Precept Wine Buys Ste. Chapelle
Company expands holdings in Idaho, sets sights on 1 million case production
The deal makes Precept the largest single producer in Idaho, where it also owns Sawtooth Estate Winery and 470 acres of vineyards (acquired in January 2010.) Between Sawtooth and Ste. Chapelle, Precept now boasts production of 140,000 cases in Idaho, putting it on track to move 1 million total cases this year (second only to fellow Washington state company Ste. Michelle Wine Estates.)
“We were already the main vineyard source for the majority of the Ste. Chapelle Wines, and we have our Sawtooth winery there, so there are a lot of very easy and obvious synergies,” Alex Evans, senior vice-president of marketing with Precept Wines in Seattle, told Wines & Vines this week.
The deal marks a return to Idaho for Precept’s ownership group, which includes Dan Baty, the former owner of Corus Wine Group, which acquired Ste. Chapelle in the 1980s and later sold the winery to Constellation Brands in 2001 along with other properties. Ste. Chapelle was included as part of Constellation’s sale of eight properties to Healdsburg, California-based Ascentia Wine Estates in 2008.
But with investors—including San Francisco private equity firm GESD Capital Partners and Kansas City, Missouri-based Entertainment Properties Trust—calling for the sale of assets to end Ascentia’s financial woes (it’s been insolvent for two years), Precept saw a buying opportunity.
Precept’s purchase of Ste. Chapelle returns the winery to owners who have long seen potential in the Idaho wine industry, which has grown significantly since Ste. Chapelle kick-started the state’s modern wine industry in 1976.
“The ownership group has been committed to Idaho since the early to mid-90s and has always seen it as the next big opportunity in the Northwest,” Evans said. “We see the great potential for it, not just in the state of Idaho but the Greater Northwest—even nationally.”
Terms of the deal are undisclosed, but no major changes are expected as Precept develops its new acquisition. Maurine Johnson will continue to serve as Ste. Chapelle’s winemaker, and key offerings will continue to be its Riesling, Soft Red, Soft White and Huckleberry wines.
But for Evans, some of the best potential lies in the winery’s Riesling and other varietals that produce aromatic wines in Idaho’s cool climate. Asked what excites Precept about Idaho wines, Evans said: “From a climate perspective, from a vineyard perspective, that high elevation, cool-climate area we’ve seen do exceedingly well with aromatic white wines, such as Riesling.”
Precept was awakened to the potential of Idaho as it watched California winemaker Bill Murray transform production at Sawtooth, a 10,000-case premium-tier winery.
“He’s opened our eyes to the kind of quality and the depth and the variety Idaho can provide,” Evans said.
Precept’s acquisition of Ste. Chapelle follows its acquisition in February 2011 of two Washington state wineries from Diageo PLC, Canoe Ridge Vineyards in Walla Walla and Sagelands Vineyards in Wapato.
Precept has spent the past year renovating and positioning Canoe Ridge for a relaunch, which took place earlier this month with the reopening of its Walla Walla tasting room. Diageo shuttered the tasting room in 2010, but the renovated premises are now gearing up for a new era.
With an annual production of 25,000 cases, Canoe Ridge came with significant unsold inventory that Precept is still clearing out, but it is paying close attention to new offerings.
The first vintage made since Precept acquired control of the property will be released in 2013, and a new estate tier from Canoe Ridge’s vineyards in the Horse Heaven Hills AVA is also planned.
“Diageo had done some pretty aggressive pricing to help move through inventory, and we’re still cleaning that up right now,” Evans said. “But the core of the Canoe Ridge business will be at that $20 to $25 level, and we’re actually bringing on an estate tier in addition at an even higher price point.”