Duckhorn Names Deirdre Mahlan Permanent CEO, Closes Sonoma-Cutrer Deal

The Duckhorn Portfolio announced early this morning that it has named former Diageo North America president Deirdre Mahlan as its permanent president and CEO. Mahlan had been serving as interim chief executive following the retirement of Alex Ryan last September.

A three-decade industry veteran, Mahlan spent 20 years at Diageo, culminating in leading its North America business. Prior to that she spent three years at Joseph E. Seagram & Sons and eight years at PricewaterhouseCoopers. She has served on Duckhorn’s board, which she chairs, since 2021.

“Despite the external headwinds facing our industry, I have strong conviction that the company is well-positioned to leverage our industry leadership, talented teams, and extensive partnerships to remain at the forefront of the luxury wine category,” Mahlan said in a statement.

In addition to the leadership appointment, Duckhorn said it has closed its previously announced acquisition of Sonoma-Cutrer from Brown-Forman for $400 million in a combination of stock and cash, giving Brown-Forman a 21.5% stake in Duckhorn. According to Impact Databank, Sonoma-Cutrer grew 7% to 580,000 cases in the U.S. last year, propelled by upscale Chardonnay.

Mahlan said the Sonoma-Cutrer deal “broadens our reach in the luxury Chardonnay category and further cements our place as the premier pure-play producer of luxury wine in the U.S. We believe this acquisition will enhance our ability to deliver a full portfolio of luxury wines to the consumer.” Duckhorn added that the acquisition will help it accelerate growth overall looking forward, as Sonoma-Cutrer has “limited account overlap” with its other brands.

Meanwhile, Duckhorn said sales for its fiscal third quarter ended in April were in the range of $91 million to $93 million, reflecting “continuing softness in the wine market and a lower-than-expected response rate to the company’s Kosta Browne appellation series offering.”

According to Impact Databank, top-seller Decoy by Duckhorn grew an estimated 2% to 1.45 million cases in the U.S. last year, up from 1.1 million cases three years earlier. Decoy recently expanded with Featherweight, a new better-for-you entry with 80 calories per five-ounce serving and an alcohol content of 9%. It’s line-priced with Decoy’s existing California Sauvignon Blanc at an SRP of $20. Flagship label Duckhorn Vineyards rose an estimated 3.5% to 305,000 cases in 2023, while Decoy Ltd jumped 35% to 166,000 cases.

Duckhorn added that it’s in the midst of a review of its route-to-market, “with the goal of driving a significant increase in focus and investment from our distributor partners.” Its current distributor lineup includes top players like Southern Glazer’s, RNDC, and Breakthru, with RNDC handling its brands in Texas, Southern Glazer’s in New York and Florida, and Breakthru in Nevada. The company self-distributes in California.—Daniel Marsteller

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