With 30 generations in the wine business, the Frescobaldis have a long-term view of the wine business.  This mindset has enabled Ornellaia to become a global icon.  Lamberto Frescobaldi, President of Frescobaldi, discusses how Ornellaia established and maintained its status as a global icon. 

Detailed Show Notes: 

Background: grew up in the Italian countryside, studied at UC Davis, learned the wines of the world working at Corti Bros in Sacramento

Frescobaldi family

• 30 generations in wine
• Now in Tuscany, Northern Italy, Oregon, & Sicily
• Focused only on wine

Ornellaia overview

• Cabernet Sauvignon, Petit Verdot, Merlot based
• Bolgheri not historically known as a wine region, not good for Sangiovese
• Sassicaia, Orenellaia, & Masseto put Bolgheri on the map
• From year 1, quality was consistently good
• Founded by Antinoris, Mondavis invited Frescobaldis to partner (Feb 2002), when Mondavi sold to Constellation (2004), Frescobaldi bought out Ornellaia (April 1, 2005)
• Frescolbaldis have long-term view, have owned Castiglioni since 1052

Distribution is mostly allocated due to limited quantities

• Consistent in giving allocations to people who bought the year before
• Grew distribution globally to maintain scarcity
• Focused on top restaurants first, get in the right accounts

3rd party validation (wine critics, famous artists, top restaurants) key to building reputation

Vendemmia d’Artista

• Great artists interpret the wine
• Each vintage given a name (e.g. - power, elegance)
• Partnership w/ the Guggenheim globally introduces wine to art collectors
• Artist label on large formats and 1 bottle of each 6 bottle case

Ornellaia Blanco

• 1st planting by Antinori was Sauvignon Blanc
• Cooler, north facing site, small amount produced
• Aged same amount of time as red, not aromatic, but complex

Monitors secondary market to help learn about wine’s age ability, if prices dropping, implies inability to age

Not sure if people buy Ornellaia from seeing it on social media, but allows winery to connect directly to customers

Negative macro market conditions and trade wars not impacting Ornellaia much, 3rd wine (Le Volte) more susceptible, but haven’t seen impact yet

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With over 40 years of managing some of the top names in wine (Opus One, Mondavi, Baron Philippe de Rothschild), David Pearson, President of Joseph Phelps, has developed a distinct point of view on how to build a globally iconic brand. Ultimately, it comes down to relationships and the effort required to maintain them. From focus and prioritization to spending upwards of 65% of time on the road, David hopes more wineries will follow in his footsteps to build the category of Napa and American wines globally.  

Detailed Show Notes: 

David’s background: started as a winemaker (Europe, SoCal), sensory evaluation for Hublein (now Diageo), post-MBA marketing job with Baron Philippe de Rothschild, Mondavi in France (see Mondovino movie), managed Byron, then CEO of Opus One, now President of Joseph Phelps

The goal is to create personal relationships and care about mutual success and partnership with accounts

“Focus is the hard part” - at Opus, initially London, Hong Kong, Japan; then emerging markets, Mainland China, Dubai; Phelps also prioritized Korea

• Singapore distributor told him, “We’ll see you in 5 years, the French come every year.”
• Track people who buy wine and meet w/ them - 80/20 rule, focus on the top 20% of trade accounts
• After the top 20%, do second tier of accounts, then collectors
• Travelled ~65% at Opus One
• Budgets ~20-30% of marketing expenses for building relationships
• Opus One 1st 10 years - went to Asia, Canada, Europe every year, then put someone in Tokyo and Hong Kong
• Sends ~400-500 handwritten holiday cards to partners with specifics about their last visit
• Travel team includes a winemaker if they like it and are good at communicating, and a marketing team to better understand the market
• Please don’t make it feel anonymous, but give the meetings and message personality
• At Phelps, focused on Insignia and current vintage, show older wines to show aging potential

The goal is to expand export to ~30-40% in 10 years vs. 12-13% of Insignia today

Brands need to think deeper about what’s unique and also where they are going

• Get alignment between the story, the wine in the market, and where you’re going

The winery owner had three objections to export:

1. sell all the wine to US customers, don’t want to take any away from them
2. don’t know who to sell to
3. don’t want to spend the time and money to go there

Larger volume wines have different commercial relationships, same elements (knowing your partners, need to build), but margins tend to get squeezed

Believes that if the category is successful (e.g., Napa), everyone will be more successful

Negociants (La Place) respond to existing market demand well and are efficient distributors, but it is not in their DNA to build brands

Phelps uses the LVMH distribution network to build the brand and deliver directly to the core accounts

Measures quality of relationships w/ initial feeling, but then seeing the wines go to the market, need to see forward momentum

Tracks Liv-ex pricing a lot, seen upticks in Insignia

Other marketing elements: relationships happen over multiple channels now, need to do more social media, and be part of the discussion

The pricing goal is to have trade and consumer connect the innate value of the wine to the price

The current neo-prohibitionist environment recalls the 80s and the “Mondavi defense” of wine as a potential solution

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Pairing their need for a complex substitute for wine, for both pregnancy and professional network, Maggie Frerejean-Taittinger and friend Constance Jablonski enlisted Maggie’s husband, Champagne and Cognac winemaker Rodolphe to found French Bloom.  With four years of R&D prior to launch and constant refinement since, French Bloom aims to redefine the alcohol free premium sparkling wine space.  Maggie & Rodolphe delve into the creation of French Bloom, exploring its core markets, target customers, and the factors that have drawn them in.  

Detailed Show Notes: 

French Bloom overview

• 500k bottles (2024)
• Created a premium NA sparkling category
• Focused on sparkling to create complexity, can play with layers
• LVMH minority investor

4 years of R&D to get the desired quality

• De-alc process loses 60% aroma (was 90% in 2021), removes the backbone of the wine
• Built NA wine like Cognac, needs an undrinkable base wine
• Focused on the South of France (warmer, higher alcohol and body) for stronger wines, more body, Languedoc (more organic 40% vs 3-4% in Champagne)
• Limoux is the best place for NA sparkling, 300m high, Chardonnay and Pinot Noir, a temple of natural wine
• Base wine is a bit oxidative, very acidified (used to add lemon juice, now naturally from wine), oaky (new oak, foudre), no sulfites, more tannin
• Create blends of different reserve wines

Extra Brut (0% abv, 0 sugar) has a base of 30% reserve wine from 2 years, aged in new oak barrels to give more structure

Better to make adjustments before de-alc vs after

Use voile to protect wine from oxidation (like Jura)

Flash pasteurization is used b/c no abv, sulfites to protect the wine

NA market

• Wine, beer, spirits - $10B (2020), $20B (2025), believes $30B (2030)
• Premium NA sparkling - $0.5B (2025), could double next 5 years
• Holy grail is quality NA still wine, not there yet
• Best distributors are wine / Champagne distributors, Thailand/Belgium have NA-focused distributors

French Bloom customers

• Biggest markets are Champagne markets (France, US #2, UK, Japan, Australia, Belgium, Germany)
• Younger (25-45), skew female, appreciates both alc and NA sparkling wine

Sells 20% DTC globally

2024 NielsenIQ study on NA purchase behavior - #1 driver - for conscious hosting (aligns w/ French Bloom’s ethos of not excluding anybody); #2 health & wellness; #3 driving

