SEATTLE – Washington’s second-largest wine producer just got bigger.
Precept Wine announced this afternoon that it is partnering with Gruet Winery in New Mexico, one of the largest and most respected sparkling wine producers in the United States. The terms of the deal were not disclosed.
Gruet, which began with the 1987 vintage, produces about 125,000 cases of wine per year, most of which is sparkling. By comparison, Ste. Michelle Wine Estates – Washington’s largest wine producer – makes about 300,000 cases of sparkling wine under its Michelle label.
Gruet, which once was a novelty because the wine was created methode champenoise from grapes grown in New Mexico, has now grown into a nationally distributed brand using grapes not only from New Mexico, but also California and Washington.
The company’s roots go back to 1952, when Gilbert and Danielle Gruet launched Gruet et Fills, a Champagne house in France. In the early 1980s, the family was traveling through the American Southwest and met a group of European winemakers who had planted grapes near Truth or Consequences, N.M., which is 170 miles south of Albuquerque.
The family decided to stake a claim in New Mexico, and their children, Laurent and Nathalie, moved to the United States and began planting grapes in vineyards at 4,300 feet in elevation. Their first harvest was in 1987, and the first wines – 2,000 bottles – were released two years later. They now make nearly a dozen styles of sparkling wine — including four vintage bottlings — ranging from $12 to $43. They also produce three still wines, Chenin Blanc, Pinot Noir and Syrah.
With this partnership, Precept Wine said it plans to keep everything in place at Gruet. Laurent Gruet will continue as the head winemaker in Albuquerque, and Nathalie Gruet will remain at the helm of the brand.
“We have watched Precept Wine handle partnerships within its portfolio of family owned wineries in a way that doesn’t try to reconstruct brands or compromise authenticity,” Nathalie Gruet said. “Gruet, at 25, profitable and still growing, is at the perfect point to leverage the marketing power of a million-case-per-year wine company with a strong national footprint, while keeping every element of our winemaking quality and talent intact.”
Precept Wine a young company with deep roots
Precept Wine has been in business only for 11 years, launching in 2003. However, its roots in Washington go much deeper. The Baty family, which is behind Precept, once owned such wineries as Columbia Winery, Covey Run and Ste. Chapelle. In 2001, it sold most of its wineries to Constellation Brands.
After Precept Wine emerged in 2003 and built itself into a multi-brand company based in Seattle, it merged with Corus in 2010. In the past few years, Precept has been purchasing and partnering with many wineries. It now owns such brands as Washington Hills, Willow Crest, Waterbrook, Canoe Ridge Vineyard and (again) Ste. Chapelle. It also has purchased several vineyards in Washington and Oregon.
Today, the privately held company run by CEO Andrew Browne — a Spokane native— owns more than 4,200 acres of vines in Washington, Oregon and Idaho and produces more than 1 million cases of wine annually. It operates 10 tasting rooms in Washington and Idaho along with eight production facilities in Washington, Oregon, Idaho and British Columbia.
Precept’s partnerships in Washington include Cavatappi Winery, Ross Andrew Winery, Waitsburg Cellars and Willow Crest Wine Estates as well as Shingleback and Red Knot in Australia.
Jay Drysdale, winemaker and co-owner of sparkling wine producer Bella Wines in Penticton, British Columbia, said the acquisition makes sense on several levels for Precept.
“Gruet has got fairly big distribution in the U.S., and 125,000 cases of sparkling wine in the U.S. is a hefty production level,” Drysdale said. “They have all those price points from $10 to $45, with the majority of them around $20, so Precept is investing in quality from a price point.
“When you look at all of (Precept’s) brands, it seems like an appropriate fit, and we are in an acquisition period as an industry, so this makes sense,” Drysdale continued. “I think that if you are a sparkling wine producer and if that’s your sole focus, that actually makes it easier for acquisition. It will complement a portfolio quite easily.”
Precept Wine plans no changes at Gruet
Precept Wine officials told Great Northwest Wine that they do not plan to make any infrastructure changes at Gruet. They do expect to expand Gruet’s on- and off-premise sales on a stronger trajectory.
By adding Gruet to its portfolio, Precept Wine will grow to 1.3 million cases produced, with annual revenues of about $83 million expected this year.
With a couple of minor exceptions, this is Precept’s first foray into sparkling wine.
“We are very excited for the opportunity to enter the growing market of sparkling wine,” Browne told Great Northwest Wine. “The Gruet family exemplifies our company’s mission to bring wines from unique regions of exceptional quality, crafted by talented and passionate people to market. We look forward to building upon the Gruet family’s 25-year track record of success.”
Drysdale, a longtime restaurateur, spent two years as Vintners Quality Alliance liaison for the BC Wine Institute and two years in business development for Enotecca Winery and Resort prior to launching Bella on the Naramata Bench overlooking Okanagan Lake.
“We put our eggs into this basket because we are quite confident in the future of sparkling wine,” Drysdale said. “I think it’s only going to continue to grow. Champagnes, in my eyes, will never infiltrate our market because of the expensive price points of those wines, and the West Coast makes world-class sparkling wine.
“These days, this younger generation is not scared off by their parents’ perceptions about sparkling wine,” Drysdale added. “It’s so versatile as a food wine, and it’s the perfect wine to bring to a dinner party and help unzip things. We think it’s got a huge growth potential.”
Drysdale, familiar with the family’s Champagne brand, wondered if Precept will refresh the New Mexico brand.
“It’s a little old school,” Drysdale chuckled. “It’s got a little bit of that old French flair.”