January 2006 Issue of Wines & Vines

Boutiques: starting and staying small

by Larry Walker
Boutiques: starting and staying small
The realities of operating a boutique winery, as depicted by Hanzell president Jean Arnold (left), general manager/winemaker Michael Terrien and cosulting winemaker Bob Sessions.
The common wisdom in the wine industry these days is that the big producers are going to keep getting bigger by gulping down the mid-size producers. But if you are a small producer and do it right, it's possible to survive and even thrive in the wine market.

Leaving the market aside--that's another story--what is it like to operate a small-production winery in terms of viticulture and winemaking?

The first issue is what to call the small producers. Some call them artisan, but the most commonly used term is boutique.

The question of size, in terms of case production, also comes up. Is the top production for a boutique winery 10,000 cases? 20,000 cases? Maybe even 50,000 cases?

There are other considerations, of course, such as whether or not the owner is directly involved in the winemaking and marketing process and where the grapes are sourced. We decided to go to three boutique producers and ask them to define themselves, hoping in that way to start a dialogue with wine producers and suppliers on the subject.

The ultimate question, of course, is "Why are you so small?" In the case of those interviewed for this story, the answer always came down to their value system, to what they believe in as a way of life, rather than the bottom line.

Boutiques: starting and staying small
Hanzell's 42 acres of vines are farmed vine-by-vine; its wines are made barrel-by-barrel; hence, costs are high, and management must adhere to a long-term view.
Hanzell Vineyards Sonoma County

Hanzell was founded in 1956. According to Jean Arnold, the winery president, current production is about 3,000 cases. Over the next five years, production is expected to top out at about 7,000 cases as a recently built production facility comes into full production.

Hanzell owns 42 acres of vines and all wines are grown, produced and bottled on the property, a rare example of a completely estate winery in the European sense of the word.

Asked what particular issues with viticulture and wine production come with the territory of being a boutique producer, Arnold said: "The issues with viticulture and production with our size is that everything is done either by hand or in small-production scale. So costs are very high for the intensive needlepoint farming vine-by-vine, to winemaking block-by-block to barrel-by-barrel lot."

On the issue of costs, Arnold said if one has a short-term view of gross profit margins or short-term return on investment, he should get out of the business. "We have a very long-term approach adopted by our young owner with support of his business trustees. The 'Hanzell Way' is a long-term, slow-to-change, careful observation-over-generations approach. I have inherited this approach here, and also the absolute commitment to quality at the highest level for growing flavorful grapes and exquisite winemaking. I know this sounds trite but it is not, here," she said.

As examples taken from the vineyard side, Arnold said, "We prune rigorously to set the low yield we like for our vines. We then thin when necessary during the growing season. We sort in the vineyard and at the sorting table."

The easier way would be to allow a larger crop to set and then pick the best clusters, but Arnold feels that there is some complexity lost when too much crop is ripened. "After all is said and done, we make the final blend with all barrels, then start subtracting out the different lots until we get what the winemaker deems the best blend of barrels and lots. We declassify the barrels that are not appropriate for the final blend."

Arnold said that with the 2002 Pinot Noir, only 450 cases were left for the final blend. "We did not think some of the other barrels were appropriate. This is, of course, a big financial hit. I was able to gain approval for the decision with a five minute phone call with the owner."

The declassified wine is sold on the bulk market, although Arnold said most of it was good enough to bring $30 or $40 a bottle as a second label.

Looking at the larger picture, Arnold said she is "deeply concerned" about the future for many artisan wine producers around the world. "I have added the following tag-line to my correspondence now, and will continue to lecture on this same topic whenever I am speaking around the country: 'Hanzell Vineyards believes in acknowledging and supporting independent artisan business owners by making the conscious commitment to take the time to search out and support their efforts whenever possible.'"

Michael Terrien, who was recently named winemaker at Hanzell, said he believes that being small is a real plus in the market. "I have observed expressions of relief and support among gatekeepers and consumers when they understand how small we are. It is as if the very fact that we make only one estate Chardonnay and one estate Pinot Noir gives them a reason to want to like us. Our lives are inundated with information and choices, from overflowing e-mail in-boxes to superstores. All the choices available to us are psychologically burdensome, and in response we seek simplification. The singular artisan producer of wine is an oasis in what has become a hyper-capitalist culture," he said.

