The Wine Group Buys Bonny Doon's Big Brands

Bonny Doon Vineyards has escaped the Big House. The Santa Cruz, Calif.-based company known for irreverent marketing has sold two of its most popular wine brands, Big House and Cardinal Zin, to San Francisco-based The Wine Group LLC, the third-largest wine company in the United States (according to Impact Databank). The purchase price for the deal, which includes current inventory and the soon-to-be-released 2005 vintage, but no vineyards, was not disclosed.

"The main reason [for the sale] is that I want to focus on other things that are more meaningful to me; to wit, the production of estate-grown wine and wines that might express terroir. Having these large brands took up a lot of our attention, focus and resources," explained Randall Grahm, founder and owner of Bonny Doon.

Current annual sales of Big House, which retails for $10 per bottle, are about 200,000 cases, divided between a red, a white and a rosé made with grapes grown in the Central and North Coast regions of California. The red and rosé are comprised mostly of Carignane, Petite Sirah, Sangiovese and Zinfandel. Chenin Blanc, Viognier, Colombard and Sauvignon Blanc are the primary components of the white. Cardinal Zin, produced from vineyards in Contra Costa and Mendocino Counties, costs about $20 per bottle, with current annual production at about 20,000 cases.

As part of further downsizing, Grahm said that his 100,000-case Pacific Rim brand is scheduled to soon become a separate operation based in Washington state. That drops annual production of Bonny Doon wines to about 45,000 cases, with retail prices ranging between $18 and $32.

However, Grahm plans to double the size of the company's estate vineyards. He currently has 125 acres in Soledad, in Monterey County, but now seeks to acquire an additional 125 acres in the Santa Cruz Mountains. There the company will focus on Rhône varieties for Le Cigare Volant, a red blend inspired by the wines of Châteauneuf-du-Pape.

The acquisition of Big House and Cardinal Zin represents a relatively new strategy for The Wine Group, which has historically focused on inexpensive mass-market labels such as Franzia and Glen Ellen. In June, The Wine Group formed a new division, called Underdog Wine Merchants, to focus on Millennials, consumers who recently reached legal drinking age. "We're trying to build brands that appeal to the Millennial consumers, the people that are fairly new to wine and the retailers that sell to them," said Fritz Lance, president of Underdog.

Both the Big House and Cardinal Zin brands have fun, eye-catching labels, for which Bonny Doon has long been renowned—something that appealed to The Wine Group in its plans to attract younger consumers, said Lance.