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Brown-Forman Sharpens Focus On Sonoma-Cutrer, Korbel Post-Fetzer

October 24, 2011

Earlier this year, Brown-Forman sold Fetzer and other Hopland, California-based wine brands including Bonterra, Five Rivers and Little Black Dress to Chilean winemaker Concha y Toro. That deal, worth $238 million, reduced Brown-Forman’s wine volume by about two-thirds. But through its continued ownership of super-premium brand Sonoma-Cutrer and its marketing of Korbel sparkling wines, Brown-Forman still sells over 1.5 million cases of wine annually in the U.S. market.

Sonoma-Cutrer, built as an on-premise brand specialized in Chardonnay, was up 12.2% to 295,000 cases last year, according to Impact Databank, despite continuing difficult conditions across the U.S. on-trade. This year, its volume growth is at around 9% growth, according to Wayne Rose, Brown-Forman’s vice president, group brand director, wine. Sonoma-Cutrer’s core Russian River Ranches label, which accounts for 62% of brand sales, has been trending upwards at 7%. But its Sonoma Coast line ($25 a 750-ml.)—which Brown-Forman is now targeting with a major off-premise push—has provided even stronger momentum.

“Sonoma Coast has been doing extremely well for us in the retail trade,” says Rose. “With that comes wider distribution, which means more retailer attention, display activity, and all those things you can leverage for even faster growth once the ball is rolling.” The brand’s Pinot Noir offering is expected to be a significant future growth catalyst. Until recently, it was offered only by allocation, “which means people sometimes get a little skittish about putting it on the menu or the shelf,” Rose adds. “Now, we’ll have an opportunity to really ‘place’ it both on- and off-premise.”

Sonoma-Cutrer’s bread-and-butter remains the higher-end area of the on-premise, and it’s widening its reach there. Built in white tablecloth venues, the brand has been extended into what Rose calls “premium-plus or casual-plus” accounts. “As long as the fine dining, white tablecloth restaurants are consistently putting Sonoma-Cutrer on the list, we’ve found we can start to dig a little deeper into the market,” he says. “That said, we always want to be at the top end of by-the-glass pricing, say $15, or maybe $13 in the more casual accounts. After that people begin trading up to a bottle.” For all the struggles of the fine dining trade during the downturn, Rose is sanguine on Sonoma-Cutrer’s outlook. “The high end is rebounding aggressively,” he argues. “The wind is at our back in the super-premium segment where Sonoma-Cutrer plays.”

Korbel, meanwhile, was up 1.2% to 1.3 million cases in U.S. depletions in 2010. While its core Brut and Extra Dry sparklers are still growing, Rose sees strong progress from two newer wines to the portfolio: Sweet Rosé and Sweet Cuvée. “Korbel’s foundation has been the dryer styles,” he says. “While those wines still command tremendous loyalty, we understand that consumer trends evolve. The sweeter taste profile is where consumers want to go right now, and if we don’t provide it, someone else will.”


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