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Interview, Part 2: Ted Baseler, Ste. Michelle Wine Estates

January 11, 2017

In the second part of our interview with Ted Baseler, Ste. Michelle Wine Estates’ chief executive discusses the group’s California portfolio and partner brands, as well as trends in its core Washington business.

SND: You mentioned strong premiumization trends within the Washington wine segment. What other developments are noteworthy within the category?

Baseler: We’re seeing high levels of interest in Washington-produced Cabernet. It’s becoming the varietal of Washington, although we still produce a lot of Riesling. There’s also great interest in Syrah, GSM (a red blend consisting of Grenache, Syrah, and Mourvedre) wines and Rhône-style wines overall from Washington. We have a wine called The Pundit, which last year was in the Wine Spectator Top 100 and retails at around $25. It’s a joint venture with Michel Gassier and Philippe Cambie of the Rhône, which we launched in the spring of 2015. It’s been wildly successful and our first vintage sold out quickly. We’re really excited about the prospect for developing a broader reputation for Syrah. Another wine in the same series is a GSM blend called Tenet, which retails at $70.

SND: How did Washington’s 2016 harvest turn out?

Baseler: I recently met with Steve Warner of the Washington State Wine Commission, and he’s projecting that it’ll be a 270,000-ton harvest, which will be—by far—an all-time record for the state of Washington. And we continue to add vineyard acreage, so I think the future is very bright. We also definitely welcome in others that have come from, say, California to Washington. There’s a big enough tent for everyone.

SND: Looking at SMWE’s California brands, which are demonstrating notable growth?

Baseler: Stag’s Leap Wine Cellars has been incredibly successful. It has received outstanding scores, and we basically sell out of every vintage. The estate wines from Stag’s Leap Wine Cellars—the Fay, S.L.V. and Cask 23 labels—are performing exceptionally well. They’re selling out almost upon release, and they range from about $125 to $260. It demonstrates that even at high prices, people are enthusiastic about these collector wines. Also, last April we acquired Sonoma’s Patz & Hall winery, which has top-quality Pinot Noir and Chardonnay. We’re seeing tremendous interest in Patz & Hall’s Dutton Ranch and Hyde Vineyard releases, priced from about $40 to $100.

SND: Speaking of Stag’s Leap, are you able to comment on the lawsuit filed by SMWE against Treasury Wine Estates and The Stag brand last year?

Baseler: I would just make a brief comment, and that is that we believe we’re on the right side of this issue. And the Stags Leap District Winegrowers Association agrees.

SND: What’s happening within your portfolio of partner brands?

Baseler: We’re experiencing very good growth with almost all of our partner brands, including Villa Maria from New Zealand and Italy’s Antinori, whose Tignanello ended up number-eight on the Wine Spectator Top 100 list, which we’re very proud of. Also from Italy, we released a new wine last year called Mamma Mia, which features a red blend and white blend at around $12. We think it has great potential.

SND: Any other key initiatives to mention?

Baseler: One of our most exciting 2017 initiatives is the 50th anniversary of Chateau Ste. Michelle. When you think about the wine world, it’s different in America than in Europe. Fifty years is a big deal here. In March, we’ll be launching a commemorative retro label for Chateau Ste. Michelle. It will be a special bottling of Cabernet Sauvignon with the label featuring a map of Washington and France, which we used to feature on the Chateau Ste. Michelle bottles years ago to indicate the parallel between Bordeaux and the Columbia Valley.

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