With all the romanticizing that goes on about wine (albeit with good reason) it’s easy to forget that for even the most impassioned winemakers, it is a business. Far more people do it to support their families and to earn a living than those who do it for prestige or fun. Yet for all of that, most people describe their work in wine as a labor of love. There’s a saying that goes something like “the best way to make a small fortune in the wine business is to start with a large one” and so it is extremely rare to hear of someone starting a winery as a pure business proposition. That’s not to say it isn’t common — I’m sure it’s more common than we’d guess — but my point is that you just don’t really ever hear of it. Even those wineries that are more businesses than they are artisans make a good show of playing up the passions, terroir, and personal dreams behind the wine.
Talking with Winemaker and CEO Reed Renaudin of X Winery is a startling experience precisely because he is so firmly embedded in the business mindset, rather than in the romance of wine. Now this is not to say that he isn’t passionate about the magic of wine — quite the contrary — he’ll easily wax poetic about a nice bottle of Chassagne-Montrachet and a conversation with friends. But when it comes to his winery, it is first and foremost a business and it always will be.
Maybe that’s because the whole thing started as an MBA thesis during Renaudin’s graduate work at Cal Poly San Luis Obispo. After working for wineries as large as Gallo and as small and specialized as Heitz Cellars, Renaudin went back to get an MBA and started thinking about ways to make advances in both the technology and business operations of winemaking. In looking at the wine industry in California he saw two disturbing things: the technology usage and efficiency of most wineries were woefully behind the times, and that wine prices, especially in Napa, were heavily inflated simply because they carried the Napa name.
So when it came time to come up with a final project he decided to write a business plan for a winery that would fix both problems. Which is to say he wanted to make reasonably priced (under $20) Napa wine with the best technology, operations, branding, and sales organization available. And, oh yeah, be profitable at the same time. The business plan was well received by the faculty and his advisor, and so the next logical thing was to send it out for funding.
“We sent it to maybe 100 people, unsolicited, and never expected to hear a thing. The whole plan was based on a ridiculously low amount of financing. But maybe that was what got people interested, that and the fact that the plan showed that this type of winery could actually make money,” says Renaudin.
Surprisingly to everyone, people started lining up to fund the venture and Renaudin was quickly faced with the unlikely problem of having his academic exercise become real life. He never looked back.
The first steps of the business plan involved getting his hands on some grapes and someplace to make the wine.
“At the time people were paying astronomical sums for Napa wines, and as a result a lot of people were buying vineyards and just leasing them out, but in doing so they had to take on the responsibilities of managing those vineyards, which wasn’t cheap and wasn’t easy. What we did was look for vineyards with absentee owners and propose that we not only lease their vineyards, but take over the entire viticultural operations for them. We brought in our own vineyard management and viticulture experts, and these people didn’t have to worry about anything,” says Renaudin. This meant, in effect, that Renaudin didn’t have to pay retail prices for Napa grapes. Coupled with the leasing of winemaking facilities from a small winery that wasn’t doing well economically, Renaudin was quickly producing wine at what he anticipated being the sweet spot of quality vs. cost.
Several years later, X Winery (so named because he and his staff liked the “x” marks on the list during their brainstorming session better than the names they had come up with) buys grapes from several growers, dropping any that don’t hold up their standards of quality, and has made enough money to cover their very own production facility. They have a broad portfolio of value priced wines and one higher end wine that was also part of the initial business plan, says Renaudin, “as a way of hedging our bets.”
The winery continues to be squarely focused at what Renaudin calls “consumer friendly” wines.
“It’s a constant struggle to figure out what that actually means,” says Renaudin. “We all spend a lot of time talking with people and going to tastings to asking people what are their favorite wines and why. You can think about it as sort of building a giant database of taste and then trying to match our own winemaking against it to appeal to the largest number of people. We want to be very user friendly.” What this means for X Winery ultimately is trying to be the answer for people who want a product that they think is a good value: high quality, and worth paying a few dollars more than a $10 supermarket wine.
