In Alex Ryan’s dozen years at the helm of Duckhorn Wine Company, the St. Helena-based producer has grown to be a top seller of luxury-tier wines, gone through two ownership changes and made its first brand acquisition.
Ryan, 51, is president and CEO of Duckhorn, whose brands include Duckhorn Vineyards, Goldeneye, Paraduxx, Migration and Decoy from the North Coast and Canvasback from Washington state. Annual production is more than 800,000 cases from two wineries in Napa Valley, two in Mendocino County and now one in San Benito County on California’s Central Coast. Vine acreage totals more than 700 acres in Sonoma and those three counties.
North Bay Business Journal will be recognizing Ryan in the Winery CEO category of the Wine Industry + Spirits & Beer Awards at an event Nov. 28.
In August, Duckhorn announced the purchase of “pinot pioneer” brand Calera, along with its winery, tasting room and 85 acres of estate vineyards about 60 miles southeast of San Jose.
“Up to that time, we had grown the waterfowl brands organically and then with line extensions from those brands,” Ryan said.
The Duckhorn portfolio is now topping sales of luxury-tier wines tracked by research firm IRI, a category that starts with retail prices of $20 a bottle. It’s a segment of the wine market that has become more accepted and mainstream, seen by its acceptance by major chain accounts such as restaurants and grocery stores, Ryan said.
“Luxury 10–15 years ago didn’t have quite the footing it does now,” he said.
What’s bode well for the North Coast wine business is consumers have made it known they want luxury products made available in more and convenience locations, Ryan said.
“Now, grocery stores and wine stores have professionals on the floor to help consumers,” he said. “In the old days, it was a game of cat and mouse. What does the consumer think he wants and what does he know, and what does the wine guy want to sell him? Now, you have really educated consumers and professionals helping them. It’s the best of both worlds.”
Consumers’ “trading up” to finer wines has been a boon to the North Coast wine business since the late 1990s. That encountered brief pauses for the economic recessions of 2001 and 2007–2008, but has accelerated since then. With Duckhorn’s focus from the outset on luxury brands, its sales have been propelling but the continued “premiumization” of consumer tastes, rising by more 20 percent in each of the past several years.
“We’re a growth luxury company of scale,” Ryan said. “There are very few of them out there.”
Fine wine remains a relationship business of follow-through and reliability, not only in wine style and consistency but also in plans, commitments and programs, he said. So the company has invested heavily in a salesforce that keeps on top of customer needs and wants.
To expand production of high-end wine calls for a complex blend of art and science, Ryan said.
“As long as your business model understands the precepts of what makes a luxury-driven wine company work, you can blend the two,” Ryan said. “Once you lose sight of that and start cutting corners and deciding that, maybe, the consumer won’t miss this element in some special wine, then you’ve started an unfortunate spiral.”
That includes investment in winemakers, barrels and vineyards through some blend of ownership and contracts with outside growers. That’s something the owners of Duckhorn have understood and allowed management to execute successfully, Ryan said.
After joining the company in 1981, Ryan was appointed president by founder Dan Duckhorn in 2005. Private-equity firm GI Partners acquired Duckhorn two years later. Last year, another private-equity firm, TSG Consumer Partners of San Francisco, became the new owner.
Jeff Quackenbush (firstname.lastname@example.org, 707-521-4256) covers the wine business and real estate.