Opportunities in Difficulties

In the midst of the declining buying power and import difficulties, Sababay Winery rises sky high.

Ronald Prasanto, the owner of Kopi Pak Wawan jokingly called the man as “certified drunkard”. However, until today, there has been no one in Indonesia that has worked in the wine industry from upstream to downstream like Yohan Handoyo, the COO of Sababay Winery. Passion met Yohan in his old working place Decanter, Kuningan and talked about the current situation for local wine industry.

I knew you as Wine Director in Decanter, how come you ended up in Sababay?

I’ve worked for 4 years here (Decanter) since 2008, it was an amazing lesson, priceless! Every day I met customers as sommelier, I learnt what they want, what they like, dislike, expectations, and misconceptions. I knew the big picture of wine market in Jakarta.
In 2012, I joined Dimatique, a wine distributor company. I was handling imported brand up to 300-400 SKU (Stock Keeping Unit), and in 2 years its growth reached 76%. In Februari 2014, I had the chance to act as wine judge for blind tasting in Wine Style Asia in Singapore. They were very though 2 days, because time is scarce and there’s so many participants. When they offered me to stay for the announcement, I was very tired and decided to go back home. At the time, Sababay won an award with its Moscato D’Bali. I knew the owners of Sababay, Mrs. Mulyati Gozali and (her daughter) Evy Gozali for quite a long time. They saw my photo there and when I got home, they asked me to join the company.

Why did you take the offer?

First, it’s challenging. Second, I’ve been lucky because as far as I know, I’m the only Indonesian that has been involved in all aspects of wine industry. I started as a journalist who wrote a book (Rahasia Wine, 2007), and then I’ve been in retail (Decanter), import and distribution (Dimatique), what’s left for me? Production. Our business model is, we buy grape from farmer, but we also have our own vineyard for R&D purpose. If I took the chance, basically my exposure in this industry is complete. I’m no longer young, so I guess it’s a good opportunity came at the right time.

How was the situation when started working in Sababay?
90% wine that have been sold in the market are imported. Fortunately, we came at the right time, when the regulations and the market situation is difficult for imported goods, therefore, we have better chance to produce local wine. And then our currency was weakened and the buying power declined.

All of those things are beneficial for Sababay?
Yes. We never calculate those factos in the growth plan, but they have significant impact. Sababay officially sold our products in 2013, when I joined the company in 2014, the sales growth from 2014 compared to 2013 reached 276%.
How many local grape varieties that can be used to produce wine?
I don’t know the number exactly, but in Sababay, we use Muscat Saint Vallier for the white grape, and Alphonse Lavallee for the red one. Alphonse Lavalle only cultivated in 2 countries: Indonesia and South Africa. In South Africa, the grape is not used to produce wine, they use it for raisin instead.
Before Sababay was found, the grape farmers used to sell it (through middlemen) as edible fruit, or table grape, but the quality was terrible, and they usually end up as offerings. When we decided to work together with farmers, we stated beforehand that they have to raise the quality; we showed them the ways to get there. If they could offer the quality that we demanded, we were willing to pay much higher.

As far as I know, Alphonse Lavalllee have thin skin, it’s not ideal for wine?

Indeed, that’s why you’ll see faded color. Nothing we can do about that. That’s why since the begininning of this year, we use the blend of both world, we tried Cabernet Sauvignon from Australia, South Africa. We found out that the combination of Alphonese Lavallee and Cabernet Sauvignon from Mildura (border of New South Wales and South Australia) work very well together, we used the blend since the beginning of this year.
If we talk about proportion, we use more Cabernet Sauvignon for red grape, but for white grape, we still use 100% Muscat Saint Vallier. It’s actually not bad, our Muscat Saint Vallier that we use for Moscato D’Bali has been displayed on wine museum in Bordeaux, La Cite Du Vin. They have one special shelf for Indonesian wine and Sababay’s Moscato D’Bali is displayed there.

