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Wednesday 26 November 2014

Hahn redirects brand-building prowess

23rd July, 2014 by Gabriel Stone

The Californian producer behind multi-million dollar wine brands Rex Goliath and Cycles Gladiator is now channeling this expertise into a high-end Pinot Noir and Chardonnay project.

Hahn SLHAfter selling its Rex Goliath brand to Constellation in 2005 for $43 million, earlier this year the Monterey-based Hahn Family Wines sold follow-up venture Cycles Gladiator to a US firm called Wine Hooligans for an undisclosed sum.

Now, following a label overhaul for a brand that was first introduced to the US in 2009, Hahn is stepping up efforts to bring its estate grown, £25 per bottle SLH range to a wider audience.

The SLH brand name aims to highlight the Hahn family’s close connection with the Santa Lucia Highlands AVA in Monterey County where the producer is based.

Pointing to Nicholaus and Gaby Hahn’s key role in the original creation of the AVA back in 1993, Evelyn Pool, the producer’s vice-president of international sales & marketing, told the drinks business: “They’ve always been instrumental in the direction of Santa Lucia Highlands.”

In contrast to the supplier contracts needed to feed production for both Rex Goliath and Cycles Gladiator, Pool emphasised that the fact SLH is produced  “100% from our estate” makes it “a big part of our evolution.”

Outlining the company’s 1,100-acres holdings in Monterey, of which 650 acres are in the Santa Lucia Highlands, she explained the background to this shift in direction. “Because we own such extensive vineyards we realised that we should really be focusing on these so decided to back off and really focus on who we are and Nicky’s original vision.”

Looking back on the success of Rex Goliath, a brand inspired by a 19th century 47-pound Texan rooster, Pool recalled: “It was an amazing story that lit all cylinders – the first critter label, the first whimsical brand. It went from nothing to half a million cases in two years.”

Despite such success on paper, Pool admitted: “At the time we were really struggling. The brand was so successful that the winery was struggling to keep up. We were having to invest not just the profits but even more to keep the machine going. It’s phenomenal how much capital it takes.”

The provocative Cycles Gladiator label

The provocative Cycles Gladiator label

Eventually Hahn sold Rex Goliath to Constellation, while keeping all the grape contracts and winemaking facilities. These were almost immediately redirected to build a second brand, Cycles Gladiator, whose naked woman on the label helped win rapid and lucrative notoriety.

“We were thrown out of Alabama where we were probably selling 500 cases a year,” recalled Pool. “But were were on every news story in the national and international media so it translated from a loss of 500 cases into around 10,000 case sales.”

The sale of Rex Goliath also enabled Hahn to put in place the foundations for its current estate-focused, higher end SLH brand. “We used the profits from the Rex sale to replant the whole property,” explained Pool.

This replanting programme, which was carried out between 2002 and 2006, allowed the estate to at last move on from the UC Davis recommendation in the 1970s that Monterey producers should plant Cabernet Sauvignon and Sauvignon Blanc.   “We still have a couple of rows of Cabernet but we make jam from it,” she joked.

The result means not only that Pool is able to claim “we’re the biggest growers of Pinot Noir in the Santa Lucia Highlands”, but also that Hahn now features the right mix of clonal material for the region.

“Because we were kind of late to the game on planting we had the luxury of picking clones,” Pool explained. As a result the estate has around 25 different Pinot Noir clones, of which around half are Burgundian and half American Heritage clones such as Calera. These are all picked and fermented separately before the winemaking team settles on the final blend.

With current production levels of SLH standing at around 6,000 cases for the Chardonnay and 10,000 cases of Pinot Noir, Pool insisted that there was scope to expand further.

“We absolutely can grow and maintain quality, ” she commented, pointing to a number of positive developments on the sales side. “We’ve had huge growth in the US with a lot of restaurants on board for our wines by-the-glass and we’re in business class with Emirates.”

Hahn's estate in the Santa Lucia Highlands

Hahn’s estate in the Santa Lucia Highlands

Although the wine was originally launched in the US in 2009, 2012 marked the first vintage under the new label, which now heralds the start of a bigger marketing push. “We waited until we had the new packaging to really start promoting the brand in export markets,” Pool explained.

In addition to SLH, Hahn produces around 1,500 cases a year of a Pinot Noir called Lucienne, its top end Santa Lucia Highlands expression that derives from Nicky Hahn’s middle name, Lucien. There is also its entry level offering, Hahn Winery, which retails for around £15.

Despite the difference between this SLH venture and the company’s two previous brand success stories, Pool picked out some key lessons that experience generated on the importance of “being able to control production, sales and maintain quality.” In particular, she emphasised, “You certainly have to be passionate about your product, but really it’s about controlling quality.”

In terms of the key export markets for SLH, Pool remarked: “We are very big in Canada and Asia, but we’ve always done exceptionally well in the UK and Europe because they understand fine wine.”

Insisting on the “huge opportunity” presented by the UK market in particular, where the brand is represented by long-term Hahn partner Castelnau Wine Agencies, she explained: “People in the UK are very savvy. The wine drinking public knows Burgundy and they understand appellations and what makes a wine good. More and more people are looking at investing in California, especially with Burgundy wiped out for another year sadly.”

In spite of Hahn’s own shift in focus, Pool argued there still remained scope in the market for others to build up big wine brand success stories, as she maintained: “The days of the Wild West are not over.”

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