Deep Purple

Redefining fine wine, one price point at a time.

 

Let’s get this out of the way at the outset: I love “purple.” It’s vivid. It stands out. None of this namby-pamby violet—violet is a stain; purple is a slash! I’ve even been known to use the word “purple” as a descriptor for red wines that are so intense that they’re, well, purple!

 

So early on in our interview, I ask Purple Wine Company (PWC) founder Derek Benham where the name notion came from. “Well, I’ve always liked the color,” says the 1981 UC Berkeley grad (with majors in English literature and existential philosophy, “just a few credits short of a triple major with history”). “I was also a big fan of Jimi Hendrix’s song ‘Purple Haze,’ and then there’s Keats’ poem [“Ode to a Nightingale”] with the line ‘purple-stained mouth.’ When you add in the fact that virtually all of our production is centered around red wines—which come from purple grapes, right? Well, what more could you ask for?”

 

What, indeed? A native of Bakersfield, Benham grew up in a farming family. “My dad started Berrenda Farms in the late 1950s, which consisted of roughly 50,000 acres in the west end of the San Joaquin Valley over by Lost Hills, mostly almonds and pistachios, with a little cotton thrown in for variety.”

 

When he graduated, Benham “fell into a sales job with Barengo/Lost Hills Winery, a small winery over in Lodi,” he says. But despite the strong sales base he built in the Bay Area, the company was failing as a result of too much leverage and poor management.

 

“The four limited partners, of which my father was one, intended to shut the business down,” he remembers. “At age 26, I stepped forward and offered my services to attempt to turn the company around and then to sell it for them, thereby eliminating their debt exposure. I knew nothing about running a company.

 

“Astonishingly, the partners agreed to let me have a crack at it, but made it clear they were done contributing any additional operating capital. I drastically reduced the winery head count, then created some operating liquidity by selling off excess bulk wine inventory and non-core winery equipment. I repackaged the Lost Hills brand and developed a national distribution network for it with annual sales of 150,000 cases. I also opened up the winery to provide contract crush and fermentation services to outside clients. Within 12 months, the cash flow was positive. I then put my investment banker hat on and eventually sold the business to the pre-Kendall-Jackson La Crema Winery. Mission accomplished.”

 

Next up, in 1989, was Codera Wine Group’s Blackstone Winery, "which began as a control label brand for one of our key retailers.

 

“I was intrigued by what Jess Jackson had developed in terms of Kendall-Jackson being identified essentially with one core varietal in the $10-per-bottle price point. I believed there was a similar opportunity to do essentially the same with Merlot instead of Chardonnay, so the Blackstone brand was built with a single varietal focus on Merlot.

 

“‘60 Minutes’ aired its ‘Red Wine Paradox’ report concurrently with the development of Blackstone Merlot, and sales took off—along with the entire red wine category in the United States. Luckily, we were already in it, had our supply locked up and got a jump on our competition. Blackstone was built very carefully, with extensive broad market distribution that emphasized ‘on premise’ restaurant accounts, specifically by-the-glass pours, which were also gaining popularity at the time. We were extremely sensitive to providing extraordinary quality for the price.

 

“At the time, Merlot had some cachet in the high end, so we found a way to source quality grapes and bring in a wine in the $10-per-bottle range. We made Blackstone synonymous with Merlot. I hate the notion that quality wine ought only to be available to the privileged.”

 

He took that concept to an even greater extreme when he set out to do the same thing with Pinot Noir through the Mark West label. Amazingly, in 2001, he managed to create a $10 Pinot Noir that swiftly became the category leader for $10-to-$12 Pinot Noir, both in national retail and restaurants. “The idea in both cases—the Merlot and the Pinot Noir—was to try and identify an emerging category that the ‘bigs’ weren’t interested in, either because it was an underdeveloped category or because they couldn’t scale it; it was either too small of a category or they couldn’t contract enough grapes to satisfy the emerging demand. That’s what Pinot Noir was back then: The grape was too fickle to grow and ferment reliably in large quantities. We promoted Mark West as ‘Pinot for the People.’ Our philosophy was to bring this traditionally more expensive and delicious wine to a broader audience.”