In my opinion, they’re not far off the mark. The winery has a pretty solid portfolio of wines, none of which are crap, and a few of which are actually quite good. Additionally, I’m pleased to see that they are experimenting with alternative packaging, including screwcaps and box wines (even though the one that I tried was spoiled). Renaudin seems to be running a successful business, and if they keep producing quality wines while making good amounts of money you can bet that they’ll be around for quite some time.
Here’s their current lineup:
2003 X Winery Chardonnay “Two Rivers Vineyard,” Napa
Light yellow gold in the glass, this wine has a meadow-like nose of warm flannel, dry wheat, and golden delicious apples. In the mouth it sits a bit forward on the palate good acidity and rather focused flavors of vanilla and citrus zest that lack a little dimension in the back of the mouth and through the finish. Score: 8/8.5. Cost:$ 12
2003 X Winery Pinot Noir, Carneros (Napa)
A medium garnet color, this wine has a nose dominated by cranberry aromas couple with light floral and grape juice overtones. In the mouth it is a classic cool climate pinot, with “bluer” fruit flavors of black raspberries and pomegranate that dance lightly towards a surprisingly good finish, albeit lacking a little tannic structure that would have made this a more sophisticated wine. Score: 8.5/9. Cost: $18
2003 X Winery “X Box” Sauvignon Blanc “Eutenier Sylar Vineyard”, Lake County
Unfortunately I am unable to rate this wine as the box I got was spoiled. I called the winery and apparently they have some problems with this vintage throwing protein deposits in the box, but apparently they have corrected this issue.
2003 X Winery “Red X” California Red Blend
Dark garnet in the glass, this wine has a surprisingly light nose with aromas mostly of plum. In the mouth it has a nice lively acid backbone but is a little one dimensional in its flavors which seem to center around tart plum. A pleasant drink, but not particularly compelling as a wine. Score: 8. Cost: $10
2002 X Winery Merlot, Napa
Dark purple in the glass, this wine has a nose filled with aromas of ripe plums, chocolate, and cherries. In the mouth it has surprisingly thick tannins that are kept relatively well in check by a good amount of acid, making for a fairly well balanced wine that has primary flavors of plums and light spices that follow through to a reasonable but unremarkable finish. Score: 8.5/9. Cost: $18
2002 X Winery “Tri-County” Cabernet
Made from grapes that are sourced 18% from Napa, 20% from Sonoma, and 62% from San Luis Obispo, this wine is a medium garnet color in the glass. The nose includes aromas of blueberries and blackberries as well as a little bit of green wood. In the mouth it has blackberry and cherry flavors and a little twiggy greenness and some tannins that pile up in the front palate but don’t support much of a finish. Score: 8/8.5. Cost: $16
2002 X Winery Cabernet, Napa
This wine is a medium ruby color in the glass and has a nose dominated by aromas of blueberries, chocolate, black cherries and the slightest hint of black truffles. In the mouth it is all cherries and chocolate, with some notes of mint and anise in its moderate finish. The light tannins and decent mouthfeel are balanced by a reasonable acidity making it a very easy wine to drink. Score: 9. Cost: $18
2002 X Winery “Syrahtica” Syrah, Napa
Medium garnet in color, this wine has a heady nose of candied cherries and syrup, with elements of vanilla and chocolate. In the mouth it has a lot of cherry flavors as well as blackberry, and as a result is lacking a little of the strong varietal characteristics I look for in a Syrah. That having been said, it’s a decent wine. Score: 8.5. Cost: $??
2001 Amicus Wine Cellars “Amicus” Cabernet, St. Helena
This wine is a deep dark purple in color, very inky and in the glass it has aromas of black cherries, chocolate, vanilla, and hints of tobacco. In the mouth it first demonstrates a lively acidity, and juicy flavors of blackberry and black cherry laced with nearly imperceptible tannins. The wine has nice balance and is a bit lighter in flavor than the color and nose would have led me to believe. It will age well for a few more years, but my sense is that this one won’t improve much after that. It’s drinking just fine right now. Score: 9/9.5. Cost: $49