The economic downturn in 2008 and 2009 had an enormous impact on our budding wine business. And on our psyche. Special sales programs and support from friends helped to counter our slowing wine sales, but still the problem was huge. In that challenging economy, the extra inventory of our 2005 Cabernet Sauvignon vintage was simply not selling fast enough. To make things worse, we were in the midst of building an expensive new state-of-the-art winery at HALL St. Helena, and we were having serious difficulty finding ways to finance the cost of construction.
Traditional banks do not understand the peculiarities of the wine industry. That’s what happened with ours in 2008. Making wine in a fully integrated way—owning and managing vineyards, running a production and sales facility, plus maintaining a high inventory as red wines must wait three years from harvest to sales—makes this business highly capital intensive. Our bank at the time—a middle market lender rather than a wine lender—just couldn’t wrap its head around the complexities and needs of the wine business.
The clouds were pretty thick.
So we drew on Craig’s capital-raising experience and a ray of sunshine started to appear—at least as far as the construction financing needs went. Craig had raised partnership money for investments while he was in college and for years continued to do so in his real estate dealings and other ventures. Now, 30 years later, we returned to Craig’s former practices.
The good old days did not come back quite so fast. We tried our partnership offering twice in 2009 without much success. In 2010 we pivoted. That year we were joined by 54 new partners. We had found the right formula. The partnership took off. Add to that the fact that we found a new bank and our financing for the winery was suddenly secure.
And here’s the best news.
Not only did we secure financing, our partners became our secret weapon. They have become an army of enthusiastic, supportive HALL and WALT brand ambassadors that extends across the country. Our investors each have business cards showing they’re a partner in the winery. They share the HALL and WALT story and wines with their friends, at places they shop, and in restaurants they frequent. They recruit new wine club members and even other partners. Our team has now expanded from those of us in Napa to a great group of folks across the country. We all come together at the winery once a year for our annual partner meetings, which are fact-filled, wine-filled, and especially fun-filled weekends. As an added bonus, we have made many new friends, and many of our partners now have struck up new friendships with each other.
And our partners enabled us to complete the winery construction. However, the issue of slow wine sales in a depressed economy was a different matter.
In the summer of 2009 we needed some good news to give our little wine brand a push. Earlier in the year, we had received our first really good wine review from the Wine Spectator—93 points for our 2005 HALL Bergfeld Cabernet Sauvignon—as well as 92 points from Robert Parker for our 2005 Kathryn Hall Cabernet Sauvignon. Both were a big deal at the winery, but unfortunately both wines were already sold out, so the terrific scores did not help with sales. Nevertheless we all happily celebrated with a couple of bottles of wine.
And then. Bring out the sunglasses. In July 2009, the Wine Spectator critic James Laube awarded one of our 2005 Cabernet Sauvignons 95 points and three of our 2006 Cabernet Sauvignons scores of 96, 96, and 95 points. Most importantly, our 2006 HALL Kathryn Hall Cabernet Sauvignon (which was widely available) received 96 points and was described as “a big, dense wine, with currant and blackberry flavors and savory herb and earth nuances that provide a solid foundation.”
We were over the moon that our hard work was being recognized. We both just started grinning. Although we felt as if we’d won the lottery, we’d actually been validated that our hard work had put us on the right path. Two months later, our 2006 Kathryn Hall bottle graced the cover of the Wine Spectator. Unbelievable!
That same year, Steve Heimoff of the Wine Enthusiast awarded one of its highest reviews of the year (97 points) to our 2006 “Exzellenz” Sacrashe Vineyard Cabernet Sauvignon. Shortly thereafter, the magazine highlighted the same wine as its 2009 #1 Cellar Selection wine in the world. Heimoff described the wine as having density “like a neutron star.”
All of these 2006 wines that had attracted such positive attention from the wine critics were created by Mike, Megan Gunderson (who is today our associate winemaker), and consulting winemaker David Ramey, whose insights helped shape our wine philosophy.
To say that wine critics’ acclaim matters to a winery is like saying that food reviews matter to a restaurant. Wine consumers have so many brands, wines, and varieties to sort through that they often need some guidance on emerging and established producers, not to mention which wines they should spend their money on. Wine critics have the advantage of tasting a wide breadth of wines and, as a result, are in a unique position to advise consumers about which wines to try. High scores from at least one of the wine review publications accelerate awareness about a winery while introducing the wines to a broader audience. So getting good wine reviews is important, and especially important when a winery is getting started.
James Laube of the Wine Spectator and Robert Parker of the Wine Advocate are two of the best known wine critics. But there are certainly others who are plenty influential—including Vinous’s Antonio Galloni, Steve Tanzer, and Steve Heimoff (who used to write for the Wine Enthusiast); Wine Enthusiast’s Virginie Boone; and the editor and publisher of the PinotReport newsletter, Greg Walter.
We have great respect for these critics and the jobs that they do. While some would suggest that being a wine critic sounds like a great job, where you sit around all day and drink and write about terrific wines, a lot of hard work is involved. Two wines can be equally exceptional and yet completely different. As a result, assigning ratings to hundreds of wines that all aspire to be at the highest level of quality is really hard. Add to that the fact that the wine critics must also characterize each wine in a descriptive and poetic way that sounds neither stilted nor hackneyed. Think about it. How many ways can you write about a Cabernet Sauvignon and not repeat yourself?
Here’s how the tasting process works. When judging a wine, the critics evaluate:
• Appearance—color, clarity, and body.
• Aroma and bouquet—yes, there is a difference. There are actually two types of wine aromas. The second aroma, which develops only once the wine has been bottled, is called the bouquet.