Marketing is digital first, leveraging Constance as a tastemaker and key opinion leader

More partnerships - Coachella, French Open, just signed F1 (10-year partnership, 1st ever official NA sparkling wine, Moet Chandon on podium; F1 new fans are 75% female, 50% Gen Z from Netflix series)

Most effective marketing has been the founding story and authentic storytelling (i.e., Maggie’s pregnancy, Constance’s need for moderation while networking)

Marketing through top-tier restaurants, hotels, and shops (e.g., Michelin-starred; became the #1 wine sold at Erewhon in 1 week)

Michelin-starred restaurants have 50% non-drinkers at lunch, 20% at dinner

No sugar, no additives, organic messaging plays well in California, less on the East Coast

Uses the term “alcohol free” vs. “non-alcoholic”

NA trends around NA wine & food pairing, including “moderate pairing” (wine & NA wine/drinks as part of pairing); mirrored cocktails (3 versions ofthe same cocktail - NA, low, full)

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Selling the very rare, collectible wines of the world, Adam Bilbey, SVP, Global Head of Wine & Spirits for Christie’s, has a unique view into the state of the wine collector. Adam maps the thought processes and changes in attitude of buyers and sellers of rare wine globally, and he is seeing “green shoots” in the market by mid-2025.  

Detailed Show Notes: 

Adam’s background - started w/ Berry Bros out of high school (2000) at Heathrow Airport shop, moved to Hong Kong in 2010 w/ Berry Bros, Sotheby’s in 2015, Christie’s in 2021

Christie’s is known for fine art, and wine is part of the luxury group (jewelry, handbags, cars), which is 20% of sales, and wine is 10-20% of luxury sales

2025 wine auction market

• Christie’s up 2x YOY Aug YTD, big single-owner sales (e.g., Bill Koch)
• Challenging market mid 2022-2024, newer vintage prices dropping more, more supply available
• In a downturn, buyers’ price expectations fall faster than sellers’
• “Green shoots” in 2025, pricing bottoming out

Burgundy has taken share from Bordeaux last 5-6 years, Champagne came up and leveled off, Italy is strong in the US but not in Asia, Burgundy is strong in Asia, but leveled off

Interest in more mature vintages, particularly Bordeaux, is still valued there

Focus on provenance, people won’t bid on poor provenance anymore

• 2-tier pricing, people paying for a premium for a great collection, single-owner sales, they like the story of who owned the wines

With a more global market than ever, people buy from anywhere

• The US has a broader selection
• Everyone buys from the UK
• Asia tends to need more focus (e.g., Burgundy)

Liv-ex shows -10% pricing last year, -20% last 2 years; auction prices move gradually, often lots don’t sell

More Millennials and Gen Z customers (45% 2025 from 30% 2022)

Female customers have been consistent last 4-5 years, a slight dip in the US, and growing in Asia

Younger generations are drinking younger wines, they like the security of younger wines, have a fear of disappointment in older bottles

Online auctions require ease of use

• Christie’s does 2x online auctions vs live
• Live auctions for key moments, key collections
• Various owner sales in online auctions

Provenance is improving with more communication (e.g., purchase & storage records), people working together (merchants, auction houses), and technology (digital microscopes, UV light, carbon dating)

Provenance is critical, as people remember the bad bottles sold to them over the good ones

Believes China will make a comeback in the next 2-4 years

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Making wine is capital-intensive. Making traditional method sparkling wine is even more so. From less juice from the grapes to double fermentation to more expensive bottles and taxes, Weston Eidson of recently launched Westborn Wine describes the differences in sparkling production.  

Detailed Show Notes: 

Weston’s background: >10 years winemaking in Napa (Silver Ghost), family are wine collectors, interned w/ Jason Moore at Modus Operandi (2012), and acquired extra Chardonnay from Steve Matthiasson

Westborn was founded in 2018, taking “Grand Cru” or single vineyard level fruit for sparkling wine (e.g., Heintz, Ritchie, Durell vineyards)

Partnered w/ Russell Bevan (mentor) and Nathan Reeves (made sparkling in Margaret River)

The goal is to start with high-quality wines and layer on complexity with traditional method aging

Took 4-5 years to find a stride & hone the winemaking process

Initially thought it would be 3 years aging vs 6 for 1st release (2019 1st release; 2018 1st vintage just disgorged mid 2025)

SKUs: vintage, Blanc de Blanc, Rose, Non-vintage

Luxury priced - $100+

Solera method perpetual reserve program, late disgorged release, lead to a lot of capital in inventory

2018: 500 cases; 2025 ~1,000 cases; target ~2,000 cases

Sparkling production costs vs. still wine

• Fruit costs the same (growers love it: less shrivel, gets fruit off earlier - less pest/disease pressure; spreads out the work)
• Press cuts important, ~25% less gallons/ton vs still wine, as they don’t take taille
• Need to make the wine twice: initial fermentation (vin clair), secondary fermentation (bottled with yeast and sugar)
• Custom crush costs are slightly more expensive due to double fermentation
• Bottles are more costly and need to be bought earlier (~$0.15-20 for a standard bottle; ~$1 for sparkling)
• Taxes higher: $2.40/gallon for sparkling wine, $0.07/gallon for still wine <16% abv
• Storage and financing costs are higher

Financing is combined with other brands, which may make it hard to start a sparkling brand as a stand-alone entity

Look at the business plan over 20 20-year time horizon, projecting cash flow positive in 2027 (9 years from founding)

Trends underpinning Westborn strategy: following Michael Cruse w/ grower CA sparkling wine, premiumization, sparkling doing relatively well, sparkling being used beyond celebrations

Take inspiration from Bereche, De Souza (lees stirring in bottle to amp up umami), and Selosse

People looking for experiences have a tasting at The Art Collective Napa Valley

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It’s a cycle that has been happening since the late 1800s. The need for agricultural labor in California is a cycle of bringing in labor and then deporting them when they become too visible. Elaine Chukan Brown, wine writer and author of recently published The Wines of California, describes the history, current situation with new regulations and deportation, and the tension put on vineyard workers’ wages in California and their impacts on the labor market and vineyard workers.  

