Fetzer Making Strong Progress On Core Portfolio, With Growth Led By BonterraSeptember 24, 2014
Editor’s Note: In 2011, Fetzer Vineyards was acquired by Chilean winemaker Viña Concha y Toro, in a $238 million deal with previous owner Brown-Forman. Since then, Concha y Toro has invested considerable resources into revitalizing Fetzer, focusing on quality improvement and innovation, while also adding about 50 new sales and marketing personnel and working hard to reconnect with distributors. SND executive editor David Fleming met with Fetzer global marketing director Rodrigo Maturana to get an update on progress.
SND: After last year’s improved trends at Fetzer, how are things proceeding this year?
Maturana: Last year the entire Fetzer portfolio grew by 5%, representing a major shift, as we’d been trending downward for the previous six years. Innovation has helped a lot, along with a sharper focus on exports. This year continues to be positive, particularly for Bonterra ($11.99-$16.99), whose shipments grew by 14% last year and were up 18% though July of this year. Bonterra Chardonnay (up 19% through July) and Cabernet Sauvignon (up 27%) are doing very well. The Merlot is up 10%, even as most of the Merlot segment continues to decline. And shipments of Bonterra Sauvignon Blanc are up 13% through July. We’re very committed to Sauvignon Blanc. The category is in growth mode, and while it’s being led by New Zealand, our style is perfect for the market.
SND: What are the keys to leveraging Bonterra’s appeal?
Maturana: The key is the farm-to-table, organic philosophy. We see retailers like Costco increasing their organic stock, but because people already see wine as a healthy product, they don’t always seek out organic wines. So we’ve been doing media campaigns, as well as a farmer’s market tour, to engage with organic consumers. We’ve toured both coasts, setting up our farmer’s market stand in various locations like Florida, Maryland, Washington D.C., Illinois, Texas, California and Colorado. Our strategy is to talk about Bonterra being fully organic, but also to emphasize that it’s a high-quality wine. We don’t want to be positioned only in the organic (wine) section, because then we’d just be a niche brand. We compete at the same price point as quality labels like Rodney Strong and Coppola, with the added advantage of being organic.
SND: Is Bonterra the market’s biggest organic wine?
Maturana: It’s the biggest in the world as a brand. Chilean winemaker Emiliana is larger as a company. Emiliana is actually owned by Concha y Toro’s proprietors, although it’s not part of the group. While Emiliana produces more than we do, as a bottled brand Bonterra shipped 352,000 cases last year. Our near-term goal is 500,000 cases, which would be huge for an organic brand.
SND: How is progress for the Fetzer brand?
Maturana: Last year the Fetzer franchise, ($6.99-$8.99) including Crimson & Quartz ($9.99-$11.99) and Zipz ($3.99 a 187-ml.), grew by 1%. That was a pretty good number, as Fetzer has been the focus of our efforts to restore growth. This year we’ve made some key adjustments. With the release of our 2013 Gewürztraminer and Riesling, we’ll have Monterey County appellation varietals that will showcase our efforts to bolster quality. We’re now leaders in Gewürztraminer, shipping 233,000 cases last year, with a Nielsen market share of 60%. Fetzer has long experience growing and sourcing California Central Coast fruit, but now we’re getting even more specific, appellating the wines to Monterey County for our Gewürztraminer and Riesling.
SND: What are the key elements for Crimson & Quartz and the Zipz single-serve packaging?
Maturana: Bonterra has a Gen-X or Millennial demographic. With Crimson & Quartz, we wanted to engage younger consumers. It’s easier-drinking wine, and the package is unique. We shipped about 82,000 cases of Crimson & Quartz in 2013, our first full year, having shipped 40,000 cases in 2012. The red blend is much bigger than the white, though the white is also growing. After getting a positive reaction, last year we added a Pinot Noir, Chardonnay and Cabernet Sauvignon, all at around $10. We also launched Zipz as a format for non-traditional venues like stadiums. We’ve partnered with Centerplate and are in the new 49ers stadium, and we’ve added Disneyworld and some Las Vegas locations, as well as yachting venues and ski resorts. We’ve partnered with Live Nation and are a sponsor at the amphitheater in Mountain View near San Francisco, branding the place with Crimson & Quartz. So the focus (for Crimson & Quartz) is on nontraditional wine activities relating to sports and music, while capitalizing on the Zipz packaging.
The full interview with Fetzer’s Rodrigo Maturana will appear in the November 15
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