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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.

[caption id="attachment_18651" align="alignright" width="182" caption="Jesus Vega, contest winner"][/caption]

Mr. Lopez won the championship, followed by Mr. Moreno and Mr. Toledo.

Mendocino Winegrape & Wine Commission held its ninth annual pruning contest Feb. 17 at Beckstoffer Vineyards' Mendocino 101 Ranch in Talmadge.

The winner was Gabriel Navarro of Roederer Estate. Runners up were, in order, Polito Martinez of Beckstoffer Vineyards, Jorge Medina of Vimark Vineyards, Samuel Campos also of Vimark, Sergio Acevedo of Beckstoffer and Carlos Juarez of Chevalier Vineyard Management.

Fifty-six farmworkers competed for $1,300 in cash plus other prizes in Napa Valley Grapegrowers' ninth annual pruning contest. It was held Feb. 11 at Beringer Vineyards' Gamble Ranch in Yountville. The winner was Jesus Vega of Flora Springs' Komes Ranch, taking home $600, the trophy belt buckle and other awards.

Runners up, in order, were Miguel Contreras of Cardinale, Jose Alfredo Segura of Spring Mountain Vineyard and Jose Plancarte of Hall Wines.

***

Two North Coast wine industry businesses were certified under the Bay Area Green Business Program in February. Santa Rosa-based P&L Specialties, maker of winery equipment for receiving and sorting grapes, has become the third Sonoma County manufacturer to receive the "green manufacturer" certification.

J Winery & Vineyards, located between Windsor and Healdsburg, was certified as a "green winery." PG&E in January certified J as a "carbon neutral" user of energy.

***Wine People

[caption id="attachment_18652" align="alignleft" width="193" caption="Philippe Melka"][/caption]

Cliff Lede Vineyards near Yountville will bring on A-lister Philippe Melka as consulting winemaker on March 1, replacing Michelle Edwards, who resigned in January for family reasons. Robert Parker Jr. of ”The Wine Advocate" called him one of the world's nine most important winemakers for his work at Chateau Haut Brion and Chateau Petrus in Bordeaux and Dominus Estate in Napa.

For the past 15 years, Mr. Melka has been guiding winemaking for the likes of Vineyard 29, Hundred Acre, Bryant Family, Dana Estates and Gemstone Vineyard.

The winery also promoted Kale Anderson from assistant to associate winemaker.

In Dry Creek Valley, Lambert Bridge Winery named former Lancaster Estate winemaker Jennifer Higgins as associate winemaker.

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Submit items for this column to Jeff Quackenbush at jquackenbush@busjrnl.com, 707-521-4256 or fax 707-521-5292.