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California Winemakers Focus On Affordable Luxury

April 10, 2020

California winemakers have been making strides in the affordable luxury segment of wines retailing at the $15-and-above tier lately, an area that appears ripe for further progress even amid the current difficult conditions. Last year, U.S. volumes of California wine retailing at $15 and over a 750-ml. bottle hit 11.13 million cases, up from just 7.1 million cases in 2014, according to Impact Databank. And the segment continued to thrive in the year-to-date through March 22, increasing by roughly 20% in IRI channels in both volume and value.

Increasingly, the California super-premium tier is seeing more regional specificity, with heightened visibility for Central Coast sub-AVAs including Paso Robles, Monterey, and Edna Valley, among many others. Among the brands bringing attention to the Central Coast is Josh Cellars, which launched a higher-end Reserve Tier in 2017. The Reserve range ($18-22) includes a Paso Robles Cabernet Sauvignon, a limited-edition Military Salute Cabernet Sauvignon from Lodi, and a Chardonnay from the North Coast. “The Reserve lineup has been extremely successful, in part because it offers our core consumers the opportunity to trade up and explore California in-depth,” says Tom Steffanci, president at brand owner Deutsch Family Wine & Spirits. Overall, Josh Cellars has more than doubled in size to nearly 3.2 million cases over the past two years, recently earning Impact “Hot Brand” honors. It soared by 63% in IRI channels in the four weeks through March 22.

J. Lohr Vineyards & Wines has long been a part of the Paso Robles fabric, with total volume at 1.7 million cases last year, according to Impact Databank. While most of J. Lohr’s volume comes from its Estates tier—with the Seven Oaks Cabernet Sauvignon ($17 a 750-ml.) accounting for 900,000 cases in 2019 and the Riverstone Chardonnay ($14) at 450,000 cases—the winery is shifting focus to distinguish its home base of Paso Robles through both its Vineyard Series range and newer, upscale offerings. J. Lohr recently innovated in the ultra-popular red blend category with its Pure Paso label ($27 a 750-ml.), launched last fall.

Hahn Family Wines is another Central Coast winery making gains, with its Hahn Founders tier ($15) recently winning a “Hot Brand” award after jumping 16% to 281,000 cases, and its higher-priced SLH range seeing high single-digit growth.

Constellation Brands is also active in the Central Coast with Meiomi, which is now at approximately 1.3 million cases after enjoying double-digit sales growth in the company’s fiscal year through February. Last year, Meiomi received its largest marketing campaign to date, a push called “Flavor Forward.” Constellation’s Prisoner brand from Napa also continues to drive double-digit gains, and was recently extended with an Unshackled range ($27-$30) including a red blend, Cabernet Sauvignon, and rosé.

Joe Wagner, who founded the Meiomi brand before selling it to Constellation in 2015, has also reloaded in the super-premium tier. Last year he unveiled Boen Tri-County—including a Pinot Noir and Chardonnay retailing at $25—which competes head-to-head against Meiomi. Meanwhile, Terlato Wines has extended The Federalist, another Hot Brand, with two higher-end Dueling Pistols red blends sourced from Paso Robles and Dry Creek Valley, respectively. Taub Family Cos. has likewise been expanding its California operations from its base in Mendocino, with brand introductions including last year’s Mon Frère, which features Chardonnay, Pinot Noir, and Cabernet Sauvignon retailing at $16-$17.

Longtime Napa Valley player Duckhorn Wine Co. recently launched Postmark, a new Cabernet Sauvignon retailing at $35 a 750-ml. “Postmark is geared toward making Napa Valley more approachable than ever to millennial consumers,” says Duckhorn senior vice president and chief marketing and business development officer Carol Reber. Meanwhile, the company’s Decoy by Duckhorn label continues to expand rapidly, earning a “Hot Brand” award after growing 17% to 831,000 cases last year. Reber notes that Decoy has equal pull among millennial, Gen X, and Boomer consumers.

John Grant, CEO of Napa Valley’s Hess Family Wine Estates, points to Hess’ Allomi franchise as a key super-premium offering within the portfolio. “We’ve been able to tempt the Hess consumer who was previously in our premium program upstream to Allomi, which is a Napa-based tier of wines that sits at $25-$30 at retail,” he says, noting that the Allomi Cabernet Sauvignon ($30 a 750-ml.), in particular, has been a workhorse, with around 75,000 cases depleted last year. The Allomi lineup also includes Pinot Noir and Chardonnay offerings.—Julia Higgins

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