 

Benham reminds that, in 2001, “the Pinot Noir category was about the same as the Merlot category was in the 1990s. There was a lot of high-end Pinot Noir, but no real suppliers doing serious work in the ‘value’ tier. Pinot Noir was very expensive on the supply side [grapes], and that supply was very limited. So we had to create a lot of lasting relationships with growers to solve the supply rubric. There was a lot of risk in convincing growers to graft a lot of Syrah and a lot of Merlot over to Pinot Noir. But we pulled it off, and the results were better than anyone could have expected.

 

“The risk was two-fold,” he continues. “On the one hand, the grower assumes the cost and risk of planting what’s an essentially untested variety, while the winery—i.e., us—is required to sign a long-term contract with said grower not really knowing how much we can sell. It’s like flying blind…but that’s the nature of the wine business and permanent crops.

 

“At the time, there wasn’t a lot of money in the category, because the cost of goods was always a struggle. But we were careful to build the brand, especially through the by-the-glass category in restaurants and through the smaller independent retailers. That’s labor intensive, but those customers really stayed loyal once we had them on board. When you build a solid foundation with 10,000 accounts across the nation, and you protect your price point—especially with the on-premise [restaurants, bars] accounts, they’re the Holy Grail—then you can secure your exposure, your position. When you sell a glass of wine to a restaurant patron, it doesn’t get any better. He’s already there to celebrate something. He’s there with other people, and wine is the social beverage. The food makes the wine taste better and vice versa. And wine certainly improves the conversations, right?”

 

A growing family

Since those early forays, Benham has refined his vision, never losing sight of the original goal: to make fine wine accessible and affordable to more than just top-tier spenders. And by focusing on mid-range price points and emerging varietals and trends, he’s been able to do just that. Today’s PWC family of brands includes Avalon (Cabernet Sauvignon), Four Vines (Zinfandel), Naked (unoaked Chardonnay), and its newest, BEX (Riesling) and Cryptic (red wine blend).

Right now, Benham and his crew are closely examining categories that might bring opportunities that others haven’t capitalized on. “We have a German Riesling under our BEX label that’s really promising,” he continues. “Riesling wines are very interesting, but they’ve never gotten a fair showing in this country. We’re just dabbling in it: 20,000 cases. It’s tiny now, and we haven’t done anything to support it yet. But the potential is definitely there. Riesling is one of the ‘noble’ varieties; it has a pedigree, it has history and, when our sales force begins to give it the attention it deserves, we believe we can grow it to 100,000 or 150,000 cases!” Don’t you love an optimist?

 

Benham also believes that, while Cabernet Sauvignon is too much of a commodity category, a red blend based on Cabernet and Zinfandel is another market with all sorts of upside. “That’s why we created our brand Cryptic as an upscale red wine blend. I think it occupies a unique niche, tapping as it does into two of the most dynamic growth trends in the table wine category—red blends and wines in the $15-to-$20 price point sector. Look at the numbers: The red blend category is up 25 percent over the last year; wines in the $15 to $20 segment are up 16 percent in the last year. You have to catch the wave.”

 

Dennis Carroll is president of Purple Wine Company and its sister company, Sonoma Wine Company (SWC). “We have five facilities, mostly here in Sonoma County with one in Napa Valley,” says the Novato native. “Sonoma Wine Company is our custom crush facility, where we handle whatever our clients need, from simply bottling their wine to the whole process, from crush and fermentation to bottling, warehousing and compliance. We started PWC in 2002 and bought our primary facility in Graton [a former apple processing plant that Chateau St. Jean once employed for its sparkling wine operations] the following year.”

 

A former accountant and consultant, Carroll has enjoyed his foray into wine. “I’d worked for Beverages & More and appreciated the chance to get out of the corporate world and into the hands-on side of things. People are looking for good value, and we have that. And, with Derek’s business sense and [winemaker Alex Cose’s] understanding of grape sourcing, we can take a 15,000-case brand and scale it up into the hundreds of thousands of cases…all at a fair and reasonable price.”

 

Carroll is obviously proud of the work Purple did with the Mark West Pinot Noir. “Sure, we had a little help from the film ‘Sideways,’ but we built the brand around restaurant by-the-glass programs, chain stores and the independents. At that point, there was nowhere for us to go except head-to-head with the big guys, and that’s not our zone. The $10-to-$15 dollar category—like Avalon, like Four Vines—that’s where we’re good.”

