Wine Kitz Atlantic

In last month’s blog I provided a copy of the Andrew Peller Limited news release announcing the purchase of World Vintners Inc. Since then, APL management has spent a considerable amount of time meeting with the various regional Wine Kitz groups from around the country.

Speaking on behalf of the Atlantic group, our meet & greet dinner on Saturday night at a local downtown Halifax restaurant was a great ice-breaker. It provided everyone who attended with an opportunity to meet our new management team on an informal basis. Our Sunday meeting was very informative for all parties involved. Once the meeting was complete and most questions had been discussed and answered, all 8 Atlantic franchisees came away with a very positive outlook for the future prosperity of their business. With plans for expanded product selection, innovative product mix and advanced wine making procedures, we are confident that Wine Kitz will remain the leader in the consumer-made wine industry.

Without going into too much detail, it was mentioned at the meeting that the main attraction of the World Vintners purchase was the 75 Wine Kitz franchise locations. The jewel of the 75 locations is the 8 Atlantic stores. When compared to national sales trends, our continued growth over the past several years seems to be leading the pack. When asked by APL management to share our “down east” secret to success, no silver bullet answers were provided but our business–like approach and nose-to-the-grindstone work ethic, combined with above-average customer service and quality products, seem to surface as the most determining factors. (Mr. Harper’s “culture of defeat” comment doesn’t apply with this group.)

The Wine Kitz Atlantic region is no longer the industry’s best kept secret. In my March blog, I mentioned there was never a better time to be involved in the consumer-made wine industry. Having now met our new ownership group, I reiterate my earlier comment and invite anyone looking for a career change to research the business opportunities offered by the Wine Kitz Franchise network. Furthermore, I welcome any existing stores wishing to grow their business to the next level to consider the Wine Kitz Franchise network as a solid business alternative.

In closing, if there was a downside to the weekend meetings, it was saying our goodbyes to the outgoing Wine Kitz management team and employees. On behalf of all Atlantic franchisees and myself, I wish to thank each and every one of them for their efforts in making our jobs easier and for helping to make our businesses prosperous and successful on all levels. At the risk of a bit of embarrassment, there were a few tears shed at the close of our last meeting together.

As one door closes, another one opens.

Blair

September 2008

As regional director for the Atlantic region and as a franchisee (store owner), I consider the announcement below a step forward in continuing to provide our loyal customers with the best possible products & services currently available in the consumer-made wine industry.

This change of ownership will have very little impact on our customers. But it’s only fair to make our many winemakers aware of who sources and formulates the products and recipes they have all become accustomed to confidently purchasing and enjoying with friends and family on a regular basis.

Kindly read on.

Blair

“ANDREW PELLER LIMITED STRENGTHENS LEADING PRESENCE IN CONSUMER-MADE WINE BUSINESS

This news release contains forward-looking information that is based upon assumptions and is subject to risks and uncertainties as indicated in the cautionary note contained elsewhere in this news release.

GRIMSBY, Ontario – July 2, 2008 – Andrew Peller Limited (the “Company”) announced today that it had acquired 100% of the common shares of World Vintners Inc. (“WVI”), a producer and seller of high quality consumer-made wine kits. WVI’s sales for its most recently-completed financial year ended July 31, 2007 were approximately $12.0 million. The purchase price was approximately $9.0 million, with the acquisition closing on June 30, 2008.

The acquisition brings to the Company a dedicated network of 75 franchised wine-on-premise and retail outlets under the Wine Kitz brand name. The Company remains committed to WVI’s franchisees and will invest in the network to enhance its marketing, service, and support. Franchisees will benefit from the Company’s market leadership, financial strength and reputation for quality and service. WVI also produces the popular Heron Bay brand sold through independent wine-on-premise and retail outlets across Canada.

“This acquisition significantly strengthens our consumer-made wine business, and enhances our presence in a number of markets,” commented John Peller, President and CEO.

“The addition of World Vintners complements our Vineco and Winexpert businesses and strengthens our position as Canada’s largest producer and supplier of consumer-made wines. Looking ahead, we expect this acquisition will generate enhanced business opportunities as well as economies of scale and synergies to increase our profitability,” added Rob Van Wely, President of the Company’s consumer-made wine business.

