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Rosenblum's Sale Crucial for Zinfandel Lovers

Photo by: Greg Gorman

Posted: Jan 30, 2008 5:50pm ET

The sale of Rosenblum to Diageo is important on several fronts.

Rosenblum has been one of the state’s biggest champions of Zinfandel. In any given year it can bottle up to two dozen single-vineyard wines from this grape as well as other often underdog varietals and, perhaps more significantly, it has emphasized value, which all wine drinkers prize.

Rosenblum’s pursuit of special vineyards has led it both to great sites in Napa and Sonoma counties, with the likes of Lyons Vineyard Zinfandel in Napa Valley 2002 (93, $38) and Rockpile Road Vineyard Zinfandel 2003 (93, $29), from the Rockpile appellation in Sonoma County, to Paso Robles, with Richard Sauret Vineyard Zinfandel 2002 and 2003 (92 both years and $19).

Owner Kent Rosenblum and his former winemaker Jeff Cohn have unturned vineyard gems in areas as off the wine road as Solano County, east of Napa, with the England Shaw Vineyard. And it’s not just Zinfandel. The winery has excelled with a wide variety of grapes. Moreover, the evolution of the Rosenblum style—bold, opulent, powerful and expressive wines—pushed and tested the limits of ripeness, winning many fans. Rosenblum’s is not a style that appeals to everyone. Some find the wines overblown and sweet. Yet most of the time the wines succeeded in that style and appealed to many and, on the right occasion, they provided a full-blown wine experience.

Now Diageo buys entry into the Zinfandel market, which is new territory for the publicly traded company. It has big holdings in California, with Beaulieu, Acacia and Chalone. I hope Diageo keeps the focus on quality and value with Rosenblum, and doesn’t dilute the value of the brand or its wines. But this company, like all publicly traded companies, seeks growth and profits, typically through increased volume. When it acquired both Acacia and Chalone, it increased production, introducing an Acacia line of Acacia California wines under the A by Acacia label, which looked much like the Acacia label, which had previously focused only on Carneros-grown wines.

I expect Diageo will take a similar growth mentality with Rosenblum, which already makes 200,000 cases a year, but could easily make more. How soon that change will come depends on the quality of wines from 2005, 2006 and 2007; many wines from the latter two vintages are still in barrel. Moreover, whether the contacts for the single-vineyard wines remain intact may force Diageo’s hand and determine whether they will be continued or not.

Zinfandel also needs its advocates. It’s a distinctive and perhaps the most difficult red wine to grown and vinify. If Rosenblum’s wines decline in quality as volume grows, as Ravenswood’s did when a publicly traded company acquired it, fans of this label and wine will be disappointed.

Here’s hoping Diageo opts to improve on what is already a hugely successful winery.

Dominic Passanisi
Los —  January 31, 2008 1:43am ET
Zinfandel the most difficult grape to grow and vinify? The eyebrows of winemakers worldwide who work with pinot noir, nebbiolo, and viognier must be shooting up their foreheads faster than V2 rockets.
Steinbrunner Oliver
Germany —  January 31, 2008 5:05am ET
Hello Dominic, as you do, i also have great respect for winemakers all over the world, who work with pinot and other delicate grapes. But, if a grape variety like Zinfandel can bring great yields in volume and is growing on 20.000 ha in california, that doesn't mean that it is an "easy living" grape for vintners. Like Pinot Noir, the Zinfandel has a thin skin and the berries stand in compact grapes, which do not reach the ripeness at the same time and can rot quickly with a little bit of too much rain. So the risk of getting green vines with to much acidity is always there. At the same time, when the grapes have reached their full ripeness, they begin to shrink to raisins very fast, so the harvesting of theses grapes must be done in a very short time. So if you want to make fine Zinfandel-Wines, it is not that easy work and the efforts of the winemaker are competitive with pinot noir and nebbiolo growers. James, as you do, i hope for all the Zin lovers all over the world, that Diageo will respect the history of this grape and show this respect by making good and affordable wines (but i'm asking myself, will all the shareholders have the same view?).
Hugh L Sutherland Jr-m
miramar beach, fl —  January 31, 2008 9:50am ET
I was saddened to see that an excellent producer of Zins was sold to a corporation. In the past this has not always worked to the good of the winery as profits gets in the way of good wine. A good example is Ravenswood where excellent Zins became ordinary with ridiculous prices. Also, look at what happened to Mondovi and Arrowwood. Jim, Zins do need more advocates. It would help if the WS did not continue to treat this wine as an illegitimate stepchild. It is a rare article in WS that discusses Zins or their wineries.
January 31, 2008 10:15am ET
Its clear much like Constellation did with Ravenswood, Diageo will increase volume and will not make quality the #1 factor. We need to support family owned family run wineries in CA or every winery will sell out to another big corporation (with only profit in mind). Do we really want all our wines to taste the same?
Scott Politte
des moines —  January 31, 2008 10:24am ET
as a longtime rosenblum premier club member, i hope they dont ruin this product.
Dan Murphy
Tampa, FL —  January 31, 2008 11:35am ET
Steinbrunner - great information on Zinfandel that answered a lot of questions for me. Thank you!
Mark Koppen
Calistoga —  January 31, 2008 11:44am ET
First of all, kudos to the Rosenblums for grabbing the brass ring here - they are nice folks and deserve to cash in here. I have to agree with Emily here - the key to the deal is the Rosenblum Vintner's Cuvee, which is an excellent brand name that can be expanded in a huge way for mass distribution to compete against Constellation's Ravenswood blends.
Jason Carey
willow, ny usa —  February 2, 2008 7:40pm ET
Rosenblum's wines have become too sweet and unbalanced lately, the oak is to overt. There are some exceptions, but so many of their wines are so over-extracted and fleshy without the backbone,, that i cannot tell what varital I am drinking.
Don Willard
REDDING,CA —  February 3, 2008 11:03am ET
Sadly for us Rosenblum fans, When the high scores started coming in they raised their prices 50-70% on some of my favs. I think the best days for Rosemblum fans are behind us.Good news is there are plenty of other Zins that are going to take step & take their place.
Sandy Fitzgerald
Centennial, CO —  February 3, 2008 1:17pm ET
The Big 7 just keep getting bigger, the noose around wine lovers necks keep getting tighter. To Emily, family ran wineries have a huge enemy at the end of the rainbow. It's called death taxes or estate taxes, depending upon your politics. Bad politics may lead the tax man to forcing the sell of most of the great family operations in the US wine industry in the next 10-15 years. Imagine what a Constellation will do to a Harlan.
Mark J Frost
Mercer Island, WA. —  February 3, 2008 4:48pm ET
I too am a premier customer. I very much fear exactly what James is saying about Ravenswood also happening here. The proof will be in the bottle.
Jon Trebilcock
Cape Cod, MA —  February 3, 2008 11:23pm ET
Echoing many comments here, I am sad to see Rosenblum sold to corporate interests. Rockpile & Sauret have been some of my favorite wines to drink, regardless of varietal. True, since Cohn left the style seems to have changed, but as James elequently stated, "Zinfandel needs its advocates." FWIW - Sandy, it doesn't matter what your politics are. Proper planning prevents these taxes from being a problem. Just as with making great wine, doing nothing and expecting great results just isn't realistic.
Tim Webb
high point nc —  February 4, 2008 10:24am ET
dear james, i also have enjoyed the rosenblum zins for several years, and appreciated both the quality and value. now this label will be run by folks who live from quarterly financials to quarterly financials. like most, i anticipate an increase in volume and price with a decline in quality. this seems to me to be the norm. are there any examples of a california winery that actually improved after being purchased by a publicly held corporation?
Powell Yang
Napa, —  February 5, 2008 6:52pm ET
During my 20 month stint at Diageo Chateau & Estates as the Sales Analyst of North American Market, I see the wine division run as a liquor company, which is Diageo's core business. Great when making a formulated drink, but not so for wine. Then again, many will argue that large production wines has become a formula production.

