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C. Mondavi & Family Adapts As On-Premise Declines, Off-Premise Booms

May 8, 2020

While the on-premise shutdown has resulted in difficult conditions for California wineries, St. Helena-based C. Mondavi & Family is seeing a strong performance in the off-premise become a powerful counterweight. The winery expects its on-premise business to be down 95% through the rest of its fiscal year ending August 31, but CEO Judd Wallenbrock said the off-premise boom is helping offset the loss.

“We expect to see the off-premise growing by at least 10%, compensating for a portion of the loss in the on-premise channel,” said Wallenbrock. The lion’s share of C. Mondavi’s wholesale business—roughly 75%—is done in off-premise channels, meaning the company is relatively well-positioned for the crisis. In all, C. Mondavi & Family produces about 1.5 million cases annually with brands including CK Mondavi, Flat Top Hills, and Charles Krug.

At the top tier of the portfolio, Charles Krug, which has annual production of 75,000 cases, is facing challenges as winery visits and events are put on hold. The loss of tasting room sales and events is taking a toll, but the rise of phone and e-commerce orders is providing a buffer. At this point, Wallenbrock expects a 15% drop in DTC sales overall for the fiscal year.—Shane English

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