Sparkling Wine a Hit for Winery
Fourteen years ago, John Wright and several business colleagues discussed whether there was a singular American style or flavor that could be incorporated into a sparkling wine. Was it possible, they wondered, to develop a product that would immediately appeal to the nation’s palate?
“Well, we decided that there was no such thing as a so-called American taste because of the ethnic and regional diversity in the United States--one in which each group possesses its own food and wine traditions,” he said. “So, we decided to make the best wine we could from our wine-maker’s point of view and then convert Americans to that taste.”
Positioning Domaine Chandon in a leadership role during those early days has worked beautifully for Wright’s M & H Vineyards Inc., the first French-owned wine venture to cross the Atlantic and settle in California.
The winery has known steady and impressive growth in the years since the U.S. subsidiary of Moet & Chandon released its first bottles of Brut in 1977.
In fact, the distinctive Napa Valley facility’s sales in the coming year are projected to exceed 380,000 cases, up from its first offering of 20,000 cases a decade ago.
Wright, who exudes the animation and energy of a rookie salesman, has been president of the Yountville winery since its 1973 inception. At the time, he says, only Schramsberg Vineyards was making premium sparkling wine, primarily from the two classic Champagne grapes, Chardonnay and Pinot Noir.
Now there are more than 30 different California companies with a methode Champenoise product--one made according to the French tradition of fermenting still wine in the same bottle as it is later to be sold. (Despite the competition at the high-priced end of the market, most sparkling wine sold in this country is made from one of two less expensive processes: transfer or bulk.)
‘We Could Have Sold a Lot More’
“The new kids on the block are now finding it takes longer for them to make a profit than it did for us,” Wright said. “In our first two years we could have sold a lot more product than we did.”
Some of the more recent entries in the sparkling wine category are those firms which initially began, and remain, as table wine producers. Wright doesn’t see the reverse happening to his company and basically rules out development of any Domaine Chandon wine without sparkle.
A dual role can create problems, he says.
“I believe in sticking to our strengths, and Champagne is what we know. Champagne is also a more profitable category than still wine,” he said. “Of all the wine made in the United States, the largest selling wine priced over $10 a bottle is Domaine Chandon.”
Wright also says that consumers have more brand loyalty when it comes to Champagne than with still wines, where experimentation is the rule.
As such, he acknowledges that a portion of Domaine Chandon’s initial success was due to chauvinism. Namely, Wright estimates at least 50% of all sales were generated simply because such a premium wine was made in California rather than France.
But being one of the first isn’t quite enough now in the highly competitive sparkling wine market, which, in addition to the domestic ventures also includes a large number of imports. Today, wine must sell on its merits.
New Marketing Priorities
As a result, new sales strategies have been sought, and markets previously overlooked are priorities.
“We had done a lousy sales job in New York over the years, but now Domaine Chandon is on fire back there,” Wright said.
During a recent interview, Wright said that his company is planning to introduce a few new twists in the near future. The first will be a 750-milliliter version of the company’s highly regarded reserve wine, currently sold only in magnums (1.5 liters).
Domaine Chandon Reserve, about $35, is kept in contact with the bubble-inducing yeast for more than 4 1/2 years before being released, or more than twice as long as the firm’s main line of Brut and Blanc de Noir. The extra attention produces a wine with finesse, fine beads and delicacy. The reserve is only made in those years in which the grapes are considered exceptionally good.
In 1988, the winery will release a “super cuvee " along the lines of Moet & Chandon’s Dom Perignon. Wright said this latest offering has yet to be named, but did not totally rule out something familial such as Dom Chandon.
After all, Wright says, “we’re in the luxury products business.”
Foreign Developments--Wright and other California sparkling-wine producers have been given a partial assist in their marketing strategies because of currency exchange rates, which have pushed up the price of many imported French Champagnes.
A recent trade industry report found that the exchange rates are one of the reasons that shipments of French sparkling wine to this country declined slightly during the first nine months of 1986, compared to the same period the previous year.
Some French Champagne houses, though, did very well during the January-to-September time span. For instance, case shipments by Moet & Chandon increased 24%, according to the Wine Investor, a Los Angeles-based newsletter.
Moet & Chandon, the leading French importer, reportedly shipped 428,000 cases to the United States during the first three quarters of 1986, or more than the combined totals of the next two leading French firms (Mumm and Taittinger).
Wild About Gourmet--Sparkling wines are not the only category to benefit from consumers’ growing interest in premium foods and beverages. A recent study of the specialty food market found that sales are projected to climb to $13 billion by 1990, from a current level of $8.5 billion.
The impressive sales gains are being fueled by a proliferation of outlets specializing in upscale foods. Since 1980, the number of specialty food stores has quadrupled to 6,000 nationally, those supermarkets carrying at least some gourmet product lines have jumped 50%, and there are 9,000 mail-order catalogues that offer more than one high-priced food item, according to Frost & Sullivan, a New York-based research firm.
The study defines gourmet foods as being those that employ premium ingredients, blended through careful processing into the highest-quality items available. The category is further identified through “excellence in packaging and presentation.”
Included in the grouping are natural sodas, sparkling waters, decaffeinated teas, specialty meats such as pates and sausages, chocolates and super-premium ice creams.
Not too surprisingly, the purchases are being made primarily by the postwar baby boomers.
“Coupled with a high level of education and a willingness to experiment with exotic foods, the affluence of this group has fueled an explosive growth of these items,” Frost & Sullivan stated.