 

Purple is green

While it’s not something that Purple Wine Company trumpets as much as it promotes its wines, Benham is quietly proud of PWC’s (and SWC’s) efforts to go green. “Green is pretty important today,” says Benham. “As I said, I grew up in a farming family, and if we didn’t pay attention, we could lose it all. Philosophy aside, it’s a question of ‘show them the money.’ It pays to go green. When people see the potential savings, they do tend to fall in line.”

 

One suspects it’s not quite so simple, but the numbers don’t lie. “In the past three years, we’ve decreased our wastewater generation per case from 3.81 to 3.14 gallons, or 22 percent. That’s important. We’ve also decreased our natural gas use per case from .025 therms to .014 therms. That’s nearly a 50 percent savings. We’ve also done well at cutting electricity use per case, which is down 29 percent from three quarters of a kilowatt hour per case to just half a kilowatt hour.”

 

Green house gas emissions have been diminished by 436 metric tons of C0₂, which Benham says is the equivalent of the annual emissions from 72 passenger vehicles. That’s a nice, round—and very real—number to parse.

 

“At one of our wineries, we increased our bottling capacity by nearly 50 percent, increased our tank storage space almost 15 percent and added another 50 percent of barrel storage capability without increasing refrigeration tonnage. How did we do that? Well, we seriously upgraded our energy efficiency by insulating 50 of our wine tanks and our glycol storage tank to reduce energy load, by installing hot and cold water storage tanks for the same reason, by replacing water boilers with higher-efficiency water heaters, by replacing metal halide lighting with high efficiency T-five fluorescents and by replacing our air compressor with one that has variable-speed and on-demand features.

 

“We implemented a wastewater monitoring system to regulate aerator use, installed foam-insulated, reflective roofing and insulated our cold and hot water supply lines. A glycol cooling system replaced our outdated Freon air handler units. By employing a steam sterilization system on our bottling line, we’re saving 1,700 gallons of water each day! A wiped film rotating disc evaporator for wastewater treatment lets us reuse 2,300 gallons of treated process water each day. Finally, a 24,000-square-foot canopy project is going to divert up to 1 million gallons of rainwater out of our waste water pond.”

 

Making something

All of that’s good and interesting, but doesn’t amount to much if the wines aren’t of value and of interest. That, of course, is where Alex Cose steps in, a fellow who took a less-than-ordinary path to winemaking.

 

The Redwood City native went to business school after high school and was working for Wells Fargo when, at the tender age of 22, he began to question his career path. “I just began to ask myself if I was supposed to be that miserable,” he says with a wry laugh. “It seemed to me that the most successful people were those who’d turned their hobbies into careers. A friend of mine’s brother, Jim Kakacek, was then winemaker at Monticello in Napa. This was in the early 1990s. I went to work there—for no pay, sleeping on Jim’s couch—and loved it! It was a ‘carpenter’s moment’: When I drank a glass of Cabernet, I could say, ‘I made that!’ Sure, I could have made more money staying in banking. But, as a banker, you didn’t actually make anything.”

 

Cose chose Fresno State over UC Davis because he heard it was a more hands-on program, did internships at Scott Harvey and Joseph Phelps and, when he finished his degree in 1996, went to work at Peter Michael in Knights Valley. “I was there for six years, and I learned how wines could be made at the very highest level, where there were no limitations on the cost of the fruit or the quality of the equipment. The goal was to make the very best wines, with no budget. It’s not exactly a business plan, but you do learn to recognize fantastic flavor profiles.

 

“Now, I get to do that in a different way. It’s a puzzle to solve, and the challenge is wonderful. Because of my prior experience, I have the street cred and the respect that I wouldn’t otherwise have going out there and trying to secure solid grape contracts. At the end of the day, a grape grower wants his vineyard clean—he wants to sell every grape. By taking good care of our growers, they take good care of us.”

 

Cose agrees with Benham that their BEX Riesling fits a needed niche. “We needed a good white wine for the portfolio. It’s too hot in California for Riesling, and the soils aren’t right, so we turned first to Germany’s Mosel, and then to the Nahe where we could get a reliable source of quality fruit at a fair price. Remember, PWC is known for consistency at a particular price point. And, much as Zinfandel is a hook for me with our Four Vines label, having previously worked in Amador County, I also have some nice Pinot Noir in barrel, so that’s something that might come back on line for us down the road. The marketing people still have a year or so to figure out a brand for the Pinot. What we have in barrel is awesome!”

 

 

Last but Not Least, The Wines