Foster's reports 'premiumization' showing some gainsSanta Rosa-based Vintage Wine Estates, a growing portfolio of wine operations including Windsor Vineyards and Girard Winery, last week purchased a minority stake in Kunde Family Estate winery in Kenwood.
The value of the deal wasn't disclosed. However, it didn't include the 1,850-acre winery estate and its 700 acres of vines, which the Kunde family continues to own.
The deal makes Vintage managing partner in the winery, but the family will still be involved with the operation and continue to make the family brand, according to Pat Roney, a partner in Vintage with Leslie Rudd, founder of gourmet grocer Dean & DeLuca.
"It will create efficiencies in sales and marketing," Mr. Roney said.
The deal with Kunde gives Vintage potential for excess bottling capacity and a retail venue on Sonoma Highway. The use permit for the Kenwood winery allows bottling of 200,000 cases of wine a year. Current production of the Kunde brand is 100,000 cases, according to Mr. Roney.
W.J. Deutsche & Sons of New York handles marketing for the Kunde brand, but Vintage also will offer marketing support, he said.
Vintage Wine Estates acquired direct-to-consumer telemarketing capabilities with the acquisition of Windsor Vineyards along with International Wine Accessories from Foster's Group in 2007.
To that has been added production of private-label wines for undisclosed retailers and some co-packing for client brands, according to Mr. Roney. The company also has acquired several North Coast boutique wineries and brands and is creating one called Windsor Sonoma.
Mr. Roney's relationship with the family started nearly 20 years ago. From 1992 to 1994, he was chief executive officer of the winery, which opened in 1990.
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Australia-based beer and wine producer Foster's Group last week reported encouraging growth in higher-priced wine sales in the company's second quarter, which equates to the last three months of 2009.
That's good news amid challenging financial results for the period. Volume sales of wine decreased just 3 percent year-over-year to 19.2 million 9-liter cases, but wine sales in the Americas dipped just 0.2 percent to 9.4 million cases in that timeframe. Net sales revenue in the Americas fell by 16.3 percent in the first half and gross earnings by 62 percent. When currency exchange rate fluctuations are considered, the decreases improve to 7 percent and 45 percent, respectively.
"Premiumization is gradually gaining traction in the U.S., with our brands priced above the critical $10 demarcation line growing plus 2.2 percent in the second quarter, reversing losses in six prior quarters," said Stephen Brauer, managing director of Foster's Americas, during a Feb. 16 briefing on financial results.
Inventory depletions for Foster's wines in the price bracket had been down 9.8 percent year-over-year in the fiscal first quarter and off by 6.4 percent for fiscal 2009.
Leading December premium-price growth were $19-plus brands Beringer Knights Valley, depletions of which increased 3 percent from the same period in 2008; Stag's Leap, 15 percent; St. Clement, 18 percent; and Penfolds Bins, 24 percent.
In the investor briefing, company executives said the company plans to invest more in core labels and continue to "premiumize" brands and revamp its luxury portfolio, including the brands Stag's Leap Winery, St. Clement and Etude.
That said, the fiscal first half results showed the impact of the global economic recession.
In addition to adjusting distribution agreements, Foster's Americas plans to invest more in its core volume wine brands, including new "brand architecture" for Beringer in Napa Valley and Chateau St. Jean in Kenwood to avoid consumer confusion between them.
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[caption id="attachment_18649" align="alignright" width="288" caption="Winners of Napa Valley Grapegrowers' 2010 pruning contest were (by placement) Jesus Vega, Miguel Contreras, Jose Alfredo Segura and Jose Plancarte. All photos: Napa Valley Grapegrowers"][/caption]
It's the season for pruning grapevines and recognizing the job's fastest and most precise professionals.
Winners of winegrowing region contests faced each other in the Sonoma County Winegrape Commission's 11th annual pruning championship on Feb. 19 at Santa Rosa Junior College's Shone Farm near Forestville. A total of $1,000 in prizes were awarded to the top four pruners.
Regional finalists, in order of placing, were from Russian River Valley, Gustavo Rico of Seghesio Farms and Javier Lopez of Valdez & Sons Vineyard Management; from Sonoma Valley, Alberto Avina of Chateau St. Jean, part of Foster's Wine Estates Americas, and Justino Ornelas of Kunde Family Estate's Wildwood Vineyards; from Dry Creek Valley, Jaime Castro of Seghesio Farms and Francisco Toledo of Clendenen Vineyard Management; from Alexander Valley, Salvador Gomez of Jackson Family Wines' Stonestreet Winery and Clemente Martinez of Munselle Vineyards; and from Knights Valley, Leobardo Lopez of Clendenen Vineyard Management and Salvador Gutierrez Valencia of VinePro Vineyard Management.
