In a conversation with Judd Wallenbrock, CEO of C. Mondavi & Family (the parent company of Charles Krug), it is clear that he is very optimistic about the future of wine in 2021. As a 41-year veteran of the industry, he is also very optimistic about how things went for the venerable brand, which is the oldest vineyard in the Napa Valley, dating back to 1861.
I see a bright future for 2021. This is my 41st. A year in business, and it goes in circles. I’ve had my ups and downs. I am optimistic about the future of wine in general, because if the two world wars and the ban – a period of 13 years during which wine could not be drunk at all – did not kill the wine, this pandemic will certainly not!
It shows how resilient and flexible the industry is. It seems to exist in its own strange, enduring and persistent bubble, while helping us, as humans, to do the same. Wine is certainly at the heart of many stories, but it is a story in itself. What is the history of wine in 2021?
Wallenbrock remembers 2020 in California. We’ve been through so much: Earthquakes, fires, pandemics. It’s been a crazy year! I can see us going through another drought. We face many challenges, but look at the enormous effort that has been made to develop the vaccine.
When he reflects on the plight of the restaurant industry, he acknowledges the devastation it has suffered. We’re a community that likes to be outdoors. Many restaurants may be underground, but many will return and many more will open. This will provoke a reinvention.
He believes that the human mind will overcome obstacles, and this is probably the most important lesson in all of this.
Wallenbrock reminds us that wine is an affordable luxury. We might not make the trips to Europe we planned, but we still drink wine every night. We want to feel like we’re living the good life.
When asked how consumer habits changed during the pandemic, Wallenbrock notes that many older buyers dig through their cellars and discover long-forgotten treasures. They don’t buy much now, but they will. At some point, they’ll have to resupply themselves. People who buy wine turn to club shops, where the choice is somewhat limited and prices have risen sharply. And online he’s on fire. According to sources such as Nielsen, online alcohol sales in September 2020 were 256% higher than a year earlier.
One of the things that keeps Wallenbrock focused and motivated is the desire of the Mondavi family to remain independent and family-oriented, as it has always been. In doing so, she continues to learn from the past and draws on the pioneering spirit and innovative heritage of the family. This means that you know when to buy an asset and when to look for a partner.
As CEO of a winery offering high-end Bordeaux grape varieties under the Charles Krug brand ($20 to $40) and the Mondavi wine line at $6.99, the company already had several outlets. When the pandemic broke out, Wallenbrock saw an opportunity to quickly penetrate market segments in which the company was not yet represented.
We have worked with French Blue, a Bordeaux-based family business that produces rosé (Cab Franc and Merlot) and Sauvignon Blanc, both of which sell for $13 to $14. It allows us to offer our customers a variety of publications and print products, and it fits well with our history. We are a family brand, a champion for other family brands. They’ve been in Whole Foods and Cost Plus. We immediately expanded our presence in these channels with our core brands.
Wallenbrock sees the willingness to cooperate with other brands, instead of necessarily acquiring them, as a strategy to increase the market share that brands without large capital can use in 2021. Frans Blauw currently produces only 15,000 cases, but we plan to triple this number to 45,000. Heaven is the limit: Bordeaux is not a small region.
It is also considering partnerships with manufacturers in other countries and proposes to use other brands to fill other gaps in the company’s portfolio. And he’s watching: Everybody wants to be in America.
Mondavi also had some important assets that Wallenbrock knew how to exploit, and for a short period of time they produced a number of wines in the $12 to $15 range from the vineyards they cultivated in Yolo County. It’s called the Flat Top Hills brand. This brings us into the catch zone of brands that produce blends of Cabernet, Chardonnay, Sauvignon Blanc, Rose and Red. So far we’ve had nothing in this price range. Take the opportunity to expand your portfolio so you can offer more to more consumers.
Two new brands are introduced in the grocery and club circuit, but he also sees them as a perfect addition to the buying side when he returns to the room. Costco is the largest wine vendor in the United States, he notes. Don’t ignore this channel. And don’t ignore Bevmo and Whole Foods.
Another option he is considering is DTC Online, which the company collectively started in March when it became clear that it would have to close its doors. We had to adapt immediately and go into e-commerce. With Zoom we did 20 tastings a week. Train your staff to sell wine online. Targeted efforts of your wine club : Sponsor 10 to 15 friends for a private Zoom tasting where they can all enjoy your club discount on purchases.
Wallenbrock says they indeed use Zoom in the three-layer system, with tastings in country clubs and restaurants where customers are invited to taste the product and then order crates. This is proving to be very cost-effective. Another option is to organise wine tastings with large customers via the sales office, again virtually, where all participants receive wine samples in advance and can then purchase additional bottles.
Although no one really knows what will happen in 2021, Wallenbrock cannot predict the dustbin fire of 2020 any more than anyone else can. When I had my first board meeting in March, I said this sounds like bad news, but let’s attack and attack the market maker and the manufacturers.
The attack has just begun.
Read the bold predictions of industry experts.