The big leap into success

When Bob Trinchero discovered that one of his wines had failed to ferment properly, he bottled it anyway and sent it to market. Larry Walker reports on how that decision enabled Trinchero to become one of America’s biggest wine companies.

Trinchero Winery in California
Trinchero Winery in California

Trinchero Family Estates is one of the five largest wineries in the US. Yet not so long ago, the Trinchero ­family was selling jug wine from their historic Napa winery in St Helena, under the Sutter Home label.

How did it grow from that ‘mom and pop’ operation into an international power player with sales of $1.4bn a year, according­ to industry estimates? 

The story begins with Zinfandel, a very California opening.

Accident of history

The original Sutter Home Winery was established in 1874 by a Swiss-German immigrant. Like most California wineries, it was shut down by Prohibition in 1919. When Prohibition ended in 1933, the ­winery remained closed until 1948, when it was bought by John and Mario Trinchero, whose family had been in the wine business in Italy.

Twenty years later, Bob Trinchero, the oldest son of Mario, tasted a Zinfandel made from grapes grown in the Sierra Foothills. He liked what he tasted and started making a robust red under the Sutter Home label, well received by both consumers and the wine trade. A few years later, in an attempt to make the Zinfandel even more intense, as was the fashion then in California, Trinchero drained off or bled part of the juice before fermentation. This juice was a pale pink rosé which was moderately successful in the market.

In 1975, one tank of that pink wine ­experienced a stuck fermentation, leaving some residual sugar in the finished wine. Trinchero decided to send it to market and it became a sensation. US wine consumers lapped up Sutter Home’s White Zinfandel in vast amounts, making it one of the most popular wines of the late 1970s and early 1980s, with more than 2m case sales.

So it could be said that the success of Trinchero Family Estates (TFE) today is the result of that inept yeast that failed to ­ferment the wine to dryness.

The success of TFE since then has been no accident, but a shrewd and steady ­expansion through acquisitions and internal growth, based on the roots put down by White Zin. As TFE is a privately held company, they do not disclose production numbers, but industry estimates put 2012 production at about 18m cases. The family also owns more than 7,000 acres (2,833 ha) of vineyards in California.

TFE has grown both by brand extension and acquisitions. Robert Nicholson of Inter­national Wine Associates, the California- based mergers and acquisitions advisory firm that specialises in wine industry transactions said Trinchero had a very good track record for acquisitions. “What they are especially good at is making an apparently modest acquisition, like Napa Cellars or Ménage a Trois, and making it move higher,” he said.

Paul Wagner, founder of Balzac Communications, a marketing and public relations firm in Napa, said the Trinchero success story has much to do with who they are. “They stayed true to the kind of people they are. They listened to consumers and make wine that consumers like,” he said. “They don’t listen to their neighbours, which is why they have a very different story to tell.” Wagner says he remembers Roger Trinchero tel­ling the ­Zinfandel story to a trade audience: “That they had made a mistake, but decided to go ahead and try to sell the wine and see if people liked it, and it exploded on the market. During his presentation, a woman from a huge wine company told me that she wished that her company would make mistakes like that. I told her that they probably did every year — but they never had the courage to take them to the market.”

Looking at the branding side of TFE’s growth, Steve Burns, a principal in O’donnell lane, a marketing and corporate imaging firm in Sonoma, said he believed the ‘cute’ names like Fancy Pants have attracted a new audience for wine that might not have tried wine otherwise. “That is obviously a good thing for the wine business,” he said.

Brand base

TFE has remained loyal to its Zinfandel roots. “Zinfandel is an important varietal for TFE.” A number of TFE brands have at least one Zinfandel in their portfolio, from Sutter Home to Sycamore Lane. “We have a diverse offering of Zinfandel options at a number of price points and regions,” said Bob Torkelson, president and COO.

That diversity of price points and regional offerings runs right through the TFE portfolio of both domestic and imports. “All of the imports have unique benefits and are successful in their own right – for example, ­Carmen Winery is certified organic and is where the ­Carmenère grape was rediscovered,” ­explained Torkelson. “With Angove, we just launched Dr. Angove, a red blend named after the founder of Angove Family Wines, whose fifth-generation family members run the winery in Adelaide.”

