Whenever I attend a meeting with one of the male members of my team, even my son, other business people, including women, tend to talk to him. There is a general understanding that being a woman you cannot have done it.
Any advice for women entrepreneurs?
We are actually better suited for business than men. Our natural way of working is inclusive, orderly and emotional. All this clenched teeth aggression of the men simply makes them less effective. So it is incumbent on us to get into business. We do it better. But be prepared for the brickbats though.
Your future plans for M’hudi Wines?
I would like to see younger members of the family running the business.