Andrew Peller Limited is a leading producer and marketer of quality wines in Canada. With wineries in British Columbia, Ontario and Nova Scotia, the Company markets wines produced from grapes grown in Ontario’s Niagara Peninsula, British Columbia’s Okanagan and Similkameen Valleys and vineyards around the world. The Company’s award-winning premium and ultra-premium brands include Peller Estates, Trius, Hillebrand, Thirty Bench, Croc Crossing, XOXO, Sandhill, Copper Moon, Calona Vineyards Artist Series and Red Rooster VQA wines. Complementing these premium brands are a number of popular priced products including Hochtaler, Domaine D’Or, Schloss Laderheim, Royal and Sommet. The Company also markets craft beer under the Granville Island brand. In addition, the Company owns and operates Vineyards Estate Wines and WineCountry Vintners, independent wine retailers in Ontario with more than 100 well-positioned retail locations. Andrew Peller Limited common shares trade on the Toronto Stock Exchange (symbols ADW.A and ADW.B).

With a focus on serving the needs of all wine consumers, the Company produces and markets consumer wine making products through Winexpert, Vineco International Products and Wine Kitz. Its broad range of high-quality brands includes Selection, Vintner’s Reserve, World Vineyard, KenRidge, California Connoisseur, Island Mist, Niagara Mist and Heron Bay.

FORWARD-LOOKING INFORMATION

Certain statements in this news release may contain “forward-looking statements” within the meaning of applicable securities laws, including the “safe harbour” provisions of the Securities Act (Ontario) with respect to Andrew Peller Limited (“APL” or the “Company”) and its subsidiaries. Such statements include, but are not limited to, statements about the growth of the business in light of the Company’s acquisitions; its launch of new premium wines; sales trends in foreign markets; trends in capital expenditures and sales and marketing expenses of the Company; its investments in vineyards; its supply of domestically grown grapes; international grape surplus and price discounting; consumer demand; and current economic conditions. These statements are subject to certain risks, assumptions and uncertainties that could cause actual results to differ materially from those included in the forward-looking statements. The words “believe”, “plan”, “intend”, “estimate”, “expect” or “anticipate” and similar expressions, as well as future or conditional verbs such as “will”, “should”, “would” and “could” and similar verbs often identify forward-looking statements. We have based these forward-looking statements on our current views with respect to future events and financial performance. With respect to forward-looking statements contained in this release, APL has made assumptions and applied certain factors regarding, among other things: future grape, glass bottle and wine prices; the Company’s ability to obtain grapes, imported wine, glass and its ability to obtain other raw materials; fluctuations in the U.S./Canadian dollar exchange rates; its ability to market products successfully to its anticipated customers; the trade balance within the domestic Canadian wine market; market trends; reliance on key personnel; protection of the Company’s intellectual property rights; the economic environment; the regulatory requirements regarding producing, marketing, advertising and labelling its products; the regulation of liquor distribution and retailing in Ontario; and the impact of increasing competition.

These forward-looking statements are also subject to the risks and uncertainties discussed in this release and other risks detailed from time to time in the publicly filed disclosure documents of APL which are available at www.sedar.com. Forward-looking statements are not guarantees of future performance and involve risks, uncertainties and assumptions which could cause actual results to differ materially from those conclusions, forecasts or projections anticipated in these forward-looking statements. Because of these risks, uncertainties and assumptions, you should not place undue reliance on these forward-looking statements. The Company’s forward-looking statements are made only as of the date of this release, and except as required by applicable law, APL undertakes no obligation to update or revise these forward-looking statements to reflect new information, future events or circumstances or otherwise, or to explain material differences between actual events after the date of this release and such forward-looking statements.

For more information, please contact: Mr. Peter Patchet, CFO and EVP Human Resources
(905) 643-4131 Ext. 2210 – E-mail: peter.patchet@andrewpeller.com”

August 2008

Due to holidays and time away, we’ll skip the news for this month.

Let’s all enjoy the beautiful summer, and we’ll see you in September!

July 2008

Fresh Juice

A long running misconception amongst winemakers is that all products sold in a large white plastic pail are fresh juice products. Truth be known, most products in plastic pails are not fresh juice. Many of these products are reconstituted. Water has been added to a concentrate on your behalf.

The first indicator that the product in the white pail may not juice is price. If the price seems too good to be true, then chances are the product being sold is not fresh juice. Quality fresh juice generally sells in excess of $100 per 23L pail.

Additionally, don’t be fooled by those who are attempting to sell a frozen product under the guise of fresh juice. If it’s frozen it’s obviously not fresh juice.

One little known fact is that if juice has been altered or tweaked in any way by adding sulphites, adjusting acid levels etc., it’s not longer considered fresh juice. It’s now been transformed into and considered a wine “must”.

