Sonoma, Napa wineries bullish on premium chardonnay market
In the wine world, cabernet sauvignon has been described as the king of the grape varietals while chardonnay is known as the queen.
But the queen has been a little neglected in the overall conversation within the wine industry between the skyrocketing prices for cult cab out of Napa Valley and the fandom of pinot noir from such areas as the Sonoma Coast and Russian River Valley.
But in fact, the green-skinned grape that originated in Burgundy, France, is the biggest seller by volume in the United States and a staple of most wineries and supermarket shelves. The premium and luxury chardonnay market led by Sonoma and Napa counties has continued to grow for the wine that comes in a range of styles but is mostly known for its subtle tropical flavors.
That was especially spotlighted when the Australian wine company Treasury Wine Estates last month bought the Frank Family Vineyards in Calistoga for $315 million. Its executives specifically noted the upscale chardonnay market as an incentive in buying the family winery.
“Frank Family has a strong position in the large and growing U.S. luxury chardonnay market, and combined with our existing portfolio, will see us now ranked as the No. 3 overall in luxury chardonnay and No. 2 in $25 and above,” Ben Dollard, president of the company’s America division, said on a conference call announcing the deal.
In fact, while overall chardonnay volume decreased by almost 7% in 2020 from the previous year, the market for bottles priced at $25 and above grew by 6%, according to data from the Wine & Spirits Wholesalers of America.
Wine sales are growing significantly in the direct-to-consumer market and luxury chardonnay also has seen a boost in that category.
Bottles in the varietal priced from $30 to $50 have increased 13% while those in the $50 to $100 range have climbed by 17% over the past year as of September, according to data provided by Sovos ShipCompliant and Wines Vines Analytics firms.
“It’s not so good at the lower end, but it’s much better as you go up the range. It’s not growing as fast as luxury cabernet sauvignon, but it’s still growing,” said Danny Brager, an alcohol beverage industry consultant.
That’s no surprise for David Ramey, the winemaker who founded Ramey Wine Cellars in Healdsburg. Earlier this year, he turned ownership over to his children, Claire and Alan.
The winery has sold out of its single-vineyard chardonnays. Its 2019 vintage will be released early next year, and the winery is raising the price on it from $70 to $75 a bottle.
“Business is business. When you are sold out, you get to raise the price,” Ramey noted.
The winery annually makes between 20,000 and 25,000 cases of seven different chardonnays.
The winemaker, who once interned at the famous Château Petrus winery in Bordeaux, is a proponent of using oak barrel fermentation. He prefers only 15% from new barrels so the vintage is not an overly oaky-tasting wine, but one with a nuance of complexity in the mouthfeel.
Ramey also noted chardonnay, unlike other aromatic white wines, goes through malolactic fermentation, which converts the malic acid into lactic acid in the juice to stabilize the wine and adds a softer acidity.
“That’s one of the two things that make it (chardonnay) the red wine of whites and makes it the most compelling and complex white wine in the world,” he said of chardonnay.
The winemaker then made this bold statement: Some of the wines made from the Sonoma Coast and Russian River Valley grapes by local wineries are “in many cases, better chardonnay than Burgundy is.”
Rick Tigner, the chief executive officer of Jackson Family Wines, is also optimistic about the growth of the premium segment of chardonnay.
The Santa Rosa company was founded by the late Jess Jackson, who turned Kendall-Jackson’s Vintner’s Reserve into the country’s best-selling chardonnay for the past 30 years. Generations of consumers have gravitated to the company’s flagship brand for its slightly sweet, yet crisp flavor.
Jackson Family Wines is moving out of the below-$15 a bottle category and using its large land holdings across California and Oregon to showcase the different types of chardonnay through its numerous brands, such as La Crema, Copain and Gran Moraine in Oregon, he said.
For example, vineyards in Santa Barbara produce a more tropical flavor, while those grapes around Monterey have a more citrus taste. Sonoma County fruit has the flavors of pears and apples, Tigner said.
“The chardonnay category has more than one style. And then for us, we've been expanding in the chardonnay category,” he said.
The company is especially bullish about its Gran Moraine label, which was founded in 2014 and located in Oregon’s Willamette Valley. The winery is producing a blanc de blanc sparkling wine from chardonnay grapes, which is selling for $90 a bottle on its website.