Detailed Show Notes: 

The Wines of California covers 3 sections: 

• How we got here - the history and what context allowed things to happen
• Where we go - the growing regions and key producers
• What we’re facing - marketing challenges, climate change

Interest in farmworkers started with Salud, a medical program for vineyard workers and their families

• Has mobile and physical clinics
• Successful because it provides care for workers and their families

CA is the largest farm region in the US

• Exports 40% of ag production
• Became nationally relevant in the 1900s, which led to the need for farm labor

Sources of farm labor (in chronological order)

• Indigenous people (until smallpox outbreak and reservations)
• China - exchanged labor for citizenship, after 10-15 years, expelled Chinese with the Chinese Exclusion Act
• Japan
• India
• Black sharecroppers from the South (small group)
• Mango (Philippines)
• Mexico (post WWII) - led to the current H2A program

When labor populations grow and get too big, they are expelled, which has been in ~20-year cycles

H2A Program - temporary work visa program

• Cannot be extended or transferred to another employer
• Employers must provide housing & transportation
• Biases towards big business to deal w/ compliance

FDR (1930s/40s) - Labor Protections Act created worker protections, but excluded agriculture

United Farmworkers (1975) - 1st farmworker protection legislation

Association of Farmers - farm wonders banded together to have more leverage against workers

Ever-growing CA labor regulations create large compliance requirements that end up favoring big business

Current system sets up farm workers’ wages as the only lever for farm owners to maintain profit margins and be economically viable (w/w/o gov’t subsidies)

New CA farmworker overtime pay law - 8 hours/day, 40 hours/week before overtime

• Derived from an office worker’s perspective
• Does not match the seasonal work of agriculture
• Employers have small margins, can’t afford overtime rates
• Workers make less money and need to get 2nd or 3rd jobs
• If workers get injured at 2nd job, workers’ comp does not cover wages of the main job
• Employers need to find more workers to do the same amount of work, and lose the experience and skills of the current workforce

Many crops (e.g., strawberries, peaches) need manual labor and can’t be mechanized

ICE raids & deportations: not a new thing, but what’s new is people with documentation (visas, amnesty recipients, citizens) are being detained and deported

• Creating fear, workers not showing up to work (some regions report a 70% drop in workers)
• Workers not going to farms on main roads (too visible)
• Families choose 1 member to go ot work, the other stays home to take care of the kids
• Historically, when the safety of workers is an issue, workers don’t respond to higher pay

US tariffs increase prices to consumers, decreasing sales; it may take decades for consumers to substitute for domestic wines

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With a large domestic market for wine, US producers often don’t focus a lot on exports. Honore Comfort, VP of International Marketing for Wine Institute, lays out the benefits and challenges of exporting wines globally. She covers the top markets for US wine globally, the role Wine Institute plays in helping US exports, and the potential impacts of the current trade war.  

Detailed Show Notes: 

Wine Institute overview

• Members are CA wineries (>1,000)
• Public policy organization focused on legislation (e.g., DTC shipping)
• Member dues are a sliding scale (based on prior year revenue & volume), baseline is a few hundred dollars

CA is the 4th largest wine region in the world after France, Italy, and Spain

• Largest market in the US
• The US market is 75% domestic (80% from CA), 25% imports
• Export is 4% (by value), 95% is CA
• Traditionally lower-priced wines, now a barbell (both low and high, but not mid-priced wines)
• Other countries have high taxes, duties, and tariffs on imported wines (int’l pricing often 2-3x US retail, 10x for India)

Cost to produce is high in CA (heavily regulated - environmental & labor force protections; land costs high)

Goal to showcase the diversity of CA wine globally, but only a sliver is available 

Key int’l markets - Canada (#1 until Feb 2025; ~30% of US exports - premiers took all wine off shelves as part of trade war); Europe #2 (Germany is hard w/ strong domestic, low priced market; Scandinavia big); UK #3 (punches above its weight as oldest wine market, lots of wine writers, critics, traders; one of the broadest selections of CA wine); China, Japan, Korea, Mexico

Wine Institute has active programs in >30 countries for CA wines

Benefits of exporting wine: importers sell wine for you (no 3-tier system like the US), build brand visibility, position wines next to other great wines of the world

Challenges of exporting wine - takes investment, needs face-to-face storytelling

Small Napa producer (<5k cases) now exports 15% of sales working w/ Wine Institute

IWSR creates an index ranking all wine markets globally on attractiveness (2024 - US #1, Canada #2, Switzerland #3 - a small country, but strong wine culture and high value wines)

EU subsidies are pervasive (e.g., bottling line, materials subsidies, marketing support (Italy $150M/year), buying excess bulk wine), but hard to get complete info

The US has less support for alcohol (USDA has $8M/year for CA wine); wine is the highest value US export, but low in total value

Trade war impacts

• Market uncertainty has many importers not wanting shipments on the water
• Cost of input materials (e.g., steel, oak barrels) up
• Prior administration not interested in addressing trade disparities, potential to open up other markets (e.g., India - 150% tariff on alcohol, #1 whiskey market, #5 beer market; Vietnam; Thailand)
• Attitudes towards the US impact business (e.g., Denmark dislikes threats on Greenland, reducing US purchases; China is not a factor; Vietnam and Korea are positive on US products)
• Hong Kong’s move to 0% taxes on wine led it to be a hub of CA wine in Asia
• In 2019, China's tariffs on US wine plummeted business

Wine Institute promotes “0 for 0 tariffs” - keeping wine out of trade disputes

Major policy priorities: US dietary guidelines (on alcohol), getting wine back on the shelf in Canada, Ingredient & nutritional labeling, CA bottle bill on recycled glass, and environmental regulations

“Share Wine” program - building understanding, community, and engaging with wine consumers, focusing on 25-45 year olds, centering on relationship w/ technology

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As one of the major players in value wine, owning Charles Shaw (aka “Two Buck Chuck”), Bronco Wine Co.’s new CEO, Dom Engels, believes that the wine industry needs more innovation and focus on creating new entry points for younger consumers. From packaging to labels, Dom discusses how he’s navigating Bronco through the turbulence of a shrinking market for value wine from both the cost and innovation side.  

Detailed Show Notes: 

Bronco - Top 15 winery, owner of Charles Shaw (aka “Two Buck Chuck”)

• Has its own CA distribution
• House of >200 brands
• Large winery in Modesto, bottling in Napa, a boutique winery in Santa Rosa
• Owns ~40k acres, ~30k acres vineyards, but farming <10k today
• Owns Bivio, a logistics company

Charles Shaw

• No created by Bronco, acquired by Fred Franzia (co-founder of Bronco)
• Was a successful, premium, luxury Napa brand, 1st vintage 1978
• Went bankrupt in the 90s, Bronco bought the trademark in 1999
• 1st product in 2022 - $1.99 for good quality wine
• Low pricing enabled by low margins and Fred Franzia’s “genius” in bulk wine trading
• Partnership w/ Trader Joe’s through shared belief in creating accessibility and substantial cultural overlap

Believes the industry needs more good entry-level wines to get younger generations a start in wine

• The ethnic makeup of younger people is not the same as that of older generations
• “Not your father’s Cadillac” - young tend to rebel against what their parents did
• 11,400 wineries in the US create a diffuse set of interests, a lack of clear messaging (e.g., craftsmanship, agriculture) to separate wine from alcohol
• Accessibility could be driven by the right packages (including formats) and labels; good labels drive trial, good liquid drives repeat sales
• Significant marketing spend is difficult due to low margins
• Industry covers the right price points (e.g., Charles Shaw $3.49 in CA), but needs other elements, not a lot of great innovation or marketing at low price points (some pockets of innovation, e.g., XXL focus on high ABV)
• Need more transparency - ingredients, nutrition, ownership, provenance - Bronco is adding more back stories to brands

Enhancing social interactions is important; e.g., Jack Daniels’ ad that getting together with other people is healthy too

• New Bronco company motto, “better times at every table,” similar to Pernod Ricard’s “conviviality”

Believes dislocation of restaurant price vs retail is a core driver of wine industry decline, $14 IPA and $25 cocktails make people drink less

Navigating lower volumes requires being more efficient, sees opportunity in winemaking (most capacity utilization at wineries now <50%), distribution (reduce inventory), and retail

Likely too many brands in the US and too much shelf space in retail

Mothballing a lot of vineyards due to oversupply

• Can’t bring back in 1 year, but can in 2-3
• Cut buds down so vines don’t produce fruit
• Still requires some maintenance costs
• Vineyards in less optimal areas are to be pulled first, and he does not believe there will be an overcorrection

Competing in value vs international

• Can’t compete on labor
• Need to compete on quality, provenance, and taste
• Even tariffs won’t solve the cost gap
• EU subsidies help democratize wine

Tariff impacts

• Some input cost increases (e.g., China for glass)
• A good thing overall for the US industry, which will lead to more US wine being consumed
• Likely no structural change

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In an oversupplied market with rising costs, being a winegrape grower is probably the hardest it has ever been. Natalie Collins, President of the California Association of Winegrape Growers, breaks down the cost of winegrape growing in CA, the challenges in the marketplace, and the policy dynamics in the US, CA, and EU that continue to exacerbate the challenges for CA’s winegrape growers. 