Since you joined, what are the impacts that you’ve made?
I didn’t do it by myself, but with team. When we analyzed market, we got interesting discoveries on the Bali market and market outside Bali. Bali has high volume sales, but you can’t create customer loyalty because people who drink wine come and go. Outside Bali, while the volume is not as big, but you can expect to build loyalty. The challenge is to build brand image, reputation and educating the market.
Many people came to me and said, “Yohan, your wine is not like Australian or Chillean!” Of course not, we use local grape, it would be a lie if I said the otherwise. After digging deeper, we found out that the understanding of Indonesian on wine is not that deep, the important thing for them is they can enjoy the wine. Therefore our strategy is to make local wine, from local grape, for local palatte and local wallet, except for Bali market. After some distribution and marketing strategies, we knew that the SKU that sell very well in Bali, doesn’t perform well outside Bali, the style are different. Bali tend to like dry wine, meanwhile outside Bali, they prefer sweet wine.

You’ve just launched Mascetti, a port style wine, what was the story?
When we visit the market, we often heard customer want red wine with full body, sweet, lot of flavor. When asked the wine variant, numerous times they point to port style wine, even though the brands may vary. I saw that the port wine in Indonesia that came from traders is only importing and selling, they didn’t think of market activation. Market activation is crucial to build brand loyalty; you got to have promotion, marketing communication strategy, making events, etc. So I thought, why don’t we make our port style wine, but we really pay attention to the marketing strategy.
The result is not bad. We launched Mascetti in September 2017, in terms of value, Mascetti’s sales contribute to 42% of the total sales in September. However, we designed Mascetti for market outside Bali because of its high alcohol content, around 19%. If you drink 19% abv wine in Bali, it’s like sauna, you can be dehydrated (laugh).

Which cities in Indonesia that has big sales?
Sababay is present in 21 points in Indonesia, and surprisingly, Pontianak is doing well. The first time I got there, I thought, “forget it, this is not market for wine, it’s market for people to eat kway teow.” Actually, I was wrong.
Medan is also interesting. In every market survey, I always visit 3 places: supermarket, restaurant, and night club or night scene. The restaurant and night club is quite promising, but be got weak in the knees when we came to supermarket. Let alone wine, other goods such as diaper, shampoo and cigarette are all smuggled. It’s no wonder they can sell wine in supermarket for very low price. Even the price of our most affordable products is not relevant nor competitive there.
But we keep on penetrating, discussing, and held tasting session, and then we found out something funny. If the Medan people is faced with 2 wines, 1 imported and the other is local, when both of them are tannic, sour, and they can’t enjoy it, they opt for the imported one even though it cost them up to Rp 300.000-500,000 higher. They have the money, the people who drink beer and wine are different animals. However, when they are faced with one imported tannic wine, and a local wine they can enjoy with local food, they chose the local wine, even though the price is higher than the imported, smuggled wine. This is a very unique consumer behavior.

The verdict? Indonesians love sweet wine?

The same thing happened all over the world. In this industry, I’m getting tired when people say our Moscato D’Bali is ladies’ drink. If you go to Piemonte, Italy, the origin of Moscato , it’s their answer to Coca-Cola. You can find men, women, old, young are wanting something sparkling, fresh, slightly sweet. When people said sweet wine is cheap wine, what is the most expensive wine in the world? It’s Chateau d’Yquem, and it’s not only for ladies.
There are so many misconceptions; some also claimed that rose wine is sissy wine. You go to Provence, France, in summer, everybody drinks rose. We also often meet with men, when asked their favorite wine, they will say, “Shiraz, Cabernet Sauvignon, 14% abv, etc,” while continuously drinking our Moscato D’Bali, and they keep on asking for more (laugh).

What’s the best way to learn about wine?
Join a community. If you drink wine now, and then have another in the next 2 weeks, a month, you’ll forget what you’ve learnt. Ideally, you can drink several wine at a given time, but if you do it alone, you will, one: drunk, two: expensive. If you join a wine clubs, they have programs, let say this week we’ll drink Shiraz. The member will collect money to buy Shiraz for several brands so you’ll spend less, you will also have the chance to taste Shiraz from different brands at one time.
Actually, you don’t have to own miraculous tongue to taste wine. The most important thing is to have the chance to taste different products at one sitting. I couldn’t tell the difference between Durian Musang King and Petruk, but when I had the chance to eat both of them, I was like, “I see, that’s the difference!” There are so many wine communities; some are moving from one place to another, the others were made by the places or wine houses.

The last one, we have so many new coffee shops, but that’s not the case with wine house, what’s the cause?
The permit. To build a coffee shop, I can buy a coffee machine today and start selling tomorrow. It’s different case with wine, and the permit is getting more and more difficult.