The TFE domestic portfolio now has more than 35 brands, and new brands seem to ­appear on a weekly basis. Prices range from under $5.00 a bottle to $100.00 for top-of-the-line Napa Cabernet. Perhaps because TFE has established strong brand identities at all price points, the lower price tier wines have not been a drag on sales at the super-premium price level. “The Napa Cab category is actually probably the strongest luxury performer in our portfolio,” said Torkelson.

A mainstay of the domestic portfolio is Moscato, for many wineries a new trend. Not for TFE. Sutter Home was selling Moscato more than half-a-century ago. They now ­offer a Pink Moscato, a Bubbly Moscato, a Bubbly­ Pink Moscato and a Red Moscato under a number of brands. “Moscato is hot, but it’s not new,” Torkelson said. “It’s very similar to White Zinfandel in that it’s approachable in flavour and price, and with its sweet flavour profiles — it’s appealing to new wine consumers who do not like dry or tannic wines. Moscato is another example of how Sutter Home was ahead of the curve.”

On-premise sales have been an important element in TFE’s growth, especially for the development of the super-premium and luxury brands, according to Torkelson. “We produce several special labels for on-premise accounts - such as Sycamore Lane, which is on-premise only, and Little Boomey for the Outback Restaurants,” he added. TFE also works closely with sommeliers on wine programs and bartenders for the TFE spirits brands. “One of the best ways to align our brands to make them more relevant with Somms and bartenders is using their unique expertise to help showcase our products,” he said. “A recent example was our BYOB ‘Blend your own Bordeaux-style wine’, with four of the classic varietal components of Bordeaux: Cabernet Sauvignon, Merlot, Petit Verdot and Cabernet Franc. In the BYOB experience, participants blend their own wines and we teach them about ‘Finesse, elegance, ­balance and complexity’ and what this really means and how winemakers achieve it.”

The TFE spirits program is another ­example of how the company is breaking out of the ‘fine wine’ mold.  TFE created a spirits division, Trinchero National Spirits (TNS) to handle the Cruz and Tres Agaves lines of premium tequila which is promoted heavily on-premise with particular emphasis on introducing women to tequila. The company has just added the Sugar Island Spiced and Coconut Rum line, which will be in national markets early in the New Year. 

A company spokesperson said the ­spi­rits line would be expanded as opportunities arise.

Seeing growth in wine

TFE is still very much in a growth mode on the wine side as well. “We expect that we will continue to grow both domestically and in the export market,” said Torkelson. ­“Regionally there are also a number of ­areas where we continue to see and follow growth trends. One is Washington State. We added Charles & Charles to our book this year and it has experienced phenomenal success,” he said. 

Another growth area is exports. “We sell a bit less than 8% of our total volume into export trade channels,” Torkelson went on. “This frames a huge opportunity for us to develop our diverse portfolio in key markets around the world. We now sell wine in over 40 countries, with our biggest markets ­being in Canada, Scandinavia and the ­Caribbean. Poland is also a growth driver for our brands.”

He is also impressed by the growing popularity of unoaked Chardonnay. “We see good growth potential there. We just launched a SeaGlass Unoaked Coastal Chardonnay, and we have seen a great consumer response to our Joel Gott Unoaked Chardonnay.” 

Asked about future moves, Torkelson said, “We will continue to keep our eye out for opportunities and strategic alliances, and we are poised for organic growth. You can definitely expect to see some additions to our portfolio.”

 

Two new brands for different audiences

Fancy Pants

Fancy Pants, one of the latest brands launched from the seemingly endless supply in the Trinchero Family brand barn, was rolled out on the national market in July. According to Nielsen figures it is one of the top five brand launches of the past 12 months. “Fancy Pants is ­targeted at Millennials, and is also a favourite with women who love the wine for girls’ nights in, book clubs, etc.,” according to Jason Hart, marketing manager for Fancy Pants. “Fancy Pants means FUN. We feel that the on-trend brand name transcends the wine category (food, fashion & pop culture) and that the stylish packaging breaks through the clutter and delivers on-brand premise. It is an approachable wine style that appeals to cocktail culture. Also, at $9.99 it is a great value/quality proposition,” he added. 