I’m sometimes asked about the availability of fresh juice. In the Atlantic region, where I conduct business, we are a long distance from a source of quality fresh juice. Fresh juice products are heavy, and also require refrigeration while in transport, which vastly increases overall costs to the end user.

Fresh juice is generally only available from September through January when wineries and vineyards are pressing and processing their grape harvest.

Local wineries and vineyards are often a good source for fresh juice. A word of caution: Quality will vary from winery to winery.

Over the years I’ve worked with most liquid products available in the winemaking industry. I’ve come to the conclusion that wines made from premium high-end kits make a finished product of equal or superior quality to fresh juice. All without the hassle of sourcing, refrigeration, finger-crossing………………..

~ Blair Sampson

June 2008

To date I have only written three blogs and some are already wondering why I don’t mention beer making. When I first started working in this industry in 1992 in Dartmouth, Nova Scotia, I named my first store Sudz Beer & Cheer Shoppe. At the time the name was a great fit. My sales were approximately 70% beer products, 30% wine products. Oh, how times have changed. It’s now mostly all about wine. You will note this wine trend is also very evident in our provincial liquor stores.

That being said, beer making is enjoying a resurgence. Beer kit sales are once again on the rise. There’s good reason for this: better beer making products…improved finished products.

For many, many years typical beer makers purchased a standard can of beer malt, a bag of sugar and went home to boil & brew. Many beer kits no longer require a boiling process, making for an easier and quicker beer making process. Many beer makers have moved away from adding corn or cane sugar to their beer batch. Using products such as powdered or liquid malts as a substitute for sugar enhances the quality and taste of most finished beer.

The largest factor in the resurgence of beer making is the introduction of “big box” beer kits. The two most popular brands are Festa Brew and Brew House. Festa Brew is a 23L all-grain beer kit. No water or sugar needed. Brew House is a 15L kit. Add only 8L water. Both of these kits are of the highest quality available on the market and each kit makes approximately 60-66 bottles. Both brands offer numerous styles.

One other new beer product recently introduced into the industry is called The Big & Easy Bottle Brew. The Big and Easy Bottle Brew is a totally new and different home brewing kit. It’s a revolutionary, easy way to make your own premium beer at home. It consists of pasteurized, unfermented beer, packaged in 2 litre bottles and equipped with a unique pressure cap. All you have to do is add the innovative yeast capsule to each bottle to start the fermentation. Two weeks later, once it has finished fermenting and has cleared, refrigerate overnight (12 hrs) and voila! You now have the equivalent of a 6-pack for approximately $1 per bottle!

Try a batch of any of the above beer kits and fool your friends. They will never know its home brew unless you tell them (and you will!). Unfortunately, they may not go home until all the beer is gone.

Happy brewing,

Blair

May 2008

Q: Do 15L-18L wine kits make a better finished product?

The short answer is a resounding yes……..but not in all cases.

A large kit format does not automatically mean a superior product. Determining factors are the quality of raw material contained in these kits and of equal importance, the manufacturer’s processing standards.

Quality indicators to look for include:

• Price: If the price/deal seems too good to be true then it probably reflects the quality (or lack thereof) of the content.
• Expiry Date: Reputable manufactures pride themselves on fresh product and always provide a consumer-legible expiry date. This date is often found on the box top.
• Ingredient Listing: Contents are usually listed in descending order. Grape juice and/or grape concentrate should always be listed at the top. Just as important, invert sugar should be listed at the very bottom of the list.

An ever growing percentage of winemakers are moving up from mid-range kits to these higher-end kits. These winemakers are discovering the merits and rewards of paying a few cents more per bottle for a superior product. When cellared and aged properly the end result is a smooth, bold, full-bodied wine with immense varietal character, flavour and aroma, comparable to a $20-$25 bottle of commercially purchased wine.

This being said, some winemakers avoid these larger kits due to their weight and bulk. The weight of these kits makes them a bit more difficult to handle and transfer into a primary pail. For those winemakers who feel challenged by the weight of these kits but do not want to give up the quality, there is an alternate option. The kit is called Elite Vintners.

ELITE VINTNERS

Elite Vintners offers an exciting new breakthrough for serious winemakers. Elite Vintners uses only 100% winery-grade varietal concentrate. There are no sugars, flavouring or aroma enhancers added. Elite Vintners’ advanced and innovative manufacturing technology has allowed for the design of an environmentally friendly wine kit series. This kit series is comparable to or exceeds the quality of any high-end wine kit currently available in the consumer-made wine industry.

