Being family owned has distinct advantages over corporate control, the head of one of the country’s largest wine companies said Wednesday, because it allows for more risk-taking in a fickle consumer marketplace.
“A lot of things that we have done are just kind of keeping our eye on the market, not just the wine market, but the consumer market in general to see what’s next,” said Roger Trinchero, chairman at Trinchero Family Estates of St. Helena.
The winery sold approximately 19 million cases in 2016, according to Wine Business Monthly, making it the fourth largest in the United States.
“The wine business, in my opinion, does not lend itself well to the corporate ownership,” Trinchero added during the Impact Napa conference at the Meritage Resort and Spa in Napa.
Trinchero said decisions made based on quarterly earnings are typically not “good decisions for the future” and that his family can wait as long as three years for a return as a project develops.
While not as widely known as the Gallo and Jackson families, the Trincheros have been at the forefront of innovations in the wine industry since 1947, when John and Mario Trinchero bought Sutter Home Winery and moved to Napa from New York City. Mario was Roger’s father. The company, which owns about 10,000 vineyard acres, was at the forefront of such products as screw caps and non-alcoholic wine.
Sutter Home struck a goldmine in the 1970s by popularizing white zinfandel, producing 3 million cases by the mid-1980s. Trinchero noted that its white zinfandel sales were “all driven by word of mouth” and not by advertising. It recently helped fuel the growth in the red blend category with its Ménage à Trois label, debunking conventional wisdom that wine drinkers care solely about varietals.
“It all goes back to our philosophy of giving the consumer what they want,” Trinchero said. “Whatever your taste is, we got something for you.”
The company has focused on products that produce higher profit margins beyond its flagship Sutter Home, which sold 10 million cases last year. Like E&J Gallo Winery, it has gone into the spirits business and has made recent moves into the premium wine market, acquiring and partnering with such Napa brands as Mason Cellars and Ziata.
While still retaining family control, Trinchero in May looked outside the family for new leadership and named Bob Torkelson chief executive officer, replacing Roger.
The biggest challenge the company faces is consolidation within the industry at all stages from growers to wholesalers to retailers, which Trinchero said makes it harder for its 45 labels to break through even given its size in the marketplace.
“There is only a certain amount of attention that a consumer will give to any brand. It’s a constant battle out there to be fresh and to be pertinent to the consumer,” he said. “That’s one of the reasons we have diversified so much.”