Nothing Less Than World Class

Sydney Morning Herald

Saturday March 3, 2001

Mark Todd

The new head of Southcorp's flagging wine division has a track record that speaks for itself. Mark Todd reports.

After having turned beer brewer Foster's to wine and guided Rosemount Estates to perhaps its best-ever run of growth, Keith Lambert is now about to try to pull Southcorp out of a rut.

Born in Edinburgh and raised in Canada, Lambert was earlier this week named the new head of Southcorp's underperforming wine business as part of the company's deal to buy Rosemount Estates for $1.49 billion. The market is hoping that 45-year-old Lambert, chief executive of Rosemount, and his team can help Southcorp to produce the same spectacular financial results as those churned out by Rosemount.

That expectation is certainly reflected in Southcorp's share price which, at $6.24, is up almost 25 per cent since reports about the merger began to circulate last month. The job, Lambert says, ``won't be a walk in the park".

Lambert has a reputation for long-term planning. He was a member of the Foster's think tank that executed the acquisition of Mildara Blass in 1996. Foster's, after buying Beringer last year for $US2.6 billion, is now the world's third largest wine business.

Trained as an accountant, Lambert started in the beer business in 1983 with Canada's Carling O'Keefe and then Foster's which, through its Molson Breweries joint venture, bought the company in 1989 at the tail end of its drive to conquer the world. That delivered Lambert what he describes as his ``big break".

Plucked from the marketing department in his mid-30s, Lambert was inducted into Foster's upper echelon as the head of finance and strategy, reporting to rising star Ted Kunkel. A year after Kunkel was named Foster's chief executive in 1992, Lambert was handed responsibility for strategy and development for all of Foster's.

His blueprint helped transform Foster's from a complex conglomerate, a hangover from the Elders days of the 1980s, to a more streamlined business focused on beer, wine, leisure and hospitality.

Mildara was the deal that started Lambert thinking about wine as a career, rather than just an area of personal interest to be pursued through visits to the Burgundy and Bordeaux regions of France. Until then, Lambert says, ``wine was my hobby. Beer was my business." Then, while in Australia he met and married Rosalind Oatley, the daughter of Rosemount Estates founder Bob Oatley.

``The thought of doing anything other than beer had never crossed my mind," Lambert says. ``I was quite happy with a life of beer. When we put Foster's into the wine business, I got to thinking it was time to go into the family business."

While ruminating on his career options, Rosemount's chief executive Chris Hancock took ill and Lambert took over the company's running. In 1997 Rosemount earned $16 million before interest and tax from $100 million in sales. In the year to June 2001, the company is slated to make more than $100 million from $370 million in sales.

The strategy behind the success is deceptively simple semi-premium and premium product sold under a tightly managed and well marketed brand. Around three-quarters of sales are derived offshore.

At Southcorp, Lambert inherits a wine group with two of the market's best brands in Penfolds and Lindemans, but one which has consistently underperformed either for operational or demand-related reasons. Asked whether Southcorp could ever replicate Rosemount's returns, Lambert says ``probably not. But I think we can create a world class, highly profitable wine business".