By Laura Ness
It’s apparent in speaking with Judd Wallenbrock, CEO of C. Mondavi & Family (parent company to Charles Krug), that he is highly optimistic about the future of wine in 2021. A 41-year veteran of the industry, he’s also pretty bullish on the way things have gone thus for the venerable brand that is Napa Valley’s oldest winery, dating back to 1861.
“I see a bright future for 2021. This is my 41st year in the business, and everything goes in cycles. I’ve seen all the ups and downs. I’m optimistic about the future of wine in general because, gosh, if two World Wars and Prohibition—a 13-year period in which you weren’t supposed to drink at all—didn’t kill wine, this pandemic surely isn’t going to, either!”
He points to how resilient and adaptive the industry has been. It seems to exist in its own weird bubble, enduring and persevering, as it helps us as humans to do the same. Wine most assuredly is at the heart of many stories, but it is, in itself, a story. What plotline does 2021 have in store for wine?
Wallenbrock reflects back on 2020 in California. “We’ve been through so much: earthquakes, fires, pandemic. It’s been a wild year! I see us going into another drought. We’ve had many difficulties, but look at the huge effort that went into coming up with a vaccine.”
Reflecting on the plight of the restaurant industry, he acknowledges the devastation that has been wreaked upon it. “We are a society that likes to go out. Many restaurants may go under, but many will come back, and many more will open. It will spark reinvention.”
He has faith in the human spirit to overcome obstacles, and that is probably the most important lesson in all of this.
Wallenbrock reminds us that wine is an affordable luxury. “We may not be taking those trips to Europe that we planned, but we are still drinking wine every night. We want to feel like we’re living the good life.”
Asked how consumer buying habits have changed during the pandemic, Wallenbrock observes that many older customers are drinking their cellars, discovering long overlooked treasures. “They’re not buying a lot right now, but they will be. They will eventually need to restock. People who are buying wine have been turning to Club stores, where the selection is somewhat limited and the prices have gone up quite a bit. And online is on fire.” Sources like Nielsen indicate that online alcohol sales were up 256% in September of 2020, compared to last year.
One of the things that keeps Wallenbrock highly focused and motivated, is the Mondavi family’s desire to remain independent and family owned and operated, just as it has always been. To do so, he continually draws on the lessons of the past, taking inspiration from the family’s pioneering spirit and heritage of innovation. This means knowing when to acquire an asset outright and when to pursue a partnership instead.
As CEO of a wine company offering high-end Bordeaux varieties under the Charles Krug label ($20—$40), and a series of CK Mondavi value wines priced at $6.99, the company already had diverse price points. When the pandemic hit, Wallenbrock saw it as an opportunity to move quickly into market segments in which the company was not already present.
“We partnered with French Blue, a family-owned French company located in Bordeaux that produces a rosé (of Cab Franc and Merlot) and a Sauvignon Blanc, both priced between $13—$14. This allows us to bring different pricepoints and products to our consumers, and it fits well within our story. We’re a family brand championing other family-owned brands. They were already in Whole Foods and Cost Plus. We immediately grew our presence with our core brands in these channels.”
Being willing to partner with and not necessarily acquire other brands is something Wallenbrock sees as a marketshare expansion strategy that brands without a huge cache of capital can leverage in 2021. “French Blue produces only 15K cases right now, but we plan to triple it to 45K cases. The sky’s the limit: Bordeaux is not a small area.”
They are also looking at forging partnerships with producers in other countries, hinting at additional brands being brought in to fill other “opportunity gaps” in the company’s portfolio. And, he observes, “Everybody wants to be in the US.”
Mondavi also had some critical assets that Wallenbrock knew could be leveraged, and in a short amount of time, they were producing a series of wines in the $12—$15 range from a vineyard property they owned in Yolo County. It’s called the Flat Top Hills brand. “This puts us into that ‘fighter area’ of brands in the broad market that produce Cabernet, Chardonnay, Sauvignon Blanc, rose and red blends. Until now, we had nothing in that price category.” Use this opportunity to add to your portfolio so you have more to offer more consumers.
As of now, the two new brands are going into grocery stores and into the Club channel, but he also sees them as being a perfect fit for by-the-glass when on premise returns. “Costco is the biggest wine seller in the US,” he notes. Don’t ignore this channel. And don’t ignore BevMo and Whole Foods, either.
Another opportunity he sees is for online DTC, something the company collectively jumped on in March, when it was clear they had to close their doors. “We immediately had to up our ante and adapt, and get our e-commerce going. We used Zoom to conduct 20 tastings per week.” Train your staff on how to sell wine online. Prioritize efforts to your wine club: incent them to recruit 10 to 15 friends for a private Zoom tasting where they can all enjoy your club discount for purchases.
Wallenbrock says they are actually using Zoom throughout the 3-tier system, doing tastings with country clubs and restaurants, where clients are invited to taste and then order cases of product. This is proving quite lucrative. Another avenue is using the sales force to set up wine tasting parties with larger clients, again virtually, where all participants are sent wine in advance to taste, and then can purchase additional bottles.
While nobody really knows what will happen in 2021, anymore than you could have predicted the dumpster fire of 2020, but Wallenbrock is not hesitating to charge forward. “When I had my first executive team meeting in March, I said, ‘this sounds like bad news, but let’s attack and go after marketshare and mindshare.’”
The attack has just begun.
Read more Bold Predictions from industry experts.