Duckhorn Sees Continued Growth For Decoy, Set For First Release Of Its Washington WineAugust 26, 2014
Duckhorn Wine Company, founded in 1976 by Dan and Margaret Duckhorn, has a long history of spreading its wings. While the flagship Duckhorn Vineyards in Napa Valley began with a terroir-based focus on Bordeaux varietals (particularly Merlot), today the portfolio spans Northern California’s key wine regions. In addition to Duckhorn Vineyards ($29-$135), the company makes Paraduxx ($48), a line of upscale of Napa Valley blends; Goldeneye ($55-$155), focused on estate-grown Pinot Noir from Anderson Valley; Migration ($32-$55), which specializes in Russian River Chardonnay and Pinot Noir; and Decoy by Duckhorn ($20-$25), formerly a Napa blend now expanded into a varietal line showing torrid growth. Duckhorn’s latest project is Canvasback ($40), a Cabernet from Washington state’s Red Mountain AVA whose 2012 vintage, its first, is slated for release this fall. In all, Duckhorn’s volume is close to 500,000 cases. SND executive editor David Fleming met recently with Duckhorn CEO Alex Ryan and SVP/chief marketing and development officer Carol Reber for an update.
SND: According to our numbers, Decoy rose 46% last year to 255,000 cases. How’s it doing this year?
Ryan: Decoy is still going very strong, and all the Duckhorn labels are riding that momentum. The positioning of our higher-end brands is unique. Goldeneye still owns a luxury position in Northern California Pinot Noir from Anderson Valley. Paraduxx remains a creative Napa Valley blend with excellent sales. Over the last five years, we’ve increased our focus in Russian River Valley for our Migration brand and will continue that commitment into the future. We’re introducing a Chardonnay to the Duckhorn Vineyards portfolio after 38 years, featuring the Napa Valley appellation. So all our labels have upped their game, and continue to do so. And we’ve now ventured into Washington with our new label, Canvasback.
SND: How are things going with Canvasback?
Ryan: We acquired one of the best mountaintop vineyard sites in Washington’s Red Mountain appellation last year, and we’re planting it now, having done our due diligence and settled on a style. We’ve fallen in love with this appellation and will continue to seek land and opportunities there. We’re working with several of Red Mountain’s best growers, buying fruit from them in 2012 and 2013.
SND: Where is Canvasback being made now?
Ryan: The wine is being made at Artifex, a custom crush facility in Walla Walla. We’ve hired Brian Rudin, a Walla Walla native, as our winemaker. Current production is about 2,000 cases. I’d like Canvasback to become big enough to gain national distribution, so that would be about 15,000-25,000 cases in the future.
Reber: One magical price point for Cabernet lies between $25 and $70. Part of the inspiration for Canvasback is that we see an opportunity for a Cabernet at around $40—or $65-$80 on a wine list. Napa wines are awesome, but over-$100 on a list is out of reach for many people. We’re excited to have a very solid wine to offer our on-premise accounts to fill that $65-$80 gap. It’s a very important place for them.
SND: What has the overall company’s expansion curve been like in recent years?
Ryan: We’ve roughly doubled in size over the past seven years, mainly because of Decoy. The other labels, of course, have much more controlled growth. I’ve also stepped up our direct-to-consumer programs, offering very unique select items, and we’ve also increased our special offerings to the trade.
SND: Your new custom crush facility in Hopland has now put Decoy’s production under one roof. How is that transition going?
Ryan: We acquired the Hopland facility last year in about a $19 million deal and moved in this past June. It’s a winemaker’s dream, impeccably designed and fully equipped. It’s also ideally located to support Duckhorn’s needs, anchoring us in the midst of northern Sonoma, Mendocino and Lake counties as well as northern Napa. Having a home for Decoy gives it greater legitimacy and reinforces our commitment. It will also provide overflow capacity in large harvests.
The full interview with Alex Ryan and Carol Reber will appear in the October 1