Detailed Show Notes: 

CA Winegrape Growers - based in Sacramento, lobbies at the state and federal level

• CA has ~5,900 winegrape growers and 550k planted acres

Key cost drivers of winegrape growing

• #1 labor, ~45-50% of budget (30-45% CA interior, 45-65% CA coast); doubled in the last 10 years, driven by:
• High min wage ($16.50; most pay $18-30/hr) → increases take entire pay curve up, not just bottom
• 2016 labor law change reducing hours before overtime pay → reduced farmworker take-home pay (OR provides an overtime tax credit to employers)
• #2 regulatory compliance (water, air, worker health, safety), ~10% budget
• Cal State SLO study on lettuce growers - compliance costs ~$1,600/acre (1,366% increase since 2006, 637% since 2022)
• #3 land - CA has some of the highest land prices in the US 
• #4 crop protection/fertility tools
• Farming costs ~$4k/acre Central Valley, $6-8k/acre Paso Robles, $8-10k/acre Sonoma, ~$10-17k/acre Napa

Grape pricing not rising w/ input costs - Central Valley ~$500-600/ton, Central Coast ~$1-2k/ton

• Bulk wine from Chile is cheap, and the US can’t compete on price

The annual CA Winegrape Crush Report shows pricing for all varieties by district

• No US federal support vs EU
• EU subsidizes at every level (growing, marketing, production)
• >e2B/year in direct and local support, enabling cheap wine production
• Crisis distillation - buy surplus wine to convert to alcohol (e.g., hand sanitizer)
• Vineyard removal and vineyard planting subsidies
• Aggressive marketing support (France investing $5B to support wine exports to the US w/ new tariffs)

US wines can have up to 25% foreign wine blended in and be labeled as US wine

2023-2024 - CA left ~300k tons/year on the vines; 2025 ~50% of vineyards don’t have a contract for the 2025 harvest; industry calling for another 50k acres to be removed (60k removed since 2022); all regions pulling out or mothballing/minimally farming vines

Tariff impacts (May 2025)- input costs increase, but can be positive for CA winegrape growers

• 2019 tariffs saw domestic wine increase its share by 10% vs EU wines
• Canada is actively removing US wines from shelves in retaliation; the US exports 10% of its wines, 40% to Canada

Deportations - creating fear, people are afraid to leave their homes for fear of their families getting separated

Seasonal labor is not big, 90% vineyards are mechanically harvested; H2A temporary workers (mostly from Mexico, all-in cost ~$30/hr, often more productive, cannot be paid more than domestic workers)

Economic impact of CA wine - 422k CA employees / 1.1M across US, $73B CA economic impact / $175B/year US

All agriculture is struggling in CA, replacement crops for grapes not easy (some almonds, pistachios, cherries); costs ~$30-70k/acre to plant a vineyard

Duty Drawback - a federal tax refund program meant to encourage exports

• If a winery exports wines, then imports them back, it gets 99% of import fees (including the Federal Excise Tax of $1.07/gallon) refunded
• If importing ~$3/gallon bulk wine, can save ~30%
• Mostly used by the top 5 wine companies
• 2024 - 38M gallons bulk imported (70M in 2022) vs ~70M gallons left on the vine in 2023

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Having met at the UC Davis Wine Executive Program, Kia Behnia, CEO, and Mason Earles, CTO, founded Scout to replicate the best sensor in the vineyard, “the farmer’s eye.” Leveraging off-the-shelf hardware, Scout uses AI to process images taken from a tractor to automate vineyard mapping, vine counting, yield forecasting, virus identification, and more. From managing vineyard assets to implementing precision agriculture to improve quality, Scout is harnessing the power of AI to optimize vineyard management.

Detailed Show Notes: 

Mason’s background - UC Davis Professor, Apple, AI & agriculture

Kia’s background for Scout - owns the Neotempo wine brand, worked at Splunk, the “data for everything” company

The official company name is Agricultural Scout, dba Scout, the website is agscout.ai, so it can be called any of those names

Founded in 2022, initially more hardware-based, but pivoted to an intelligence company using off-the-shelf hardware

The goal is to “replicate the farmer’s eye” with an AI-based solution using cameras, tractors, and Scout cloud and mobile app (which can be used offline); the brain is centered around a phone

US only today (~50-100 clients, 300 blocks, 2M vines, processed 56M photos), going international in 2026

4 main use cases currently: 

• Automate vine count, inventory, and mapping of vines - 4x faster than people could do
• Estimate crop performance - both vigor and fruit
• Yield forecasting - can use every step in the growing season to forecast yield with historical performance and weather forecasts
• Health performance and vine mapping - leveraging AI for virus detection

3 types of clients

• Estate wineries
• Vineyard management companies (“VMC”)
• Real estate investors or owners to track vineyards

Benefits include: 

• $400-1,200 savings/acre
• Productivity gains through managing more acres with fewer people, identifying low-performing vines, and the program tells farmers where to sample
• Remote monitoring of faraway vineyards
• Early season yield forecasting
• Disease management - virus can cause $170k/acre damage over 3-5 years, costs $40/PCR test, the goal is to keep virus <15% not to lose the whole block, has a 7,000 photo database on vine disease

Bench Vineyards discovered 1 acre of missing vines out of 24 acres and filled them in

Pricing is a subscription model, $150-180/acre per scan

• Volume discounts >50 acres
• Neighborhood and AVA discounts
• Starter - 2 scan package (for inventory and virus)
• Professional - 6 scan package
• Typical customer starts w/ 2 and upgrades to 6
• Monarch promotion, customers get 1 free scan
• Up front hardware costs ~$3,000

New product in beta in July 2025 - ChatGPT Scout for vineyards

Marketing mostly through word of mouth, industry trade shows, and webinars have been effective, as has partnership with Monarch (already tech enthusiasts)

Barriers to purchase are often due to farming budgets built around labor

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From 200 mph electric cars to 20 mph electric tractors, Praveen Penmetsa, CEO of Monarch Tractor, leveraged his passion and expertise in vehicles, robotics, and batteries to develop the first smart, electric tractor. Making farmers more profitable and efficient first, and then sustainable, are the core tenets that drive Monarch’s business. Praveen discusses the core benefits of using an electric tractor and how it works with farmers to take advantage of government incentives, making farming more efficient and cost-effective.  

