California’s Hahn Leverages Wine’s Premiumization TrendJune 26, 2019
In the midst of a long-term premiumization drive, Monterey County-based Hahn Family Wines is off to a strong start in 2019, with sales up about 10% through May. In total, Hahn has annual volume of over 400,000 cases, and the company continues to boost its presence at the market’s higher tiers. “Each year we’re trading our business up,” says Hahn president Tony Baldini. “As volume grows, we’re also increasing our revenue per case.”
The heart of the portfolio is the core Hahn tier—which sells roughly 250,000 cases at around $14 a 750-ml. Hahn Pinot Noir is the largest individual wine in the company’s portfolio. To spur further growth for the Pinot, Hahn released the wine in 375-ml. bottles last year, a move that’s been well received.
The company sees further upside for some of the smaller releases within the Hahn tier, including the Grenache, Syrah, and Mourvedre blend (GSM). “The GSM is still a bit of an eyebrow raiser for people who know about Hahn Pinot Noir and Chardonnay,” says Baldini. “It has big potential.” Winemaker Paul Clifton agrees, adding that Winebow, Hahn’s new distributor for New York, is particularly bullish on the GSM blend.
Higher up the ladder, the company’s Arroyo Seco-appellated Hahn Estate range is rolling out nationally this year. Aimed at the on-premise, Hahn Estate includes a Pinot Noir and Chardonnay, targeted to sell at $14 and $12 by the glass, respectively. Clifton says there’s plenty of room to grow the range from the company’s 450 acres in Arroyo Seco. “For the Pinot, we could do close to 80,000 cases and half that for the Chardonnay,” he says.
Hahn also continues to nurture its higher-end Santa Lucia Highlands (SLH) wines, which have performed well, with the Pinot Noir reaching 38,000 cases for the 2018 vintage, and the Chardonnay at 14,000 cases. Clifton adds that the SLH Pinot Noir has the capacity to roughly double in size. It’s already the number-three luxury Pinot Noir in IRI channels, he notes.
While direct-to-consumer sales are currently less than 5% of Hahn’s business, Baldini expects them to take a double-digit share over the next few years as the company looks to enhance its hospitality and tourism facilities. Currently, Hahn has tasting rooms at the estate in Soledad and in Carmel-by-the-Sea.—Shane EnglishSubscribe to Shanken News Daily’s Email Newsletter, delivered to your inbox each morning.
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