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Rack & Riddle Toasts New Locations

Custom-crush sparkling wine specialist now in northern Sonoma County

by Andrew Adams
rack riddle
Bins of Chardonnay are dumped into a press at Rack & Riddle's new grape-processing facility in the Alexander Valley.

Healdsburg, Calif.—A load of just-picked Chardonnay grapes arrived at the new Rack & Riddle location in the Alexander Valley this morning, marking the start of a new vintage and the next phase for the fast-growing, custom-crush wine company.

Rack & Riddle, which carved a lucrative niche in the custom wine services trade by focusing on méthode Champenoise sparkling wines, is now located at the former Murphy-Goode winery on Highway 128 in the Alexander Valley and another production and bottling facility at a former Clos Du Bois barrel warehouse at 499 Moore Lane in the city of Healdsburg.

The company had to leave its former location in Hopland, Calif., when its landlord Entertainment Properties Trust sold that property to Duckhorn Wine Co. Bruce Lundquist, who owns Rack & Riddle with his business partner Rebecca Faust, said it was pretty clear EPT was divesting itself of its wine industry stake and they would need to find a new location. He said the transition has been seamless and the clients have made the move with them. “We’re booked up; it just followed us down here,” Lundquist said. “We’re a half-hour more convenient than in Hopland.”

He said the past year has been an intense period of “controlled chaos” as the company first began converting the barrel warehouse in Healdsburg into a winery and production facility and then set about expanding the winery in Alexander Valley. Both projects are nearing completion just in time for harvest.

$8 million investment
Lundquist said the new facilities cost more than $8 million, but the company is completely booked for the 2014 vintage. This year’s harvest began with 7.5 tons of Chardonnay grapes picked by Amista Vineyards in nearby Dry Creek Valley.

Amista winemaker Ashley Herzberg and Rack & Riddle’s director of winemaking Penny Gadd-Coster doused one of the half-ton bins with a bottle of Rack & Riddle’s sparkling wine this morning. After pressing, Herzberg said the juice will settle and get racked off the heavy lees at the Alexander Valley winery before being sent by truck down to the Healdsburg location, where it will be inoculated and ferment. “We’ll break in that new facility as well,” Herzberg said.

Lundquist explained the Alexander Valley winery will be used for grape processing, red wine fermentation and barrel and triage case storage, while the Healdsburg location will be used for white wine fermentation and bottling. He said the company would evaluate expanding production at the Healdsburg location based on water costs, because the facility uses municipal water and wastewater services. The company will hold a grand opening reception for the Healdsburg location Aug. 27.

rack & riddle
Penny Gadd-Coster (far left) watches as Ashley Herzberg pours a bottle of Rack & Riddle sparkling wine over a half-ton of Chardonnay destined to become a sparkling wine for Amista Vineyards.

An expanded wastewater treatment system at the Alexander Valley winery should be completed in the next 30 days, and Lundquist said that will allow Rack & Riddle to expand its total production capacity to around 6,500 tons, which is split 50-50 between still and sparkling wines. The winery produced more than 1 million cases in 2013.

Rack & Riddle now has 140 clients, about 60 of whom are doing bottle-fermented sparkling wine projects. Lundquist said the winery’s total production is comprised of a few major clients, Rack & Riddle’s own wines, private labels and shiners and small-lot sparkling wines for wineries. Lundquist said the Alexander Valley winery is staffed with 15 full-time employees, and 44 work at the Healdsburg location.

After selling the Murphy-Goode brand to Jackson Family Wines, the Murphy family operated the winery as the custom-crush operation 4001 Cellars for a few years, until Rack & Riddle leased the entire winery. The Murphys still own nearly 200 acres of vineyards, and on Monday, T.J. Murphy was at the winery installing the gondola hoist in front of the crush pad to get ready for the coming harvest.

The winery now features two new Bucher Vaslin Xpert presses and three older, smaller presses. In Healdsburg, Rack & Riddle has two Bertolaso bottling lines and Lundquist said he expects to be bottling 6,000 to 7,000 cases per day. The company has considered adding charmant tanks and other carbonation technology, but currently it is sticking with bottle fermentation. Lundquist said it’s how Rack & Riddle built its reputation and what the company’s clients most typically request. “We’ve really hung our hat on méthode Champenoise.”

Still looking to expand
Despite the two new production facilities, Rack & Riddle still needs to expand. Lundquist said one of the challenges of sparkling wine production is the need for a large amount of space for triage case storage. Many of the company’s clients also use barrels. The Alexander Valley winery offers 27,000 square feet of temperature-controlled storage space, but Lundquist said he needs to find twice that amount by next year. “I think of those as fairly benign functions, but they’re huge utilizers of space, they’re space hogs,” he said.

The winery in Alexander Valley includes a tasting room, but Lundquist said the company hasn’t made any plans to launch a direct-to-consumer program. He said the location is great, but he doesn’t want to divert resources or energy away from Rack & Riddle’s core business. “Right now all our energy is focused on our clients,” he said.

And the sparkling wine business continues to be strong. Lundquist said Rack & Riddle made its name by producing small lots of just three pallets of sparkling wine for wineries. The clients would sell out through the tasting room or during the holidays and soon be back to order more.

Rack & Riddle can also provide a wide variety of dosage treatments to take essentially the same wine and drive it completely different directions based on the winery’s style or if a client is developing a product for the tastes of a specific market.

At the macro level, Lundquist isn’t sure what’s been driving American demand for sparkling wines. He said it could be consumers are making sparkling wine more of an every day beverage and younger wine drinkers are always on the lookout for something new and different. “I certainly would like to see the trend continue,” he said.


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Wine Industry Metrics
Off-Premise Sales » Month   12 Months  
October 2014 $570 million
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October 2013 $240 million $1,556 million
Winery Job Index » Month   12 Months  
October 2014 139
October 2013 131 192
MORE » Released on 11.13.2014


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