Detailed Show Notes: 

Praveen’s background: mechanical engineering, loves fast cars, worked on electric vehicles, robots, and battery systems

Founded Monarch in 2018, the company is currently the only company selling smart, electric tractors

Now on four continents, with most sales in the US, pilots internationally

Solution is a smart electric tractor with an app and piloting autonomous driving

• Fits in 5’ rows
• Runtime 10-14 hrs for pushing, 8-11 hrs for mowing, 4-6 hrs for heavy operations; takes ~6 hours to charge

Core markets - vineyards #1, dairy #2, orchards, horse ranches

Core benefits

• Save $7-12/hr on diesel savings
• Remote service and support, day and night - can submit a service ticket on the machine and get help remotely
• Product gets better over time with SW updates (e.g., released the ‘row follow’ feature)
• Can power other things, be used like a generator (e.g., night lights for harvest)
• Easier to train operators (smart screen vs 20 manual controls)
• Environmental impacts - reduces carbon emissions
• With increasing automation (mowing is 1st operation), more labor savings

Autonomous driving has guidelines by CA OSHA (need signs that the autonomous tractor is running and no people in the block), but there are no legal guidelines in other places

Pricing

• $90k baseline price + options + subscriptions
• Gov’t incentives can make it cheaper than a diesel tractor, 20-70% savings
• Monarch helps apply for subsidies, including charging infrastructure and solar installation
• Subscription charge for connectivity and SW has various levels; some charges can be offset by incentives with carbon offset reporting (e.g., Dannon gives dairy farmers incentive payments for the carbon offsets)

ROI driven by tractor usage, payback ~2 years; has an ROI calculator on the website; needs to be cheaper and more efficient before sustainability elements come into play

Most farmers want autonomy to reduce labor costs

Sells through a direct sales team and dealers

Marketing driven by non-electric tractors today, podcasts are helpful, social media, and demos have been very effective

• Social media, primarily Facebook and LinkedIn for owners, Google SEO, and local dealer support
• Demos are essential; most farmers want to try before they buy

Partnering with other companies to use their technology inside, also partnered with AgScout to leverage AI for vineyards

Barriers to purchase primarily worry about service and support, and wanting more autonomy for labor savings

Continuously update both HW and SW on machines, some tractors now close to 4,000 hours of operation (vs. standard tractors need to be replaced after 4-6k hours)

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Drawing on her background in winemaking and Silicon Valley, Ashley Leonard, Founder and CEO of InnoVint, has developed a modern platform that tracks everything from the vineyard to the bottle. From getting granular with COGS to automating TTB compliance, InnoVint gets the winery out of spreadsheets and into a modern, cloud-based, mobile-centric system. This system is designed to accomplish InnoVint’s mission: Helping wineries run better businesses.

Detailed Show Notes: 

InnoVint overview - mobile-driven winemaking platform, tracks and manages all winemaking options, and automates compliance

• >600 winery clients (~80% of wineries still using Excel)
• 92% of clients in North America, 8% International
• Mission: helping wineries run better businesses

TTB requires reporting for producers >500 cases

4 products

• Grow - vineyard tracking platform from the winemaker’s lens; phenology dates, yield estimates, applications, harvest scheduling, historical trends
• Make - winemaking from fruit reception to bottling; work enablement platform with digital work orders
• Finance - tracks all costs associated with making wine, final COGS; the finance team applies overheads
• Supply (2025 launch) - case goods management, inventory tracking, integrates with DTC platforms & distributors, has allocations as a planning tool

Has open APIs; integrates with TankNet and VinWizard for winery automation, receives data back for actions taken; integrates with quality control labs (e.g., ETS) and can take action more quickly

Core benefits

• Key differentiator: profitability per SKU and true COGS/product (w/o InnoVint, calculated once per year)
• Efficiency, working smarter, better decision making, and more transparency
• Reporting to be able to manage quality
• Some wineries use data to track carbon footprint (e.g., water use, weight of glass)
• Reduces the risk of an audit

Compliance reporting (e.g., TTB 5120, export reports) - Gloria Ferrer went from 3 people over 2 days to 15 minutes for 1 person

Larger wineries tend to have more tangible benefits

• Domaine Chandon saved $75k annually by making the workflow paperless
• Patz & Hall saving 40 hours/month

Onboarding

• 5-step self-serve process (vineyard sources, lots, volume, vessels, current inventory) takes a couple of days for small wineries
• Premium package for larger wineries includes team training, and full data migration takes 2-8 weeks

Pricing - SaaS model

• Scales based on size (production) and complexity (# of locations) of the winery
• Not user or usage-based
• Implementation ~$1-2k
• Subscription starts at $2,400/year for a boutique winery for Make

Marketing - “has tried it all”, tries to add value to the end user

• Does a lot of speaking engagements/webinars on being a healthy winery
• Manages The Punchdown, a free digital community that is a peer-to-peer exchange
• Referrals from clients are the most effective marketing
• Launched the State of the Wine Business Health Report (2024) - surveyed with >500 participants
• To reach wineries that don’t go to conferences - LinkedIn/social, co-marketing, financial webinars
• Paid advertising sometimes works, but it's not a top lead generator

Barrier to purchase - resistance to change, case studies help overcome (e.g., Domaine Carneros saw what Chandon was doing and bought the product)

The product roadmap includes Supply module, AI applications, and embedded tools

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Making wine in California, France, and even Serbia, consulting winemaker Julien Fayard has a broad view of the winemaking world. His constant monitoring, evaluation, and investment in winemaking technology benefit both his own and his clients’ wineries. Julien offers insight into winemaking technology on both sides of the Atlantic, as well as some of the specific technologies he utilizes. 

Detailed Show Notes: 

Julien’s background: French, came to the US in 2006 and worked for Phillipe Melka, started his consulting practice in 2013, built two wineries and manages three others; mostly Napa (~85%), but also makes wine from Sonoma, Sierra Foothills, Provence, Bordeaux, and Serbia

Uses trial & error to evaluate new winemaking technology

Usually, a trigger that causes each tech adoption

Hears about new tech from travel and conversations with other wineries and tech companies

French tech is mostly involved with wine contact (e.g., yeast, oak treatment), the US is mostly logistics, mechanization, automation of labor, and CA is slow to mechanize vineyard work

Monitors the slowly evolving knowledge base in winemaking - most tech innovations are slight derivatives of existing knowledge (e.g., sulfur automation)

To buy into a new tech: other people using it, company viability (and ability to scale), practicality of solution (e.g., barrel door for fermentation did not take into consideration time and the challenge to move between barrels)

ROI calculation includes cost savings, risk assessments, and quantity or quality improvements

Generally does not implement things that could move costs more than 10-20%

The most significant variable cost driver is when volume drops (e.g., waste, accidents, filtering, bulking out wine) - each tank is ~$100k of wine

Fruition Sciences did a lot of sap flow analysis, but never got mass adoption

Well monitoring technology is happening, and may be required soon

Communications modules for sensors are getting much cheaper, enabling more tech

Vinwizard (NZ) - wall winery automation

• Started with pumpover automation (temp, speed)
• Can control to avoid peak energy hours
• Can set times for tanks to make temp-sensitive additions easier
• Alarms for glycol system outages
• Arkenstone was 1st Napa winery to adopt, learned from them, a solution more complete than TankNet
• Min ~$50k cost

