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Downtown California Wine Country tasting rooms help rural vintners get noticed

JEFF QUACKENBUSH

NORTH BAY BUSINESS JOURNAL | February 25, 2019

A recent report on the health of the premium wine business raised eyebrows with survey results that suggest smaller-scale vintners that have been relying on tasting rooms and clubs to drive direct-to-consumer sales growth should rethink that strategy.

The number of visitors to given tasting rooms has decreased over the past five years in Napa and Sonoma counties and in Washington state, while traffic per venue is up in emerging premium wine regions such as Oregon, Virginia and New York, according to surveys conducted for Silicon Valley Bank’s State of the Wine Industry report, the most recent one was released in January.

The report notes that tourism visitations is up in Wine Country, changing demographics toward fewer but longer winery stops per trip for older consumers and budget-minded ventures by younger consumers.

This also comes at a time when popular destination downtowns of Sonoma, Healdsburg and Napa have considered or taken action to limit new venues after a string of openings in the past decade.

With this backdrop, the Business Journal takes an inside look at why two rural North Coast wineries that have planted tasting rooms in a one of the region’s more popular tourism destinations and how that is faring.

Don Hartford and Jenny Hartford-Jackson started Hartford Family Winery near the western Sonoma County community of Forestville in 1994 and in 2015 opened a second tasting room, located on Healdsburg Avenue just north of Hotel Healdsburg and in the downtown plaza shopping district.

The main reason for the second location is the isolation of the Forestville and the winery site, located off Martinelli Road south of the popular Russian River Valley wine region, according to Becky Craig, estate manager.

“There are a few wineries around Forestville now, but there were not many for a long time,” she said.

Those who do visit the winery are “qualified traffic,” meaning they ventured there on the recommendation of a critic, friend, restaurant worker or existing member of the winery club.

“When they get to the door, they are excited to taste our wine,” Craig said. “In downtown Healdsburg, we have the opportunity to reach customer who have not head of us or are not willing to drive all the way out. You get hotel traffic, which is great because they are excited to be in the area but may not know where to go.”

As Craig found out working at other tasting rooms around the Healdsburg plaza, referrals from hotels are a key way to drive traffic to the venue. While delayed completion of construction of the Healdsburg Avenue roundabout made it challenging for visitors to get to the plaza and find parking over two years, the hub was reopened last year, in time for the arrival of new downtown hotels, Craig said. Among the local lodging guests happening into the Hartford venue on a Sunday afternoon in February was Joe Onorato. He was staying at Hotel Healdsburg next door.

“I came here after visiting a couple other wineries today,” he said.

Because of space limitations at the downtown site, Hartford’s tasting experience aims to give visitors a flavor of what they can find at the estate, Craig said. A wall-mounted flat-screen television in the salon shows looped video scenes from the Forestville property.

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“Every tasting room downtown wants to convey that they are indeed a winery,” Craig said. “At the end of the day, we’re a storefront, and communicating there is more to see is easier to do at the estate, where there’s the backdrop of the vineyards and winery.”

The Hartford tasting fee is $15 for four chardonnay, pinot noir and zinfandel wines, with the fee waived on the purchase of a bottle. Tasting at the winery costs $25 for six wines served at a table and features six single-vineyard pinot noir wines, and sampling select wines from the library costs $45 a person.

Onorato said he has taken the opportunity to visit multiple wineries on past outings via “passport” promotional programs for discounting tasting experiences. But Hartford doesn’t participate in such programs because the target audience isn’t a good fit for its $75-a-bottle wines and the estate site’s limited number of events per year under its county use permit, Craig said.

What the Forestville winery has discovered since operating the Healdsburg location is that it can be an overflow for events that have maxed out permitted capacity at the estate and allows a more convenient pickup point for club members, according to Craig.

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Two doors down from Hartford’s Healdsburg venue is Stonestreet Estate Vineyards. It opened there in 2013, taking over a space that had been used as a sampling site for the Kendall-Jackson brand, which like Stonestreet is owned by Santa Rosa-based Jackson Family Wines. In 1995, company proprietor Barbara Banke and the late Jess Stonestreet Jackson, also Hartford-Jackson’s father, acquired the 5,500-acre Stonestreet property on the slopes of the Mayacama range that marks the eastern edge of the Alexander Valley winegrowing region. The brand’s original tasting room opened at the estate, located off Highway 128, a decade later.

Part of the motivation for expanding the Stonestreet marketing reach beyond the estate was to reach both brand lovers and those who hadn’t heard of it, according to Michelle Davis, direct-to-consumer sales and operations manager.

“It was a natural avenue for seeing new customers, people who were in downtown for other reasons — for family — and not necessarily necessarily for wine excursions to the surrounding valleys,” she said.

While the estate, with its views of Alexander Valley, appeals to those with specific Wine County destinations in mind, the downtown venue is tailored to shoppers, Davis said.

“Downtown, people are generally visiting a few tasting rooms around the square or coming in before a dinner reservation to enjoy a splash of wine,” she said. “We tend to see more individuals downtown who prefer to pay the tasting fee rather than purchase the minimum number of bottles to waive the cost of the flight. They want to experience what’s out there.”

The purchase value per visitor is higher at the estate because collectors predominate and the focus is on single-vineyard wines, which retail for $35-$150 a bottle, according to Davis. The goal for Stonestreet’s downtown team is to educate browsers about the brand and plant seeds in their minds for a later harvest of sales when the estate-tier wines ($35-$45 suggested retail) are seen on the retail store shelf, Davis said.

So the downtown space is configured like a typical wine-tasting bar, with a tasting fee of $15 a person, and that’s waived after wine purchases of over $30. But because of the destination approach for the estate, almost all the tastings are conducted with guests seated with a host. That experience starts at $40 a person, going up to $75 each for trying select wines from past vintages and $150-$200 for a "mountain excursion tour and tasting.

Since fine-wine sales slowdown just after the dot-com-led recession in 2001, tasting-room consultants have been clinking the proverbial glass to convince more vintners to establish connections with future consumers at the tasting room. Two key pieces of information commonly sought to keep the love alive between winery and visitor are email addresses and increasingly phone numbers, which can be used by in-house or contract outbound sales teams to cultivate the curious into the serious and reconnect with the disenchanted.

Depending on how enthralled those who visit Stonestreet’s venue are with the wine, they are offered increasing levels of connection. It employs two tools commonly used by premium vintners: the mailing list and the wine club. But to appeal to those who like a particular wine but don’t want multiple bottles twice a year in the club, Stonestreet offers an “auto-allocation” of its single-vineyard series wines, going out once a year. The winery makes only 200 to 500 cases annually for each wine that series, while 1,000 to 5,000 cases are made each year for each estate-tier wine.

“Not everyone is up to having shipments sent to their door several times a year, so it is important to have options available to suit varying guest needs,” Davis said.

Jeff Quackenbush covers wine, construction and real estate. Contact him at jquackenbush@busjrnl.com or 707-521-4256.