The brand was developed to appeal to the growing segment of consumers who view wine not just as a special occasion purchase, but a way to make everyday occasions a little more ‘fancy’. The national launch, following a limited run at Target, a national retail chain, includes a 2011 Red Blend and a 2012 Pinot Grigio – two varietals which are driving growth in the $7.00 to $10.00 price segment.

Even with limited distribution, Fancy Pants generated a high response, especially among the Millennial female wine consumer, as shown by both sales velocity and ­resulting social media buzz, according to Hart.  Fancy Pants red is a blend of Zinfandel, Cabernet Sauvignon and Merlot from California vineyards, as is the Pinot Grigio.

Shortly after Fancy Pants arrived on the national stage, TFE launched Charles & Charles, a Washington State Chardonnay, developed by Charles Bieler and Charles Smith. Bieler had worked with TFE ­pre­viously on the Three Thieves project with Joel Gott. Smith is the owner and head of ­winemaking for K Vintners and Charles Smith Wines, which have become underground cult wines in Washington. 

Bieler described the Chardonnay as being “at the crossroads where power meets finesse”. Smith said the wine, which is priced at $12.00, “shows the amazing potential for world class Chardonnay in Washington State”.

The launch of these two brands almost ­simultaneously, one owned by TFE, raises the question of how the decision is made to bring a new product to market. Does the market determine the brand or is the decision wine-based?

Torkelson had a ready answer: ­“Both. Sometimes we create a brand ­because of consumer demand in a category, like Sugar Island Spiced and Coconut Rums or Fancy Pants wines. Sometimes an opportunity to form an alliance with an amazing wine brand like Charles & Charles comes along and we know it’s going to be a great addition.”

 

Shatter

Shatter, launched in April 2012, is a collaboration between TFE and Napa winemakers Dave Phinney of Orin Swift Wines and Joel Gott of Joel Gott Wines. Nobody is going to confuse this wine with Fancy Pants. It’s a 100% Grenache from Maury in France’s Roussillon region, made in a take-no-prisoners style. The wine is inky black. The 2011 vintage is a California-style blockbuster that reaches 15.9% alcohol.

The name is a nod to the extreme viticultural­ conditions in the region, which can lead to a condition called ‘coulure’ in French, or ‘shatter’ in English. Extreme heat, high winds and soil deficiencies during flowering in the spring can cause the flower to fall from the cluster, or shatter, drastically cutting the size of the crop. However, the smaller crop can also lead to an increased intensity of flavour. 

Phinney first became intrigued with the Maury region in 2008. Urged by Phinney, Gott ­visited Maury in 2010 and was amazed. Traditionally, Maury has been known for its sweet wines, although that was changing ­before the arrival of the Californians, but Phinney and Gott both saw the opportunity to make a Grenache far removed from the Californian style.

It looks like TFE may have caught the Grenache trend at just the right moment. Wri­ting in the San Francisco Chronicle about the rise of Grenache in California, Jon Bonné said: “The latest specimens from California and the Northwest are, at their best, downright lovely. They display the variety’s innately charming berry flavours with a bit less swagger.”

Bob Torkelson agrees. “It is a hot category,” he said in a recent interview with Tasting ­Panel magazine. “At the retail level, it’s growing at nine times the rate of total table wine,” he said, referring to Nielsen tracking numbers. Torkelson said Shatter, priced at just under $30.00, is a luxury wine that could appeal to sommeliers and wine connoisseurs. “Small-production, unusual wines from cult-like winemakers are typically a hand sell, and we expect Shatter to do really well on-premise and in fine-wine ­retailers,” he said. 

On the winemaking side, the question comes up of how experience in California translates to France. Phinney said it was a question of adapting to the terroir there. “I ­believe you can’t have a cookie-cutter approach to winemaking anywhere,” he said. He added that he was fortunate to have introductions to the right people in Roussillon. “We ­became friends with many of the ­local vigne­rons – and remain friends still,” he said.

Phinney said he was looking at other places to make wine in France and Spain. “We are always looking at new places and new grape varietals, terroir and people. Finding cool spots to make wine and cool people to make them with is what it’s about.”
 

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