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Upmarket Shift Paying Off For Monterey’s Hahn Family Wines

November 5, 2015

Hahn Family Wines’ recent premiumization push appears to be paying off. Over the past two years, the company has focused on developing its premium-and-above wines from its Santa Lucia Highlands (SLH) and Arroyo Seco vineyards, where it owns 650 acres and 460 acres of vines, respectively.

Hahn president Tony Baldini tells SND the strategy is to better align the brand porfolio with the company’s vineyards and rely less on negoçiant fruit. Foremost, Hahn is getting behind its SLH Chardonnay ($25) and SLH Pinot Noir ($35) labels, which do about 60% of their business on-premise, selling by-the-glass in the $12-$14 area. “The market is reacting strongly,” Baldini says, adding, “These are the wines we’re staking our future on.”

Hahn is currently producing about 10,000 cases of the SLH Chardonnay and 25,000 cases of the SLH Pinot, and has ample capacity to ramp up output. Of the family company’s 650 acres in SLH, about 100 are out of production at the moment, either due to modernization initiatives or the switching out of certain varietals, Baldini notes.

Meanwhile, Hahn’s core varietal range, retailing at $15, is also showing progress following a recent packaging update. With a 60% off-premise sales base, the varietal lineup is poised to break a quarter-million cases this year. Other brands in the Hahn Family portfolio include Smith & Hook ($25)—a Central Coast Cabernet that currently sells around 50,000 cases and is growing at 25%—and Boneshaker Zinfandel ($25), which has doubled over the past year to about 20,000 cases.

While it has upped its game at the premium-and-above level, Hahn has retreated from the ultra-competitive $10 area, selling the Cycles Gladiator brand to Wine Hooligans last year. “That segment is extremely competitive, and you fight over every dime on the cost of glass and cork. We didn’t see it as a long-term play for us,” Baldini says. While the move out of the $10 segment initially resulted in a loss of volume, Hahn’s overall U.S. business—at roughly 360,000 cases—is now back about even with where it was two years ago—but recentered at significantly higher price points.

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