Marketing Riesling
Chateau Ste. Michelle
Case Study
NY Wine Industry Workshop
April 3-5, 2002
Erik Olsen
Head Winemaker
Erik Olsen was raised in Davis, California and received his
B.S. from the University of California, Davis in
Fermentation Science. In 1990, Erik received his M.S.
degree from Cornell University working under Dr. Thomas
Henick-Kling. He then worked as an Enologist at Simi
Winery and since 1993 has worked as a Winemaker at
Chateau St. Michelle, where he is responsible for all white
wine production and the Artist Series Meritage Red Wine.
In 1998, Erik completed a M.B.A. degree at the University
of Washington.
Chateau Ste. Michelle Case Study
Background
• Washington wines/Chateau Ste. Michelle first
earned world-wide recognition for Riesling.
• Significant vineyard plantings in Riesling
• Significant share of brand case sales in Riesling
• #1 750 ml Riesling in America
Chateau Ste. Michelle Case Study
• CSM Riesling products:
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Dry Riesling
Johannisberg Riesling
White Riesling
Late Harvest White Riesling
Ice Wines (1978 and 1995 vintages)
• 200k+ cs mid-dry
• 2k+ cs Late Harvest
$5-$8 “85-88” avg. ratings
$20 “93” avg. ratings
Chateau Ste. Michelle Case Study
Objectives in 1997:
• Elevate Riesling image
• Elevate quality ratings on dry/mid -dry styles
• Elevate price points/profitability
Chateau Ste. Michelle Case Study
Strategies
• Develop Cross Functional TQM Team
– Define Vision, Mission, Issues, Ideas, Actions
• Make the highest rated American Riesling
• Sell more Riesling at higher prices
Vision
• Domestic Riesling 4th Noble Grape in U.S.
• CSM sells 20,000 cases of dry/medium
Riesling at $20 or more with scores of 93+
• Remaining Rieslings sell for $9+ with
scores consistently 89-90
Benchmarking
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Alsace
Mosel
Rheingau
Australia
US
Riesling Score Analysis
• 321 wines rated >90, only 4 were from US.
• Most US Rieslings rated 80-87; <$10.
• Most Rieslings rated >90, are priced over
$20.
• Most >90 Dry Rieslings are from Alsace;
>$20.
Riesling Key Word Search
• Flavor
-minerals
-flowers
-honey
-stone
-fruit
-apple
• Texture
-high acid
-full body
-full body
-long finish
• Color
-not meaningful in descriptions.
Media Input
• “With the wide diversity of Riesling styles,
be the best Washington Riesling you can
be.”
• “If anyone can make great Riesling in the
US, it should be Washington.”
5 Year Strategy Long Term
Vintage
1997
1998
1999
2000
Most Likely
cs Score Price
1200
88
$12
2400 89
$12.50
4800
90
$13
10,000 91
$14
Vision Driven
cs Score Price
2400 89 $13
5000 91 $14
10,000 92 $16
20,000 93 $20
Action Plan
• Be the best expression of “Washington”
• Identify vineyard sites that produce highest
quality Riesling wines
• Evaluate different viticultural techniques
• Evaluate different winemaking techniques
• Explore joint venture partner opportunities
• Produce min of 1,200 to max of 10,000
cases of reserve quality Riesling
Characterization of Riesling
Vineyard Sites
• Cold Creek Vineyard
– highest quality
• Horse Heaven Vineyard
– medium quality, tart
• Indian Wells Vineyard
– weaker flavors and aromas
• Weinbau Vineyard
– Unripe fruit, low quality
Vineyard Trials
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Crop levels
Leaf removal
Irrigation
Grape Maturity
Hand Harvesting
Viticulture Techniques
• Cold Creek Leafing
– prefer leafed over non-leafed
• Cold Creek Thinning
– prefer un-thinned over thinned
• Horse Heaven Thinning
– prefer thinning over un-thinned and thinning at
18 degrees brix (late)
• Horse Heaven Organic
– low quality wine
Winemaking Trials
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Yeast Strain Evaluation
Juice Treatments
Spinning Cone
Pasteurization
Sur Lie aging
Winemaking Techniques
• Wine Quality Improved with:
 Epernay II yeast
 Lower temperatures fermentation
 Juice treatment with bentonite
 1% Juice solids results
Reserve Quality Riesling
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100% Cold Creek Vineyard
Fermented with Epernay II
Fermentation Length = 65 days
1,200 cases
Accounts Surveyed
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DELAURENTI’S
PLACE PIGALLE
SEATTLE CELLARS
PONTI
GRAPE CHOICE
CAFÉ JUANITA
McCARTHY & SCHIERING
RAY’S BOATHOUSE
PALISADE
• WILD GINGER
Customer Feedback...
• It’s good, but it won’t sell.
• Delicious wine, amazing nose - ripe ginger, ginger spice
continues on the palette, tropical guava, candied apple;
citrus appeal - not a seafood white … Asian food;
Germanic without the mineral component.
• Delicious, you guys have a chance to do something ground
breaking.
• Melon, apricots,good acid level, balanced, Alsatian in
style, food wine, tartness in finish might not be pleasing to
some.
Will You Buy This?
• “I’d love to sell this wine”
• “Wrong image. No one wants to be
drinking Riesling. Tough sell. Would
require hand sell. I don’t have that kind of
time”.
Pricing
• WHOLESALE: $9.09 - $9.79
• RESTAURANT: $24 - $26 WINE LIST
•
WBG @ $9.09
• RETAIL:
$12.99 - $13.99
Branding
– Ch. Ste. Michelle:
– NEW Brand:
– Northstar:
– Snoqualmie:
7
3
1
1
• Position:
The Grand Cru of the Pacific NW.
A leader and an innovator.
• Tagline:
“Old world tradition, NW Innovation.”
BMW
1997 Test Lot
Ch.Ste. Michelle Vineyard Select Riesling
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Bottle 1200 cases
CSM/Single Vineyard Package
Sell through retail shop and VRC
Evaluate consumer and trade feedback
Sell locally to key accounts as requested
Release July, 1998
$12 Retail
Recommendations for 1998
 Focus on Cold Creek Vineyard
 Evaluate all SL and Grower Riesling
Sites
 Viticulture Trials
 Winemaking Trials
 Benchmarking
 Ch.Ste.Michelle Cold Creek Riesling
Chateau Ste. Michelle Case Study
Results
1997 vintage:
– 1200 cases “Vineyard Select”
– $12 retail, sold from winery
• 1998 vintage
– 2400 cases “Cold Creek Vineyard”
– $13, distribution to key markets
– “88” rating
1999
1999 vintage
Released June 1, 2000
2400cs
$20 retail
91 PTS
Top 100 !
Wine Spectator Dec 30, 2000
1999 Single Berry Select
30 Cases
$200 per 375ml
97 PTS !
1999 Single Berry Select
Wine Spectator
Nov. 30, 2000
2000 vintage
Released May 2001
5000 cs
$20 retail
AGAIN
91 PTS
Top 100 !
Wine Spectator Dec 30, 2001
Today: The Riesling Renaissance
is Here
CSM Johannisberg Riesling:
• Selling more than any time in its history
• On allocation for last 3 years
• Average retail price up $1-2
• Quality higher than ever--learning from
TQM trials and work with Loosen
Today
Eroica :
• “91/Top 100” ratings on first two vintages
has created high demand, entry into prestige
accounts, halo for Cold Creek Riesling &
JR
• 2001 production up to 10,000 cs with $20+
retail price