• Taste—grape and other flavors, acidity, sweetness, bitterness, astringency, and balance.
• Texture—body/viscosity, mouthfeel.
• Finish—length, taste, balance, and body of the aftertaste.
• Overall impression—how all of those factors interrelate and harmonize.
Unlike most products, wine is a living thing that continues to evolve once it’s bottled. When the wine is ready, it’s taken or sent over to the Wine Spectator office in Napa Valley or to the offices of the Wine Enthusiast, Wine Advocate, or other critics. Delivering a wine for review doesn’t mean that the wine is at its peak; the wines being judged are still young. But a wine critic understands that a wine that is just three years old will have growth. That’s why they usually include advice in their review about when to drink it.
Over the years, we’ve gotten to know a lot of these hardworking wine critics, especially those who operate locally. As much as we like and admire all of them, we have a particularly fond place in our heart for the Wine Spectator’s James Laube, Tom Matthews, and Marvin Shanken, because every June they throw a blow-out magnum party before the start of Auction Napa Valley. At the Wine Spectator party, you will see many of the top vintners in the valley. Invitations are hard to get since each winery only gets two invitations, so no invitation ever goes to waste.
Everyone brings a magnum to the party to share with their fellow vintners. There is not a shabby wine in the place. The party is held at a restaurant in St. Helena with a high-ceiling interior that makes the space feel like an Italian palace, and an outdoor area with metal tables, vines climbing the walls, a fountain, and lovely, aged brick floors. On the day of the Spectator party, this beautiful place is packed wall-to-wall with the who’s who of the Napa Valley. Neither of us can think of any other time or place when there are so many fabulous wines and famous vintners and winemakers per square inch. It is an ultimate inside-Napa vintner experience for a group of people who are all about the wine experience. Thankfully, Uber finally arrived in Napa in 2014. If they had known about the Wine Spectator party, they would have come sooner.
We held our own private party in March 2010, when the Wine Spectator gave our 2006 HALL Napa Valley Cabernet Sauvignon a score of 94 points. While all the previously mentioned recognition had been important, this particular score really helped launch us forward because this was our most affordable and available Cabernet Sauvignon. After the rating came out, it felt like every wine store across the country wanted at least five cases of the wine (and some more) so they could introduce HALL wine to their customers. All of a sudden, instead of trying hard to sell the wine, we were actually allocating it.
There are wineries who do business that way all the time. If you are selling Château Latour, Domaine de la Romanée-Conti, or some of our cult wines here in Napa, you don’t sell wine, you allocate production. The key to this sales strategy is both quality and scarcity, and the scarcity leads directly to higher prices for that wine. Our plan has always been different. We’ve hoped that by sourcing the best grapes, building state-of-the-art winemaking facilities, and working with the most talented winemakers, we can make great wines at a great value.
We resolved a long time ago that we were not going to produce our wines only to get high scores from wine critics. Our goal has been to make bold, concentrated, rich, and interesting wines that echo the places in which they are grown. Our wines must be different and reflect our own house style. Most importantly, they need to taste great. We also know that not every wine critic will appreciate our style of wines, but we are thankful that many love it.
Of course, just as glowing accolades help sales, the perceptions of the wine critic community can also work against a specific winery or vintage. Fast forward. In 2011, it rained late in the season, exactly when you don’t want the grapes to get wet. Cabernet Sauvignon has thick skins, so it’s usually impervious to rot. Not this time. The rains united the Valley. Everyone was talking about how best to contend with the weather, which was causing the grapes on the vine to spoil. One of our friends actually rented a helicopter and hovered over the vineyards to create massive air flow and help dry the wet fruit. We opted for a more hands-on approach.
Our director of winemaking, Steve Leveque, realized that the rot—or botrytis as it’s known in the trade—had set in where the berry attaches to the stem. He also figured out that if you shook the vines vigorously, the affected berries, because they were compromised at that attachment point, would fall off. So he and Don Munk went into every vineyard we own and visited every grower we buy fruit from. At each vineyard, they demonstrated how hard to shake the vines. Then they tasted whatever fruit fell on the ground to see if the vines were being shaken too hard, which meant that perfectly healthy grapes had been dislodged. They ate thousands of rotten grapes that summer. But the process worked well and by the end of the season we saw more and more grapes throughout the Valley on the ground as more and more people adopted their own anti-rot techniques. When we sold the wine three years later, our approach prompted our “we shook it up” marketing slogan.
Due to this quick thinking and dedication, we were able to make some excellent wines that year. Unfortunately, the perception of the vintage was really poor. Customers and retailers told us, “We’re just going to skip wines from 2011 and wait for the 2012s.” To adapt, we developed a discount strategy along with incentives for our tasting room staff to spend more time selling the wine. Despite our efforts to move wine through our sales programs, sales remained slow. We could not buck the overall impression of the vintage. Then on August 14, 2014, a wine critic gave our 2011 Cabernet Sauvignon a 92 score—which was incredible for both the vintage and the price. The other wines that got similar scores cost ten times what our wine cost. Suddenly, our inventory problem disappeared. Just like that. Sales boomed.
The ripple effect didn’t stop there. Top-notch wine reviews impact more than just wine sales. If you have positive wine reviews, your winery’s reputation improves. As your reputation improves, it is easier to get great vineyards to partner with you and sell you their fruit. Vineyard owners want their grapes to go into great wines that they will be proud of. Of course, the better grapes you have to work with, the better your wines will be. So the cycle, once launched by the critics’ acclaim, can perpetuate itself.
We were pretty ecstatic about those initial noteworthy scores and the ensuing orders that poured in. We still love that part.