Ste. Michelle’s Toby Whitmoyer On What’s Next For Washington Wine
November 21, 2023Ste. Michelle Wine Estates is by far the leader of the Washington wine category, ranking seventh among all wine marketers in the U.S. at 7 million cases last year, according to Impact Databank. Acquired by private equity firm Sycamore Partners for $1.2 billion in 2021, Ste. Michelle is in the midst of a transformation aimed at solidifying its business for the long term. This year it welcomed former Peet’s Coffee CEO Shawn Conway as its chief executive, helming a leadership team that also includes Toby Whitmoyer, president, Washington; Amy Prosenjak, president, Oregon; and David Bowman, president, California. SND executive editor Daniel Marsteller recently caught up with Whitmoyer, head of the Washington unit, to see what’s next for Ste. Michelle in its core category.
SND: From a big picture perspective, what’s working well right now for Washington wines in the marketplace, and what’s not?
Whitmoyer: As far as what is working for Washington, I would point to quality, value, and diversity. There is no doubt that Washington produces some of the highest quality wines in the world. The value for that quality is also unparalleled. Within the $15-$25 price point, Washington is performing well—up 6% over the previous year. And the diversity of the wines we can offer in Washington is a strength. Though we’re most known for Cabernet, Syrah, Merlot, Chardonnay, and Riesling, we grow over 80 varieties of grapes, and there’s truly a wine for every person at every price, occasion, and style.
As far as challenges, Washington mirrors the rest of the wine industry with declining sales due to increased competition in the broader alcohol category and a need to do a better job of attracting the next generation of wine consumers. As an industry, we need to continue to evolve how we speak to new wine consumers and deliver products and experiences that surprise and delight them.
SND: Which brands and price points is Ste. Michelle focused on in the near-term?
Whitmoyer: We focus our resources and attention on what we do best and what truly defines us. We’re the leading wine company in Washington with the top three Washington brands—Chateau Ste. Michelle (at 2.8 million cases in the U.S. last year, according to Impact Databank), 14 Hands (1.1m cases), and Columbia Crest (485,000 cases)—and 2,600 acres of estate vineyards. We’re also the leader in Oregon with the top two brands there: A to Z (380,000 cases) and Erath (320,000 cases).
There is an attractive opportunity to take advantage of key consumer trends to recruit new consumers through new products such as 14 Hands Unicorn and our Liquid Light brand (71,000 cases), both of which are experiencing strong growth. Meanwhile, we continue to increase our focus on building our share of the ultra-premium and luxury tiers by introducing more consumers to brands such as Intrinsic, Eroica, and Spring Valley Vineyards.
SND: There’s been plenty of discussion about SMWE’s reduction of Washington grape contracts by 40% this year. What will be the main ramifications of that decision for both Ste. Michelle and Washington wine overall?
Whitmoyer: Washington, like many other wine regions around the world, has experienced an oversupply of grapes in recent years due to declining consumer demand. So, this summer we began working with our grower partners in Eastern Washington to adjust our grape supply for the ongoing health of our business.
Our relationships with our growers are extremely important to us. By making these changes with them, we’re ensuring that we’ll be a valued partner to them over the long term. Getting our business in balance will enable us to focus on crafting the highest quality wines possible from Washington.
We’ll have more on Ste. Michelle’s new product pipeline and recent marketing efforts in Part 2 of this interview.
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