Innovint - winery SW management system

• Creates all work orders, does costing, compliance, and traceability
• Clients, CPAs, and compliance can see everything
• A communication tool, very user-friendly

Sentia - hand wine analyzer (VA, malic, alcohol, SO2)

• $2k/machine
• <$1/use for strips
• Uses a solid chemical reaction
• “Fragile” tech, 1 in 30 results is way off, researching this with a Phd
• Tried bungs with sensors, but requires a tech breakthrough to work

Oenofrance - a system for faster oak extraction

• Put oak blocks (closest to staves) under pressure to extract oak flavors faster
• $40k in oak to $4k (renting tech)
• Costs ~$80-90k to buy machine

Excited about new destemmers, probes for monitoring wines (for “modern natural wine,” in-ground amphora aging)

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Exactly five years ago, Robert and Peter published the first episode of XChateau! To help us reflect on how the wine market has changed in the last five years, XChateau’s most frequent guests, Amanda McCrossin and Charlie Fu, return to discuss the changes in wine influencing and social media, the wine market upheaval occurring now, wine marketing done right, and wine drinking trends. 

Detailed Show Notes: 

Changes to being an influencer

• AM: did not think TikTok would be big for wine in 2020, built it up in 2021, and created more “snackable content” (<90 sec videos), reaches wider audience (late 20s to boomers, more female) on TikTok
• Influencers are changing, and many get burnt out (including Robert)
• Influencer growth today - e.g., Olivia Tiedemann (@oliviatied) went from 0→4M followers on IG in 2 years, raw, skilled, edgy style caught people’s attention, used collabs to keep growing

Social media evolution

• Things are more video-heavy today vs. the static content of 5 years ago
• Not a lot of male creators (tend to be older, more “academic”), female creators are much better at wine education
• YouTube skews more male, TikTok more female
• Males tend to consume more long-form content, while females tend to consume more short-form content
• IG likes higher production quality, TikTok more “authentic” videos, IG upped video content length to 3 mins
• Rednote (Little Red Book) - a popular Chinese app for local food & beverage recs, particularly in Asian dominated communities

Wine market upheaval

• PY: Anti-health messaging is hitting wine more than other alcohol, reversing the trend of the last 30 years, fueled by the “French Paradox” research on positive heart benefits of the Mediterranean diet
• Premiumization is somewhat continuing - the top 1% are maintaining the high-end market, while others are trading down
• AM: “Wine isn’t cool,” wine is not great at being in pop culture today
• PY: Taylor Swift helping things like Sauv Blanc, but she’s not out talking about wine (AM)
• AM: Wine needs an Alix Earle (@alix_earle) w/ a glass of wine or maybe more medium-sized influencers (100-500k followers)
• CF: Health kick is a major trend impacting alcohol consumption, fewer people at restaurants ordering wine (at least in LA), people pushing NA options
• AM: people not interested in the <$10/bottle category (except things like Kirkland wines), want $30+ bottles but need to sell the wine as there is so much choice
• AM: Wine needs to revamp its merchandising to reach more people (e.g., more by style than varietal)
• CF: High-end wines getting cheaper and more available; when top wine prices fall, alternatives also crash
• AM: No such thing as brand loyalty anymore, NDA wines big for Wine Access (private label w/o being about to say the source)

Wine marketing done well

• CF: Winemakers from Burgundy (e.g., Dujac) are out there a lot more, increasing the popularity of the entire region
• PY: Doing more experiences both at the winery and on the road
• AM: Clean wine movement (e.g., Avaline) has some negatives, but is positive in terms of giving more transparency (what many consumers want these days)
• RV: ingredient and nutritional labeling on the bottle is better than just available on the website; PY: NA wines have full nutritional panels, which could help promote wine’s good sides

Wine drinking trends

• AM: Sauv Blanc is America’s grape right now, theory: women think it’s a healthier option due to its lighter, crisp style
• CF: people not drinking as broadly, but more hyper-focused due to so much available information (e.g., William Kelley and Burgundy); fewer people drinking natural wine

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Spraying for powdery mildew can be ~25% of the cost of farming a vineyard and be one of the key elements of a grower’s carbon footprint. Sarah Placella, Founder and CEO of Root Applied Sciences, has taken her deep research in microbes and created a data-driven solution to monitor the air for mildew and spray only when needed. Root can cut ~5 sprays per season, and growers have an average 5x ROI using the system.  

Detailed Show Notes: 

Root Applied Sciences (“Root”) - airborne pathogen monitoring for farmers, like an “early warning system”

• Founded in 2018, 1st work with/ growers in 2021
• Powdery mildew (“PM”) is a big problem for vineyards in CA (March - August)
• Currently only markets to vineyards, done work with/ strawberries, leafy greens, can do anything with/ DNA and small insects
• Napa, Sonoma, Central Coast today

HW enabled SaaS model - Root owns and maintains devices

• Device in the field, just above the canopy
• Send data (battery status, device status, temp, humidity) to the cloud over LTEM connection
• SW to see the data
• The grower collects samples from devices 2x/week and sends them to the lab
• Growers can share data with/ each other

Has an automated prototype in process

• Will not need a grower to collect and send samples
• Fundraising “seed” round for an automated system

~25% of operational costs are spent managing PM

• 6-16 pesticide applications/season
• Conventional growers have fewer applications, but spend more for each one
• Organic may be spraying every week
• PM takes 7-10 days to enter plants. See 2 peaks of PM before growers can see it, once PM exists, it's hard to control
• Root can cut 20-80% of sprays (~5 sprays/season), lengthens spray intervals when low risk
• ~$100/acre spray cost per application, ~$300/acre if need to spray by hand (e.g., steep slopes)
• 2024 - saw PM on Mar 29 in Carneros, growers planned 1st spray 4/16, moved up 1st spray to 4/2; cut sprays and more clean fruit
• Root data enables more biological sprays (have shorter efficacy windows, are more environmentally friendly, and data gives more confidence to try them)

Other benefits of Root

• Clean fruit - faster fermentation (5 days faster), higher quality, possible increase in yields
• Environmental (less sprays, tractor use) - less diesel use, lower soil compaction; for 1 grower, 1 spray is a 13% reduction in carbon footprint
• Farmworker health - fewer chemicals in the air

Pricing

• $3,000/season/monitoring station all-in
• Avg grower has 4 stations, 1 every ~30-50 acres
• Precision growers or rolling hills, 1 station every ~10 acres

~5x ROI

Barriers to adoption

• Risk aversion
• No access to a carrier to send samples
• Grape prices down (budgets)
• More adaptive sprays can make operational scheduling harder for vineyard management companies

Other PM solutions

• “Spray and pray” (~90% of growers) - calendar-based system
• Weather-based tools don’t work well and may be impacted by climate change
• Spore trapping tools (e.g., spinning rods, roto rods) have sticky material that reduces sample size and efficacy, UV light exposure degrades PM
• Image-based analysis (new) - lots of data to send, samples ~2L air/min vs 400L air/min Root, does not specify type of PM present (~40 types)

Product roadmap - more power efficiency, integrating a solar panel

Has done work with/ downy mildew, botrytis, vine mealybug, and can detect them, but does not add a lot of value

Excited about growth in microbial mildewcides (biologicals)

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With over 1,000 kosher wines from across all major winegrowing regions, Royal Wine is the largest importer (and producer and distributor) of kosher wine in the world. Gabe Geller, Director of PR & Wine Education, discusses the market for kosher wine, how and where it is made, and how Orthodox Jews hear about them.

