Ste. Michelle Investing In Flagship Brand To Double Down On Quality

Ste. Michelle Wine Estates has seen plenty of change the past few years following its $1.2 billion acquisition by private equity firm Sycamore Partners in 2021, including exiting brands like Col Solare and Patz & Hall and sharply reducing grape contracts in its home state of Washington. Now, the company tells SND, it’s focused on burnishing the quality credentials of its flagship Chateau Ste. Michelle brand to restore growth moving forward.

Chateau Ste. Michelle stands out among leading domestic premium-plus wines in the U.S. as the only non-California winery. The brand declined 4.5% in the U.S. last year to 2.65 million cases, while portfoliomate 14 Hands also fell 7% to 1 million cases. But the company notes that it’s making significant new investments in the Chateau Ste. Michelle wines, including increased use of small French barrels in fermentation and aging.

“We see this moment, as we celebrate 90 years as one of the country’s leading wineries, as the perfect time to double down on our wine quality,” says David Bowman, chief commercial officer at Ste. Michelle Wine Estates. “Recognition of the quality of Washington’s luxury Cabernets has been extraordinary over the past 20 years, but only fully appreciated by a relatively small number of wine enthusiasts. We believe that Chateau Ste. Michelle, and Washington in general, can and will be the quality leader in Bordeaux varieties at every price going forward—but especially Cabernet.”

While Chateau Ste. Michelle has been impacted by market headwinds, it has been gaining share in the pricing segments in which it competes. “We make wines across a price spectrum, from $15 per bottle to over $150 per bottle, and across different varieties to intentionally showcase the distinctive styles of Washington wines to as many consumers as possible,” says Bowman. Targeting the better-for-you consumer trend, this spring the winery released a new Chateau Ste. Michelle Light lineup of low-calorie, zero-sugar, low-abv Chardonnay and Sauvignon Blanc wines ($13 a 750-ml.).

Elsewhere in the portfolio, Ste. Michelle has introduced a new Founders Series under its Columbia Crest brand. Sourced from the Columbia Crest estate vineyard and other sources in the Horse Heaven Hills AVA, the new range is aimed at the on-premise, where it’s targeted to sell at $15 by-the-glass. It includes Cabernet Sauvignon, Merlot, and Chardonnay bottlings.

“We’re bullish on the future of wine, but there are a lot of near-term pressures on the category that need to run their course—both unique to wine and outside of wine—before wine returns to growth,” says Bowman. “As a product of an annual agricultural cycle, our industry could be doing a much better job of highlighting these distinctive attributes of wine to consumers who are opting for mass-produced alternatives.”—Kimberly Carmichael

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