Environmentally Friendly

This compact 6.7L of high-quality concentrate offers the following environmentally friendly features:

• Small 6.7L compact kit allows for more space-efficient shipping of product to retail stores, lowering the carbon footprint often created when shipping heavier kits,
• Bare-bones packaging reduces the excess use of printing products such as colour inks, etc.,
• Smaller packaging reduces the amount of waste product such as cardboard, heavy plastic, etc. sent to land fill stations
• Small package concept makes these kits user–friendly, avoiding the need to lift heavy kits and preventing messy spillage.

For more information on WK Elite Vintners visit:
http://elitevintners.com/splash.php

APRIL 2008

Product Quality

In last month’s blog I mentioned that one of the main reasons winemaking has increased in popularity is due to advancement in the quality and increased product selection.

Most major Canadian kit manufacturers have access to commercial grade raw materials, and they source grapes and juices from top vineyards and wineries from around the world including Australia, Chile, Italy & California. Many of these same Canadian kit manufacturers have production facilities boasting state-of-art equipment to test and retest all products prior to distribution to the retail sector. Going back ten years or more this was not the case.

The introduction of many new products and services has also played a large part in the recent growth of the consumer-made wine industry. The introduction of in-store winery services in New Brunswick, where winemakers can make their choice of wines on location, has brought consumer winemaking to a new level.

Products such as “Country Mist” fruit wines and their ever-increasing flavour selection continue to grow in popularity. Another product which has proven very popular is the recently introduced 7-Day Accelerator Pack . This product allows for a much reduced processing time on products like the above mentioned Country Mist kits, which require very little aging time prior to consumption.

Combine this with the availability of products such the Woodland Estate Kit (makes 6 bottles of wine in 10 days), pail bag liners, improved cleaners and sanitizers and there’s little wonder why winemaking has become so popular.

The end result is a consumer-made wine industry which allows for taste profiles equivalent to comparable commercial wines for a fraction of the shelf price.
In summary, I recommend that winemakers shop at and support their local winemaking store. This is where they will find the highest quality products available in the industry, the best selection, the best winemaking advice and expertise and the best service level.

The above-mentioned products and services equate to winemakers receiving the best possible value for their hard-earned dollars.

Cheers!

Blair

March 2008

There has never been a better time to be involved in the consumer-made wine industry in the Atlantic provinces.

Why do I make such a statement? There are several very good reasons.

As a 16-year player in the industry as a store owner, regional director and winemaker, there have never been more winemaking stores and more people reaping the merits and benefits of making their own wines.

There are approximately 75 winemaking shops in the Atlantic provinces. This figure does not include ‘big box,’ hardware, co-op and drug stores who also dabble in the sales of winemaking products.

By my estimation, there are approximately 27 stores in New Brunswick, 24 stores in Nova Scotia, 19 in Newfoundland/Labrador and 5 stores in Prince Edward Island.

The current Atlantic hot spot is New Brunswick. Since the introduction of in-store winery services in 2004, we have seen a mini-explosion of winemaking stores and winemakers. Drop into any New Brunswick store which offers in-store winery services and you note in excess of 100 full pails & carboys in various stages of fermentation. Take a few minutes to observe a winemaker in the process of bottling their 30 bottle batch. Take the opportunity to ask store staff for more detailed information. They will be very happy to answer your questions.

Another main reason winemaking has increased in popularity is due to advancement in the quality and increased product selection.

We, the owner/operators involved in the consumer-made wine industry are wine lovers too, and we know the experience of wine is an important part of life’s celebrations. Like food, there are wines for every event in your life. We have wines for every occasion from the casual to the momentous. You’ll find our wine consultants friendly and helpful, making sure the wine you make complements the occasion you’re celebrating. Choose from hundreds of varieties including such classics as Chardonnay, full-bodied Cabernet Sauvignon, crisp Rieslings and rich Merlots.

Whether you enjoy a glass of wine occasionally or have a wine cellar your friends would envy, we can help you enjoy your favourite wines, all for a fraction of the cost of wine purchased at your local liquor store. We have a wine to suit your every mood, from every day table wines to exclusive limited releases.

In closing, if you’re contemplating a career change, enjoy being active, enjoy sales, promoting and marketing, then joining the consumer-made wine industry as a Wine Kitz franchise owner may be a fitting option. (CLICK HERE for answers to Frequently Asked Questions)

If you’re considering taking a leap of faith and becoming a winemaker, visit your local winemaking store – Wine Kitz would be the preferred choice. (CLICK HERE for a sample Wine List)

~ Blair

April Blog: Product Quality