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Marketing Riesling

Marketing Riesling. Chateau Ste. Michelle Case Study NY Wine Industry Workshop April 3-5, 2002. Erik Olsen Head Winemaker.

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Marketing Riesling

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  1. Marketing Riesling Chateau Ste. Michelle Case Study NY Wine Industry Workshop April 3-5, 2002

  2. Erik OlsenHead Winemaker Erik Olsen was raised in Davis, California and received his B.S. from the University of California, Davis in Fermentation Science. In 1990, Erik received his M.S. degree from Cornell University working under Dr. Thomas Henick-Kling. He then worked as an Enologist at Simi Winery and since 1993 has worked as a Winemaker at Chateau St. Michelle, where he is responsible for all white wine production and the Artist Series Meritage Red Wine. In 1998, Erik completed a M.B.A. degree at the University of Washington.

  3. Chateau Ste. Michelle Case Study Background • Washington wines/Chateau Ste. Michelle first earned world-wide recognition for Riesling. • Significant vineyard plantings in Riesling • Significant share of brand case sales in Riesling • #1 750 ml Riesling in America

  4. Chateau Ste. Michelle Case Study • CSM Riesling products: • Dry Riesling • Johannisberg Riesling • White Riesling • Late Harvest White Riesling • Ice Wines (1978 and 1995 vintages) • 200k+ cs mid-dry $5-$8 “85-88” avg. ratings • 2k+ cs Late Harvest $20 “93” avg. ratings

  5. Chateau Ste. Michelle Case Study Objectives in 1997: • Elevate Riesling image • Elevate quality ratings on dry/mid -dry styles • Elevate price points/profitability

  6. Chateau Ste. Michelle Case Study Strategies • Develop Cross Functional TQM Team • Define Vision, Mission, Issues, Ideas, Actions • Make the highest rated American Riesling • Sell more Riesling at higher prices

  7. Vision • Domestic Riesling 4th Noble Grape in U.S. • CSM sells 20,000 cases of dry/medium Riesling at $20 or more with scores of 93+ • Remaining Rieslings sell for $9+ with scores consistently 89-90

  8. Benchmarking • Alsace • Mosel • Rheingau • Australia • US

  9. Riesling Score Analysis • 321 wines rated >90, only 4 were from US. • Most US Rieslings rated 80-87; <$10. • Most Rieslings rated >90, are priced over $20. • Most >90 Dry Rieslings are from Alsace; >$20.

  10. Riesling Key Word Search • Flavor -minerals -flowers -honey -stone -fruit -apple • Texture -high acid -full body -full body -long finish • Color-not meaningful in descriptions.

  11. Media Input • “With the wide diversity of Riesling styles, be the best Washington Riesling you can be.” • “If anyone can make great Riesling in the US, it should be Washington.”

  12. 5 Year Strategy Long Term VintageMost Likely Vision Driven cs ScorePrice csScorePrice 1997 1200 88 $12 2400 89 $13 1998 2400 89 $12.50 5000 91 $14 1999 4800 90 $13 10,000 92 $16 2000 10,000 91 $14 20,000 93 $20

  13. Action Plan • Be the best expression of “Washington” • Identify vineyard sites that produce highest quality Riesling wines • Evaluate different viticultural techniques • Evaluate different winemaking techniques • Explore joint venture partner opportunities • Produce min of 1,200 to max of 10,000 cases of reserve quality Riesling

  14. Characterization of Riesling Vineyard Sites • Cold Creek Vineyard • highest quality • Horse Heaven Vineyard • medium quality, tart • Indian Wells Vineyard • weaker flavors and aromas • Weinbau Vineyard • Unripe fruit, low quality

  15. Vineyard Trials • Crop levels • Leaf removal • Irrigation • Grape Maturity • Hand Harvesting

  16. Viticulture Techniques • Cold Creek Leafing • prefer leafed over non-leafed • Cold Creek Thinning • prefer un-thinned over thinned • Horse Heaven Thinning • prefer thinning over un-thinned and thinning at 18 degrees brix (late) • Horse Heaven Organic • low quality wine

  17. Winemaking Trials • Yeast Strain Evaluation • Juice Treatments • Spinning Cone • Pasteurization • Sur Lie aging

  18. Winemaking Techniques • Wine Quality Improved with: • Epernay II yeast • Lower temperatures fermentation • Juice treatment with bentonite • 1% Juice solids results

  19. Reserve Quality Riesling • 100% Cold Creek Vineyard • Fermented with Epernay II • Fermentation Length = 65 days • 1,200 cases

  20. Accounts Surveyed • DELAURENTI’S • PLACE PIGALLE • SEATTLE CELLARS • PONTI • GRAPE CHOICE • CAFÉ JUANITA • McCARTHY & SCHIERING • RAY’S BOATHOUSE • PALISADE • WILD GINGER

  21. Customer Feedback... • It’s good, but it won’t sell. • Delicious wine, amazing nose - ripe ginger, ginger spice continues on the palette, tropical guava, candied apple; citrus appeal - not a seafood white … Asian food; Germanic without the mineral component. • Delicious, you guys have a chance to do something ground breaking. • Melon, apricots,good acid level, balanced, Alsatian in style, food wine, tartness in finish might not be pleasing to some.

  22. Will You Buy This? • “I’d love to sell this wine” • “Wrong image. No one wants to be drinking Riesling. Tough sell. Would require hand sell. I don’t have that kind of time”.

  23. Pricing • WHOLESALE: $9.09 - $9.79 • RESTAURANT: $24 - $26 WINE LIST • WBG @ $9.09 • RETAIL: $12.99 - $13.99

  24. Branding • Ch. Ste. Michelle: 7 • NEW Brand: 3 • Northstar: 1 • Snoqualmie: 1

  25. Position: The Grand Cru of the Pacific NW. A leader and an innovator. • Tagline: “Old world tradition, NW Innovation.” BMW

  26. 1997 Test Lot Ch.Ste. Michelle Vineyard Select Riesling • Bottle 1200 cases • CSM/Single Vineyard Package • Sell through retail shop and VRC • Evaluate consumer and trade feedback • Sell locally to key accounts as requested • Release July, 1998 • $12 Retail

  27. Recommendations for 1998 • Focus on Cold Creek Vineyard • Evaluate all SL and Grower Riesling Sites • Viticulture Trials • Winemaking Trials • Benchmarking • Ch.Ste.Michelle Cold Creek Riesling

  28. Chateau Ste. Michelle Case Study Results 1997 vintage: • 1200 cases “Vineyard Select” • $12 retail, sold from winery • 1998 vintage • 2400 cases “Cold Creek Vineyard” • $13, distribution to key markets • “88” rating

  29. 1999

  30. 1999 vintage Released June 1, 2000 2400cs $20 retail

  31. 91 PTS Top 100 ! Wine SpectatorDec 30, 2000

  32. 1999 Single Berry Select 30 Cases $200 per 375ml

  33. 97 PTS ! 1999 Single Berry Select Wine Spectator Nov. 30, 2000

  34. 2000 vintage Released May 2001 5000 cs $20 retail

  35. AGAIN 91 PTS Top 100 ! Wine SpectatorDec 30, 2001

  36. Today: The Riesling Renaissance is Here CSM Johannisberg Riesling: • Selling more than any time in its history • On allocation for last 3 years • Average retail price up $1-2 • Quality higher than ever--learning from TQM trials and work with Loosen

  37. Today Eroica : • “91/Top 100” ratings on first two vintages has created high demand, entry into prestige accounts, halo for Cold Creek Riesling & JR • 2001 production up to 10,000 cs with $20+ retail price

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