Detailed Show Notes: 

Gabe’s background, at Royal Wine >9 years, wine industry for 16 years (retail, consulting, marketing)

Royal Wine - world’s leading importer, producer, distributor of kosher wine

• In US, carries >1,000 kosher wines from every major wine producing region
• Owns Kedem, Herzog, and other brands

Can’t taste kosher wine, similar to other wines

• Produced only by Sabbath observant Jews
• No non-kosher ingredients or processing agents (e.g. - fining agents)
• Has kosher certification on the bottle
• Mevushal (“boiled”) - for some kosher wines, uses flash pasteurization which is also used by some non-kosher wineries; tend to taste more approachable initially, but ages longer

Israel #1 producer of kosher wine (~5M cases), USA (~350k cases; mostly Herzog), France (~350k cases across many wineries)

Kosher wine market

• Observant Jews drink kosher wine year-round
• Jews use wine in almost every religious ceremony, considered the “holy beverage”
• Passover 1st night dinner (Seder), every adult is required to drink 4 cups of wine (can by any kosher wine or grape juice), each cup symbolizes 1 way God saved Jews from slavery
• Jews who don’t do kosher normally will for Seder
• 40% of kosher wine in the US is purchased for Passover (used to be 60%, declining as more quality kosher wines available, so more is being bought year-round)
• Top markets - Israel, US (NY/NJ #1, FL, CA - CA Jews drink less wine than East Coast Jews), France

In top kosher markets, large retailers (e.g. - Total Wine) will have a kosher selection, some kosher wine stores, and online retailers (e.g. - Wine.com) also carry kosher

Of the 15.7M Jewish people (2023), only a small portion keep kosher

Some kosher wines sold to the general market (e.g. - Bartenura Moscato #1 imported Moscato the past 15 years, most don’t know it’s kosher; Jeunesse semi-dry wines have a distinct consumer appeal)

Israeli politics / Gaza war have lead to people buying more to support Israel

Marketing to the Orthodox community

• Identify sects with stricter mevushal rules (e.g. - 101F vs 105F) and promote specific brands that meet those
• Print advertising big (English, Yiddish), many do not use as much internet, none on Sabbath, take in news via print
• Whatsapp #1 social media for Orthodox Jews (or Telegram)

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Though one of the oldest wine-growing regions in the world, Israel is still exploring its potential after Muslim rule after World War I. Victor Schoenfeld, Head Winemaker, and Walter Whyte, VP of Sales for Yarden Imports, explain how Golan Heights Winery has set the bar for the quality of Israeli wine and spreads its wines globally, both within the Jewish community and beyond.  

Detailed Show Notes: 

Victor Schoenfeld - CA native, went to UC Davis, recruited to Golan Heights Winery in 1991

Walter Whyte - managed officers’ clubs in the military and learned about wine

Golan Heights Winery (“GH”) background

• Founded 1983 to export wine of high quality
• 26% exported today (production to increase 30%, primarily for export)
• NE Israel, Syrian border, 33rd parallel (like San Diego)
• Volcanic plateau, Mediterranean climate, high elevation (1,200-4,000 ft)
• 19 varietals, known for traditional method sparkling, Yarden Cabernet
• Zelma Long, former consultant
• Price points range from $15 (Mt Hermon) - Yarden Cab ($50) - $80+ - $1,000 (Cru Elite)
• Manage 40% of vineyards (to increase), rest on long-term contracts
• 500 vineyard blocks, harvested & vinified separately
• Has two propagation vineyards and a nursery

Israeli wine history

• Journal of Science (2023) - identified two winegrape domestication events 11,000 years ago - Caucasus (Georgia) and Western Asia (Israel)
• Discovered ~30 ancient wine artifacts
• Golan Heights is the coolest climate region in Israel
• Muslim rule 738 - WWI - old varieties died out

Israeli war impacts

• Minimal grape growing impacts (1 missile fell on vineyard), but emotionally challenging
• Support in the US for Israeli wine, reduction in sales in Europe after Oct 7, 2023 events

Israeli wine market

• GH demand > supply in Israel
• Per capita consumption is low; a large segment does not drink due to religion
• The food scene has exploded in the last 20 years, but many restaurants do not serve Israeli wine
• Top 5 markets - US, Canada, Europe, Far East (Japan)
• Top US markets - NY, NJ, CT, FL, TX, IL, CA
• Historically, wines went to religious markets, expanding into secular
• internationally marketed as high quality, not as kosher; Angelo Gaja distributes in Italy

Differentiating GH

• “Oldest new world winery in existence”
• Marketing messages: World-class wine, kosher, then from Israel
• High elevation, volcanic soils on 33rd parallel (Etna is 37th)

Marketing

• Grass roots, get people to taste the wine
• Active in Jewish organizations, ads in Jewish publications, tasting events sponsored by Jewish groups
• Strong presence in Kosher wine stores

All GH wines are kosher

• 2 types - Mevushal (cooked/pasteurized) - required for some, esp Kosher restaurants (catering, weddings, bar mitzvahs); Non-mevushal
• Many wineries do both
• Everything used in winemaking needs to be certified kosher (e.g., yeast)
• Can’t use things like isinglass
• GH's whole facility is kosher
• “Could double business if made mevushal,” but will not to maintain quality

Food and wine pairing is not typical. Traditional Middle Eastern cuisine, “mezze,” has a lot of different flavors at once

Passover dinner is coursed, and every adult must drink four glasses of wine (or grape juice)

Yarden Cru Elite - $2,000 per pair

• 265 pairs related, including NFT, sold directly from winery
• Celebrate the 40th anniversary with collectors
• Cabernet Sauvignon, single vineyard, single block, two single barrels
• Launched at an Israeli restaurant in Singapore

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Tracking vine trunk movements down to the 0.5-micron level, Phytech is leveraging technology to optimize vine irrigation. Cody Ashurst, Director of Vineyards, and Lex Palmer, Marketing Manager, discuss how their solution optimizes and automates irrigation today and how it can be extended to optimize fertilization, harvest dates, and much more. 