With pressure to achieve growth targets, Diageo C&E often comes out with line extensions, ala Gallo. For example, the introduction of BV Century Cellars line gave them a banner year for fiscal year ending June, 2004.

Diageo is very hands on with their winery operations. Where volume and growth target is the main focus. In contrast, I see Foster's Group being much more hands-off with each of their wineries, a very good thing. Keep in mind this is an opinion from an outsider looking in, as I've not worked for Foster's.

Smart money is on Diageo C&E to increase production for Rosenblum bottling and the quality will drop. If there is a betting line for this, it would be like the line on Patriots vs. Giant, except there won't be an upset on this, period.
Stefan James
Seoul, South Korea —  February 5, 2008 7:43pm ET
While certainly disappointing to observe yet another example of the harsh realities of a competitive marketplace ultimately presiding here, I see two reasons for optimism. First, Diageo's investment provides further evidence of a growing market for quality Zinfandel. Second, the commercial success of the Rosenblums will hopefully spur on the next generation of talented wine makers who share our passion for this wonderful grape. The demise of the Ravenswood label, alas, has not led to a decline in the number of bottles of quality Zinfandel from which I can choose at the wine store. Keep the faith!
Dave Joyce
Winston-Salem, NC —  February 6, 2008 12:01pm ET
Jim - I think that many of us that were Rosenblum Zin lovers are missing the big picture that Mark Koppen has identified quite nicely. After all of these years of giving us such great joy with his wines, why shouldn't we be very happy that Kent has cashed in on the "fruits" of his labors. After all, there are only two reasons to start a business. First, to provide a good or service that you are passionate about, and second, to build a value base that you can sell at some point or otherwise cash in on. Happily, Kent has now done both.

As a wine retailer, I am not as convinced as others in these posts, like Powell Yang, that Diageo is going to be the death of good Rosenblum wines. I look at some of the other wine lines that Diageo picked up in the Chalone Wine Group acquisition, and see the quality of wines behind turned out still just as good (Jade Mountain, Hewitt, Provenance), plus Chalone's core items are still consistently good, just as before, and the new Monterey series, put out by Diageo to capitalize on the Chalone name (like the A by Acacia series), is good juice for the price points and doesn't seem to have effected the sales of the other products. Then there is Orogeny, own by Diageo outside of the Chalone acquisition, which is producing a good Pinot year after year.

I can certainly see Diageo trimming the 40+ (it seems) different labels Rosenblum produced, and taking the Rosenblum Vintners Selection wines using outside fruit to over a million cases, but if they retain the core single vineyards, Rosenblum will still retain their fan base. The only problem I see is the word has always been that Kent paid top dollar for the fruit, which is why he got the great vineyards. That might be an issue with the bean counters at Diageo, but some other Zin producer will certainly grab the contracts.
James Laube
Napa, CA —  February 6, 2008 2:08pm ET
Dave, thoughtful post. I'm all for Kent cashing out and I hope Diagio improves quality and doesn't cut corners. Also agree other wineries will pick up the vineyards that get dropped and that's the way the wine survivor game goes.

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