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O’Neill Vintners & Distillers’ Branded Business On A Rapid Rise To 1 Million Cases O’Neill Vintners & Distillers has invested about $140 million in its Parlier, California-based winery over the past eight years, and currently produces approximately 7 million cases annually. While the company continues to be a large bulk wine producer, it has sharpened its focus on its branded portfolio in recent years. Overall, O’Neill’s brand stable is projected to near 1 million cases this year, led by Impact “Hot Brand” Line 39. “We’ve been able to grow at about 30% annually the last few years,” founder and CEO Jeff O’Neill tells SND. “We’re trying to stay laser-focused on what’s important to the consumer.” Last year, Line 39, which includes a number of varietals retailing at around $10 a 750-ml., jumped 20% to 487,000 cases, according to Impact Databank. This year, the brand is projected to approach 600,000 cases. Christine Moll, who joined O’Neill as vice president of marketing about a year ago after previously serving with Campari and Bacardi, says the launch of an augmented reality app has helped contribute to Line 39’s momentum. “Line 39 is inspired by the 39th parallel, so our whole platform is around exploration and travel,” Moll explains. “This year we launched an AR app that takes consumers to different destinations along that parallel. It also allows us to continue connecting with the audience over time and provide them special offers.”
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Slightly higher up the price ladder, O’Neill recently partnered with former NFL star Charles Woodson on a new brand called Intercept, which is positioned at $18 and initially includes a 2016 Cabernet Sauvignon, a 2017 red blend, a 2018 Chardonnay, and a 2017 Pinot Noir, all sourced from Paso Robles except for the Pinot, which is from Monterey. Elsewhere in the portfolio, O’Neill’s Harken label, a 100% barrel fermented Chardonnay retailing at $14, is projected to hit 80,000 cases by the end of the year. Harken has been enjoying solid gains in the on-premise casual dining segment, Moll notes, where it sells at around $9-$11 by the glass. About 40% of Harken’s sales are now derived on-premise. Meanwhile, Robert Hall, a brand acquired along with a 200,000-case winery in Paso Robles in 2016, is currently at about 50,000 cases. More recent additions to the range include Day Owl Rosé ($15) and Exitus ($20), a Bourbon barrel-aged red blend. O’Neill has been ramping up its sales team as the branded portfolio takes on more importance for the business. The company’s national salesforce now numbers about 40 people, roughly doubling in size over the past two years. O’Neill is also making strides on the sustainability front, setting a goal for its entire 160-grower network to be certified sustainable by the end of next year. Wine Spectator: Wildfire Update Many of the tens of thousands of evacuated residents of Sonoma County got word that they could return home yesterday following the wildfires that have swept through the region. Sheriff Mark Essick lifted the mandatory evacuation order for much of the county. At 4 p.m. local time yesterday, the National Weather Service lifted the warning of critical fire weather for the North San Francisco Bay region. Local utility PG&E has begun restoring service, though 70,000 homes and businesses remain without power. Wine Spectator has the full story. Molson Coors Looks “Beyond Beer” With New Turnaround Plan Molson Coors president and CEO Gavin Hattersley has unveiled a new “revitalization plan” aimed at improving performance at the company, which posted net sales down 2% to $2.8 billion and EBITDA down 5.6% to $703 million for its third quarter ended in September. Among Hattersley’s key objectives is to pursue growth in above-premium labels while diversifying into new product categories—such as recently launched Movo canned wine spritzers and La Colombe Hard Cold Brew Coffee—and evaluating potential bolt-on acquisitions. In line with that move, the company will now be known as Molson Coors Beverage Co., reflecting its widening scope. Meanwhile, Molson Coors plans to invest several hundred million dollars to modernize its Golden, Colorado brewery, and simplify its corporate structure by consolidating down to two operating regions—North America and Europe—with its North America headquarters based in Chicago. The restructure will see Molson Coors shed 400-500 employees, close its Denver office, and retire the MillerCoors corporate moniker in the U.S.
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News Briefs: •Ste. Michelle Wine Estates posted net revenue down 1.2% to $483 million for the nine months through September, representing the first three quarters of its fiscal year, as operating income fell 32% to $50 million. Volume was roughly flat at 5.9 million cases year-on-year. Ste. Michelle said higher promotional investments and higher costs have been eating into earnings. Earlier this year, Ste. Michelle president and CEO Jim Mortensen told SND the company has been making “substantial investments in consumer engagement,” adding, “We have a trade marketing group and a category management group, both of which have kicked into high gear.” •Sotheby’s has launched an Own Label Collection of wines. Currently available at Sotheby’s flagship wine retail store on York Avenue in New York and on its e-commerce platform, the range includes a Champagne, Prosecco, Sancerre Blanc and Rosé, Bourgogne Blanc and Rouge, Sonoma County Chardonnay, Sonoma Coast Pinot Noir, Langhe Nebbiolo, St. Emilion, Pessac-Léognan, and Haut Médoc, with retail prices ranging from $17-$40. Sotheby’s launched its wine retail business in 2010 and has locations in New York and Hong Kong. •Dwayne “The Rock” Johnson is prepping a Tequila launch for the new year. Johnson’s Teremana Tequila label, founded in partnership with drinks industry veteran Ken Austin, is slated to debut in early 2020. Johnson noted in an Instagram post that Teremana would be a “small-batch, hand-crafted Tequila.” A brand representative declined to provide further detail. Previously, Austin worked with the Productos Finos de Agave S.A. distillery to launch the Avión label, which Pernod Ricard eventually acquired in a two-part deal reportedly worth more than $100 million. Along with mixed martial arts fighter Conor McGregor, Austin is also a co-founder of the Proper No. Twelve Irish whiskey brand, which is distributed by Proximo Spirits. Craft Brewing And Distilling News: •The Boston Beer Company’s net revenue was up 23.3% to $378.5 million in its fiscal third quarter through September, with shipments rising by nearly 22% and depletions up 21% over the comparable 39-week period in the previous year. Boston Beer’s purchase of Milton, Delaware-based Dogfish Head earlier this year contributed to sales growth, the company noted. Boston Beer president and CEO Dave Burwick also pointed to Truly Hard Seltzer—up triple-digits by volume—and Twisted Tea as the primary growth engines for the company in recent months. Recently in the News: | |