Terrien said his decision to come to Hanzell had a lot to do with the history of the winery--it has the oldest Pinot Noir vines in California, and was the first New World winery to use all French barrels. "But even more important to my decision are the circumstances supporting Hanzell's persistence for a half century. Three owners and two winemakers over 50 years. The current owner is young, and his family has owned the property for 30 years. The stability of Hanzell speaks to its longevity, and encourages me to settle in for a long run."

Boutiques: starting and staying small
Lane Tanner
Lane Tanner Winery Santa Barbara County

Anyone who has followed Lane Tanner's career knows that she is a bit of a maverick. A native of Lake County, Tanner took a degree in chemistry from San Jose State University in 1976. She worked for a few years in the air pollution industry. That ended in 1980, when she found herself stationed in Glendive, Mont. for the winter.

Back in Lake County, she took a "temp" job on the bottling line at Konocti Winery. When they found out she was a chemist, they asked her to do some lab work. Here's how Tanner tells of her start in the wine business on her Web site: "The first day I was in the lab, I was introduced to their consultant, André Tchelistcheff, as the new enologist.

I had no clue what that was. André kept telling the winemaker, 'Have Lane test this, have Lane check that.' At the end of the day, the people at Konocti asked me to stay on because Mr. Tchelistcheff liked me and they didn't want to tell him that they had lied to him. My new career was born."

Given that beginning, it is no surprise that Tanner has consistently taken the road less traveled, or maybe the road not even on the map. After working for a few years at Firestone Winery in Santa Barbara County, she started her own company in 1984. She had exactly one client, the Hitching Post steak house in Santa Barbara. She made the house wine for the Hitching Post, and in 1989 started her own label.

Today, she makes about 1,500 cases of wine in a leased facility. "I'm totally happy at that level. I can do it almost entirely alone. I could get bigger and have a larger gross, but I think the money would end up about the same. Money doesn't motivate me as much as it does other people. I think many people are obsessed with the culture of winning. They have to make the most points or the most money."

Tanner said she has been approached by investors who wanted to build a winery for her. "If I did that, I would have to increase production and work harder. That would violate my laziness factor."

Since her production is so small, does she have a problem finding growers willing to bother with the small lots she buys? "I pick growers I like to work with, either because of the site or the fruit. In all honesty, I've stopped using fruit because the grower is too much of a headache."

She added that contrary to expectations, she finds growers very supportive. "In fact, I've had growers let me take fruit from a specific part of the vineyard that was supposed to go to someone else. 'Just take it,' they said, 'no one will ever notice your 7 tons being gone.'"

Tanner said she also realizes that she has to treat growers right. "I don't yell at them during harvest. They have enough on their hands. And I keep in touch with them during the year. Give them presents after the harvest."

On the winemaking side, Tanner usually makes three Pinot Noirs and a Syrah. "I started out making Pinot Noir, and my methods have not changed much in the last 20 years," she said. She tries to find the best Pinot grapes in Santa Barbara, and harvest them when they taste right, "not when the sugar hits a certain number. I look for maturity and complexity, but with the sparkle of youth."

Grapes are gently crushed into 4-by-4-by-4 foot open-top fermenters. "In my punchdown technique, I strive for maximum extract of flavors from the grape in the early stages of fermentation, before the alcohol rises too high. I get the delicate flavors without the harsher alcohol components. The wine spends 12 to 18 months in French oak, only 20-30% new."

In the end, Tanner has found many reasons to remain small. "I'm able to do almost everything by myself. If you hire just one person, think of all the paperwork, the insurance. The amount of money you spend is really weird."

Summing up, Tanner said, "I don't market myself as well as I should. I don't like going on the road. But I always sell out."

