Healdsburg’s Rack & Riddle at epicenter of sparkling wine trend

When Bruce Lundquist and Rebecca Faust decided to go into business together in 2006, the two wine industry executives initially considered launching a custom winemaking facility for still wines.

But Faust, the former financial controller at Piper Sonoma, had another idea.

“Rebecca suggested we create a custom (facility) for sparkling,” said Lundquist, former general manager at J Vineyards & Winery in Healdsburg. “We both had experience in sparkling wine and there wasn’t a local facility for people who wanted to make it.”

That’s when the duo decided to launch Rack & Riddle, Lundquist said, which has become “a very fortuitous investment.”

When Rack & Riddle opened its doors in 2007, sparkling wine sales totaled $13.8 million in the U.S., according to data from The Wine Institute. In 2021, that figure ballooned to $36.5 million — and there is no slowdown in sight.

In Sonoma County, Rack & Riddle Custom Wine Services has become the epicenter of custom sparkling wine production. It produces about 800,000 cases of bubbly per year, making it second to Korbel as the largest sparkling wine producer in California and the largest custom sparkling wine facility in the nation.

“Wine has seen its fair share of trends, but sparkling’s surge in popularity has been significant,” Lundquist said. “People have finally realized sparkling wine isn’t just for special occasions. It’s very versatile and food-friendly. Why not drink it year-round?”

Lundquist also noted the affordability of a good-quality sparkling has made the category more accessible to a wider consumer base. While Champagne costs continue to rise, a $10-$20 bottle of well-crafted bubbles has made it an everyday indulgence.

Quality and convenience

Initially located in the town of Hopland, about 40 miles north of Santa Rosa, Rack & Riddle relocated to Sonoma County in 2014. It was a strategic move that would place the company in the heart of Wine Country, where demand was high.

The large, state-of-the art facility in Healdsburg offered more production space and storage capacities, and allowed clients seeking cache to list Healdsburg as the bottling designation on their wine labels.

Today, Rack & Riddle has three locations: two in Healdsburg and one in Geyserville. Since the beginning, one of the company’s main draws has been its use of Méthode Champenoise, a traditional French winemaking technique many would argue produces the most superlative sparkling wines. It’s a long, laborious, expensive process that involves special equipment and specialized winemaking expertise. For wineries or clients without the time, money or space to produce premium sparkling wines, Rack & Riddle is a convenient alternative.

“What we’ve found is that wineries that add a sparkling wine to their lineup can create a new revenue stream without having to do anything,” Lundquist said. “Why not greet customers with a glass of sparkling before pouring the still wines? They’ll have a cleansed palate, feel refreshed and ready to taste cabernet or whatever else your pouring. It’s become a big draw for a lot of clients.”

Since Rack & Riddle’s launch in 2007, Lundquist said there have been a number of significant “stairstep moments” that have contributed to the company’s growth, with one of the most significant in 2018.

“When we invested in robotics, everything changed,” Lundquist said. “Finding labor has been a problem for quite some time and it became very clear we needed to find a way to automate production or we weren’t going to be able to grow as a company.

“We were also able to protect our employees’ health and safety by eliminating repetitive movements, which was huge.”

Eliminating human jobs, however, was not on the docket. In fact, Rack & Riddle’s full-time workforce continues to expand, currently totaling around 100, with an additional 20-30 seasonal employees.

“Employees formerly on the packing line are now forklift drivers, machine operators or in leadership roles with a higher salary and more responsibility,” Lundquist said. “They have greater job satisfaction, which has completely changed the dynamic among the workforce. We would not be where we are right now given our level of automation.”

Sparkling on-demand

Given the particularity of winemakers and some clients, Rack & Riddle offers numerous levels of sparkling wine customization. Some winemakers choose to bring in their own still wine, then work with Rack & Riddle to transform it into sparkling. Others bring in their own fruit, then hire Rack & Riddle to carry the process from grape to bottle.

One of the most popular options, though, is the private label program, which allows customers to add their own label to “a shiner,” a sparkling wine made by Rack & Riddle. Customers can choose from brut, blanc de noirs, blanc de blancs and sparkling rosé, with fruit sourced from four designations: California, North Coast, Sonoma County and Napa. Sparkling from the Central Coast soon will be available.

Given it takes no less than two years to produce a Méthode Champenoise sparkling wine, the private label program has become very popular among wineries, restaurants, retailers and others who want sparkling wine on demand.

“When we started the business we realized customers wanted sparkling wine right now and it wasn’t possible given the time commitment of Méthode Champenoise,” Lundquist said. “That’s when we decided to increase the production of our shiners so we could have them in inventory to meet demand. Back then we didn’t know if they would sell, so we took a big leap of faith by laying those wines down without selling them first.”

In 2021, Rack & Riddle received a private equity investment from SBJ Capital to take advantage of potential growth opportunities and continue to meet demand. But Lundquist and Faust retain a significant ownership in the business.

“Our ability to expand was somewhat constrained by our financials, so a private equity partner was a good choice for us,” Lundquist said. “They want us to explore new ideas that we may not have been able to afford before, so that has been a lot of fun.

“For now, Rebecca and I are very blessed by the people around us. We’re really looking forward to what the future may bring.”

You can reach Staff Writer Sarah Doyle at 707-521-5478 or sarah.doyle@pressdemocrat.com.