The Untold Story of American Wine

By Ronald Holden

The great untold story of American wine this year is that there's too much of it. Record harvests around the world and the industry isn't exactly jumping for joy. In any other business, a bumper crop would be cause for celebration, but the wine industry has a huge investment in maintaining steady production, predictable sales, and entrenched distribution models.

Sure, they can process all those the extra grapes and turn them into bulk wine, but then what? What's going to become of all that juice? In temperature-controlled stainless steel tanks it won't go bad, but you can't push wine through the pipeline; you have to suck it out, one bottle at a time. And in this uncharted territory, Precept Brands, the innovative Seattle wine company that has grown from nothing to the largest privately-held wine producer in the Northwest in under two decades, sees nothing but opportunity.

Phil Hurst

Precept began last year by taking over the wholesale business of Truett-Hurst, a 10-year-old winery in Sonoma County whose forte was private label wines. As in a million cases a year for the likes of Trader Joe, Total Wine & Spirits, and Kroeger (QFC, Fred Meyer). The company's CEO, Phil Hurst, has moved over to Precept to guide the new ventures.

A recent example of Hurst's challenge to traditional wine marketing boundaries is a label called Cense, (so far, a rosé, a sauv blanc and a sparkler) endorsed by Weight Watchers. At only 85 calories per glass, the wines offer diet-conscious sips. I found them thin and uninteresting, but I'm hardly the target customer. Point is, Hurst is creating lower-alcohol wines for the so-called "wellness market."

"Phil knows what it takes to source, create, and develop private label and national brands," says Andrew Browne, co-founder, president and CEO of Precept Wine.

Andrew Browne

"Precept is the innovator," replies Hurst, a wine maker himself. "There are a lot of companies creating exclusive labels but none to the degree of Precept." Hurst is working out of Sonoma, not Precept's 4^th floor offices overlooking Lake Union, but he checks in regularly. In Seattle for a trade tasting earlier this month, he said, "Half of all consumers say they want to drink less alcohol. Hence the Cense line, which reduces the alcohol level in a finished wine by vacuum distillation.

But there's even bigger opportunity in the private label business. Most supermarkets operate on ultra-thin margins. Competitive produce like bananas or avocados are lucky to clear one percent. Nationally- branded wines fall into the higher end of the spectrum, at 10 to 12 percent, except when they go on sale and the store's cut falls to 4 or 5 percent.

But (and here Hurst's eyes light up) private label wines routinely average 50 or even 60 percent margins, "Who wouldn't want that?" he asks. And fortunately for Precept (and for wine drinkers), there's gallons and gallons and gallons of excellent bulk wine sitting in tanks throughout California, Oregon, and Washington.

Another innovative distribution channel is alternative packaging: bag-in-box and canned wine.

It's always been a bit of a puzzle why wine, alone among beverages, should see the overwhelming majority of its volume sold in expensive, cumbersome, and heavy bottles of 750 milliliters while its competitors (beer and soda) fly off the shelves in 12-ounce cans. The mystique and rigid traditions of wine disdained jugs, demonized bag-in-box, vilified cans. In fact, Precept's earliest forays into canned wine, just a couple of years ago, played right into that mythology: its canned "West Side" wines didn't taste metallic but simply uninspired. (They're no longer on the market.) Now, Precept is putting its better wines into cans. Six-packs of House Wine, for example, a brand it acquired from Charles Smith, are stacked at the checkout counter in grocery stores (even pharmacies) around the state. Cans of wine hold 375 millileters, equivalent to a half- bottle (just a scosh more than a 12-ounce can of beer).

They're available at Mod Pizza for $7.97 (among other on-premise outlets) and have started showing up on the menus of the home-delivery services, too. Many are flavor-enhanced spritzers (not necessarily a bad thing); there's even a rainbow can for LGBT events. I wasn't a fan of the "American Rosé Wine" (made in California), but the Sangria (from eastern Washington) was just fine. There are spritzers for all tastes, mostly sweet, that are made for enjoying poolside, or on the golf course, or at a Little League game; wherever you'd bring a can or two of beer, you can now find a can of wine to suit your taste. And my taste is wholeheartedly for the Watermelon Spritzer (Washington grapes) and the Original Red Blend from House Wine (sourced from Cabernet, Merlot and Syrah vineyards in Chile).

There's a document with a dozen slogans that employees at Precept Brands are encouraged to follow. A dozen precepts, if you will. A couple are straightforward ("Operational Excellence" and "Purposeful Communication," for example), a couple are borderline irreverent ("Do epic shit," and "Own the turd"). But the key to the company's energy goes beyond slogans on motivational posters. It's this: "High Payoff Activities."

A lot of people get into the wine business for the lifestyle, which is then justified by words like "passion." But passion itself rarely sustains a long-term relationship. If a business is run purely on passion, it will burn out pretty quickly. What it needs, once early passion fades, is discipline. That means keeping one's eye on the ball. And if you're running the business, you have to motivate your employees to keep their eyes on the ball as well.

So it's no wonder that CEO Browne should remind me, in our most recent conversation, "People are everything." And people-some 400 of them by now-plus the corporate culture described by the company's 12 precepts "are unstoppable."

Meantime, Precept's director of wine making, Hal Landvoigt, is flying back and forth to South Africa to source sauvignon blanc and pinot grigio from the Western Cape. "There's more to South Africa than chenin blanc and pinotage," he says, as he takes off up a dirt road in the Swartland back country to a property called Babylon's Peak. The result of his travels is a label called Shwe Shwe, the woof and warp pattern common to local textiles, weaving together grenache, syrah, cabernet sauvignon, mourvedre, and malbec.

Hal Landvoigt

Browne himself pays homage to his grandfather with a new line called Spymaster. William Bittner Browne was a Harvard-trained lawyer from the Midwest who happened to speak French, so he was recruited as an operative by the CIA's predecessor agency and parachuted into France ahead of D-Day.

Meantime, his namesake Browne Family Vineyards label has hit its target market: premium wines in the $20-$50 range, ranking number one among Washington-origin brands. There's also a related by-the-glass label, Heritage, that is popular with restaurants.

Landvoigt has a sideline importing wines from artisan producers in France and Spain, two or three pallets at a time. Depending on bottle shape, that's around 700 bottles per pallet, barely enough to fill up a modest private cellar. "But it's important to 'dink outside,'" he points out. Besides, Browne has essentially given him the keys to the castle, so he can do whatever he wants.

One of the Precept precepts: "Have Fun." So what did they do for April Fool's Day? Promoted a new canned wine: "House Air."

June 2019

Ronald Holden is a Northwest native who's been writing about local food for over 40 years. His latest book, the second edition of Forking Seattle, is available on Amazon.com ( paperback here , kindle version here ). He blogs at ForkingSeattle.com