Detailed Show Notes: 

Phytech - a global SaaS company that optimizes agricultural irrigation

• Technology includes dendrometers, irrigation pressure switches, soil moisture probes, and frost & weather stations
• Crops include nuts (biggest), citrus, pears, getting into row crops
• Vineyard solution primarily West Coast / CA, pursuing Portugal, Spain, Italy, Chile, Mexico, Texas

Dendrometer - digital devices mounted onto vine or tree, measures expansion and contraction of plant trunks at the 0.5-micron level (70 microns = 1 human hair)

Vineyard solution includes a dendrometer, soil probe, website, and mobile app with wireless comms and data loggers connected via cellular, satellite, or wifi

• The solution can be adjusted based on the type of farming (e.g., quality or quantity), rootstocks, clones, soil types
• Tracks trunk size and soil moisture to signal irrigation needs
• Optional: pump/value control for irrigation
• Can schedule up to 2 weeks of irrigation
• Can monitor fertilizer inputs (cost of fertilizer up 600% last 5 years)

Benefits:

• Don’t promise water savings, but see up to 60% less water use
• Improve quality by knowing when veraison happens and when vines stop growing or are stalling
• Optimize fertilizer, diesel, and electric pump costs
• Reduce labor for irrigation if automated
• The system logs data, enabling knowledge transfer when people leave
• Case study: High-end Napa vintner got WE94 points 1st vintage, then used Phytech in a heat wave year and got WE97 w/ tailored post-veraison irrigation; other growers had a 30% loss, the winery had a 3% loss
• Case study: one ranch was expecting a 50% loss, but down to 3% with irrigation changes

Pricing - depends on # of sites in a block

• There is a small upfront fee for installation
• Monthly SaaS fee (~$50-80/acre/year), includes maintenance
• Weather station ~$700/year (vs ~$3,500 to buy)

Case studies (videos on website)

• Ultra premium Napa winery Neotempo
• Larger Mendocino grower Bonterra 

Marketing most through word of mouth/referrals

• Digital media, video testimonials, trade shows & panels
• Video in digital media has been the most valuable
• Connecting 1:1 is very helpful
• Phytech is more holistic than other solutions

The most significant barrier to adoption is technophobia

The subscription-based model eliminates “tech graveyard” growers have

Product roadmap

• Predictive brix/pH model (growers input brix, system tracks weather, vine response) to predict harvest date by block
• GDD (growing degree days) monitoring tracking temperature and humidity in the field at the block level
• AI Advisor to look at past data and current practices and enable recommendations

Other exciting innovations - Autonomous spraying and tractors (Guss, Monarch), optical arrays for vine health (Scout), microalgae for soil health (MyLand)

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After struggling with tracking vineyard data firsthand, Shawn DeMartino, CEO and Founder of Sentinel, decided to create a solution with his partner. Enabling vine by vine mapping and data collection that could stand the test of time enables vineyard managers to increase the lifespan of a vineyard, manage viruses, and effectively create a “medical record” for each individual vine.  

Detailed Show Notes: 

Shawn’s background - winemaking, viticulture, now general management

Sentinel was a Covid project that became real, software that collects individual vine information over time

• “Patient medical system of record for vines”
• The solution includes a mobile app, desktop platform, and high-accuracy GPS (receivers that clip onto phones)
• Maps all the vines in the field
• Configurable data collection forms
• Available in 5 countries currently

Mapping the vineyard

• Create a 3D model with lat/long and elevation
• Basics (variety, clone), images, comments, discrete statuses (e.g., life stage, virus status)
• The vineyard mgmt team populates data, can walk up the vines and record
• Work with/ Sentinel to put in bulk metadata (e.g., block info, varietal)
• A client mapped 100 acres in 1 week

Work order function

• E.g., irrigation can be recorded
• Roguing, planting, and grafted statuses can auto-update when the work order is completed

Core benefits

• Extend the life of the vineyards
• Virus/disease management, see the program more clearly, identify asymptomatic vines in hot spots (case study: ~10% of vines asymptomatic) 
• Optimize pick areas (through mapping flavor profiles)

Pricing

• Mostly software, hardware costs small
• Annual subscription based on acres, not users (<1% of farming cost)
• Biggest growers ~$2k/year

ROI example: client roguing 1% of vines/year w/ growing virus problem, Sentinel enabled them to get ahead of the problem in 1 year

Marketing mostly organic search

• Articles and podcasts helped
• Last 18 mo, mostly word of mouth
• Referral program: The referrer gets a bottle of Krug

Barriers to adoption

• Worries about time requirements; the goal is to collect data when already in the field
• Worries about less flexibility to manage vineyard; full customization of data enables more flexibility
• Next on the product roadmap - continue to flesh out more work order functionality

Other tech Shawn is interested in

• Winery management platforms (e.g., Innovint)
• Soil moisture probes for irrigation

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With the recent launch of a new $300 retail icon wine, Boulder, Kaiken continues to explore the potential for luxury wines from Argentina. Building on the last 15 years of Kaiken's other icon wine, Mai, Anita Correas, Commercial Director, and Gustavo Hormann, Director of Winemaking, discuss the global market for luxury Argentinian wines, how they approach launching them, and the brand-building impacts for the Kaiken brand. 

Detailed Show Notes: 

Kaiken background

• Founded in 2002 by Aurelio Montes (Chile)
• "Kaiken" is the name of a wild goose that crosses between Chile & Argentina
• Exports to 60 countries
• Winery in Vistalba, Mendoza (28ha), vineyards in Agrelo (60ha) & Los Chacayes, Uco Valley (150ha)
• 60% on-premise
• Frances Mallmann restaurant at the winery

Recently launched new luxury tier/icon wine - "Boulder"

• $300 retail price, 3,700 bottles
• Developed over the last 10 years
• Unique 3ha block in Los Chacayes due to overflow of Arroyo Grande, full of big rocks/boulders
• Malbec (64%), Cabernet Franc (28%), Petit Verdot (8%)

Boulder launch plan

• Launched in Buenos Aires, Hong Kong, Korea, Brazil (São Paulo, Argentina's #2 export country), US
• Brazil's event had a more direct impact on sales
• Mostly press/trade events that are smaller, in-person
• Likely less on-premise than Kaiken overall, more hand-selling to collectors and Michelin Star restaurants
• VR w/ Google Glass to see the vineyard up close and go inside the soil has gotten positive feedback, but it is more expensive than a regular video (required 3 days of video shoots and a special camera)

Mai - prior icon wine

• $100 retail price, 12,000 bottles
• Launched in 2009 from a 120-year-old vineyard
• Marketing more "maintenance" now
• 2021 - redesigned packaging, got 98 pts and Top 100 from Suckling
• Primarily sold in Argentina, then UK, US, Brazil, Japan

70% of Argentinean wine is consumed domestically, delaying the need for exports

• Average export ~40% higher price than Chile (export-focused market, ½ the population, 2x wine production vs Argentina)
• More high-end wineries in Argentina vs ~5 in Chile

>$100 market for Argentine wine - "not a huge market"

• Big domestic market - much of Mai, Boulder sold domestically
• Consumers looking at super high-end often do not look at the country of origin but more at the concept of the wine
• Value Prop for Argentine luxury wine - not influenced by oceans, high altitude, dessert wines, driven by the Andes

Return on Boulder is more than sales, but brand building for Kaiken

Focused on relationships with importers

• Want long-term relationships as they represent the brand globally
• Reach collectors through import partners
• Has affiliated importer in Argentina

Montes relationship

• Was helpful on launch to piggyback on Montes brand
• Now Kaiken is more independent and only shares importers in a few countries (it used to have the same ones)

Kaiken Ultra ($26) awarded Wine Spectator Top 100 (#30, highest Argentine wine)

• Wine drinkers can graduate from Ultra to Mai and others
• Kaiken's focus for each range of wines is to over-deliver for the price point vs linking the wines

Good press in 2024 for Kaiken - #1 New World Winery from Sommelier Awards, Boulder rated best Argentinian red blend by Patricio Tapai (wine critic), Estate Malbec was Wine Spectator's best value wine

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