Napa Valley-based Duckhorn Wine Company makes ultrapremium and luxury brands Decoy, Duckhorn, Goldeneye, Paraduxx, Migration, Canvasback from Washington state and Calera from the California Central Coast.
The company owns or leases 800 acres of vineyards and produces over 800,000 cases a year.
In 1981, Alex Ryan came to Duckhorn and worked his way up to president and CEO in 2005. Private-equity firm GI Partners acquired Duckhorn two years later. In 2016, another private-equity firm, TSG Consumer Partners of San Francisco, became the new owner.
On the "hot topics" panel at the Business Journal's Wine Industry Conference on Thursday, Ryan talked with the Journal about the forces propelling and hindering the business, including the challenge of marketing to the next generation and the prickly matter of whether it's economical for the industry to operate in Napa County with new regulations this year on use permits and vineyards in watershed areas.
What are the biggest trends for luxury wine, especially in the North Coast?
The cannabis trend as it relates to the wine or the wine consumer, Duckhorn is gonna stay away from that. I don’t want to mix cannabis and THC with alcohol. It exists out there, and it might be a consumer trend, but it won’t be any part of our company.
The most exciting trend will be a function of economics at some level: new, underappreciated, unknown appellations and winegrowing regions that, honestly, compared to California, compared to Napa, produce really interesting wines at really quite value prices against Napa Valley.
I call it the craft beer craze. The West Coast of the United States is producing so many great wines from many small, underappreciated or just under-understood appellations. They’re going to gain more favor, if you assume Napa and Sonoma are pretty expensive.
The other trend is the resident-industry interface issues that we have to deal with here in Napa and Sonoma counties. The experiential need for the consumer to continue to get closer to and get involved with their favorite vintners is going to grow: demands on local vendors to produce experiential marketing tools, experiences at the wineries, customer engagement, and all those things that come along with that.
That’s a function of the way the business moves and intersecting with the new crop of consumers: the millennials and the Generation X. These people want experiences and their wine — not just the wine. That will demand new marketing, sales marketing techniques.
What sales and marketing innovations has Duckhorn implemented to tap further into that trend?
Integrating your digital experience is key. You’ve got to be able to talk to your consumer the way they want to be talked to: interactive, fancy, real-time digital experiences. Whether it’s on your iPad, phone or computer or however you touch digital, integrating those with our somewhat traditional, boring brick-and-mortar business is key. Those innovations happen quickly these days.
Make sure you have all the right visual content that excites people — pictures and videos. Make sure your social sites are up to the demands of the consumer. These are fast-moving, ever-evolving issues. Tying digital in with the real-world experience is where we’re gonna put a lot of our focus.
What have you noticed in shifting demographics for your brands?
I don’t have it broken down with any good numbers. We believe our customer base is shifting from baby boomers. Baby boomers are aging, they (have) got a lot of money, they’ve got full cellars, they're probably not buying as much.
Wine business insights
These key players on the California North and Central coasts and in Oregon talk about what’s coming for the industry and layout of the marketplace now.
David Duncan, proprietor, chairman and CEO, Silver Oaks Cellars
Corey Beck, CEO and winemaking chief, Francis Ford Coppola Winery
Bob Torkelson, president and CEO, Trinchero Family Estates
Alex Ryan, president and CEO, Duckhorn Wine Company
Dan Baker, executive vice president, Korbel
Michelle Benvenuto, executive director, Winegrowers of Napa County
Ron Denner, Denner Vineyards
Cam Baker, proprietor, Larkmead Vineyards
Tom Bonomi, president and CEO, Price Family Vineyards & Winery
Steven W. Spadarotto, Far Niente Wine Estates
Sarah House, director and senior economist, Wells Fargo
They are set to speak at North Bay Business Journal’s Wine Industry Conference in Santa Rosa on April 18.