Stony Hill Napa County

Stony Hill was Napa's first cult winery, with a history going deep in the modern roots of Napa winemaking. Fred and Eleanor McCrae bought a 160-acre goat ranch on Spring Mountain in 1943, at an elevation between 400 and 800 feet above sea level. They began planting Chardonnay in 1947. "They wanted to plant only Chardonnay," Peter McCrae, their son and proprietor of the winery, said. "They loved white Burgundy and believed the site was perfect for it, but UC Davis advised them to plant other varieties, because at the time there were only 200 acres of Chardonnay planted in California."

Boutiques: starting and staying small
Peter McCrae
Happily, the McCraes didn't follow that advice. They continued to plant mostly Chardonnay, but did add Riesling, Gewürztraminer and Sémillon. Today, there are 25 acres of Chardonnay, 10 acres of Riesling, 3 acres of Gewürztraminer and 1 acre of Sémillon. They buy a small amount of Tocai Friulano to make a dessert wine. All the rest of the wine is grown on the estate.

Stony Hill is a good example of a winery that started small with no intention of ever getting much bigger. For several years Fred McCrae, who worked in advertising in San Francisco, was a "weekend winemaker." With the winemaking and his unusual style of wine marketing--it started with letters to friends, which grew into a mailing list, which is how most of the wine is still sold--he hardly had time to think of growing.

McCrae also had good connections at UC Davis, and a series of future hall-of-fame winemakers, such as Jed Steele and John Kongsgaard, worked in an informal apprentice program at Stony Hill. Today's winemaker and vineyard manager, Michael Chelini, has been with the winery since 1972. He and Peter McCrae work closely together on the wine. (Peter's wife, Willinda, is the business manager and vice president.) Things haven't changed a great deal in the 30-plus years that Chelini has been there, as far as winemaking goes. Going into the winery is like stepping into a time warp. (It is also very familiar looking to anyone who has spent much time cellar-hopping in Burgundy.)

Boutiques: starting and staying small
Mike Chelini
Chelini does keep careful watch over the wine, but he is clearly not into "over-produced" wines. He buys one or two new barrels a year, but the workhorse barrels are the older 130-gallon barrels that he uses for Chardonnay fermentation. He doesn't put the wine through malolactic and he doesn't stir lees. The wine is filtered before bottling.

At the time the McCraes began making wine, that was how most Chardonnay was made in California. New oak barrels were used sparingly, if at all. Producers like Wente and Louis M. Martini were familiar with the white Burgundies of France, and were aiming at that flavor, although the September heat in California often drove acid levels down.

Stony Hill has stuck to that style of wine over the years, as other producers have used more and more new oak, induced malolactic fermentation and other measures that, in the end, often mask the pure Chardonnay fruit. Now the trend seems to be moving back toward the Stony Hill style, an irony not lost on Peter McCrae.

Asked if his parents set the style or took what the vineyard gave them, McCrae and Chelini agreed that it was a mix, although the McCraes clearly respected the Burgundy model.

"I've often wondered what wines from our vineyards would taste like made in the oaky-malolactic style," Peter McCrae said, "but we wouldn't want to get malolactic in the winery."

There was something of a minor sensation in Napa when it was learned that McCrae had planted a few acres of Syrah and Cabernet Sauvignon. He said the Syrah was strictly an experiment, with only half an acre planted. "It will never be more than a house wine," he said. The Cabernet planting is a commercial operation. The 5-acre planting replaced Chardonnay vines that were infected with Pierce's disease, and McCrae thought it was a good spot for Cabernet. However, he plans to sell the grapes, and has no thoughts of making a commercial Cabernet in the foreseeable future.

That decision reflects his desire to follow the family line and remain small. "We couldn't make a red wine in our present winery," he said. "We would have to expand or make it somewhere else, and I'm not ready to take that on."

As to the future, McCrae said that would be up to his two children, who are not working in the winery at this time. "This is very much a one generation winery," he said, "and that is the way it will stay, small and personal. We want to keep our business at a human scale."
Print this page   PRINTER-FRIENDLY VERSION   »
E-mail this article   E-MAIL THIS ARTICLE   »
Currently no comments posted for this article.