04.11.2018  
 

Foley Aims Big with Acrobat Wine

Brand acquisition is the latest investment in Oregon by a California wine company

 
by Peter Mitham
 
“acrobat“
 
After selling the national brand Acrobat to Foley Family Wines, King Estate CEO Ed King says the Oregon winery will refocus on DtC sales of estate wines and launching smaller brands.

Eugene, Ore.—Foley Family Wines is filling out its portfolio with another Oregon brand as King Estate Winery looks to refocus on small-production wines from the Willamette Valley AVA.

Foley’s announcement last week that it had bought the Acrobat brand from King Estate for an undisclosed sum gives it purchase in the $15-$19.99 price segment where Oregon wines have logged 15% growth in the latest 52 weeks, according to data from market research firm IRI. “There’s a lot of opportunity to grow Pinot Noir in that $15 to $20 price point in Oregon, so it kind of fills that gap for us,” Hugh Reimers, president of Santa Rosa, Calif.-based Foley Family Wines, told Wines & Vines. “A to Z and Erath hold the number one and two spots, and we’d like to chase those guys.”

Acrobat Pinot Gris is a less expensive wine that typically sells for between $12 and $16 a bottle, another segment where Foley didn’t have a presence. To date, its sole holding in Oregon has been The Four Graces, which it purchased in 2014. The Four Graces sells in the $25-plus price segment and is now the top Oregon Pinot Noir in that tier. “The Four Graces brand is growing at 50%, 60% a year for us,” Reimers said. “Very quickly it has become the number one brand in Oregon, over $20, Pinot Noir, and we expect that to continue for a long period of time.”

A brand with growth potential
This points to good times for the Acrobat label, which offers something more affordable to a consumer that’s showed a willingness to trade up. “There’s a lot of upside for Acrobat Pinot Noir,” Reimers said. Before joining Foley Family Wines, Reimers was part of the executive team that led Jackson Family Wines into Oregon. When he joined Foley last fall, he brought the knowledge and connections necessary to build the company’s presence in the market and Oregon’s presence nationally.

“Bill was already there, but with the Acrobat acquisition it’s just given us a lot more upside,” he said. “We’re now the third-largest supplier in Oregon, full-stop. … There’s still a lot of areas of the country where [Acrobat] is under-represented and people don’t know it.”

Prior to the deal, Foley was sourcing fruit from approximately 150 acres in Oregon; the deal with King Estate gives it close to 500 acres from contracted growers. 

“There’s a lot more Pinot going in the ground in Oregon, the Willamette Valley and Southern Oregon,” Reimers said. “We have a lot more fruit to select from now to make a much higher-quality Four Graces. It’s always nice to have a second label for the lots that may not quite stylistically fit into your top label.”

While the latest deal didn’t include real estate, that’s not out of the question.

“[It] opens the door for us to go up and acquire more real estate, which is part of the equation, I think. Oregon represents great value,” Reimers said. “It’s still affordable.”

King Estate hopes to use some of the proceeds from the deal to add to its own holdings, though it will be refocusing its production on smaller lots of wines.

Focus on estate DtC, smaller brands
Acrobat’s sale means King Estate’s total production will drop from approximately 310,000 cases a year to 150,000 cases, allowing the Oregon winery to concentrate on King Estate-branded wines as well as niche labels such as its North by Northwest (NxNW) brand. It recently secured trademarks for names, like Inscription and The Four Nobles, and also owns the names Kings of Pinot and Republic of Oregon.

“Our customers are best served if we’re not trying to get bigger every year,” said Ed King, co-founder and CEO of King Estate. “Bless all those big companies that are doing it and getting bigger and bigger all the time, but it’s a decision about where you want to go in the world.”

King said his focus will be on building the winery’s direct-to-consumer business and cultivating small brands that may not get as large as Acrobat did since its launch in 2009, but will “be meaningful in the wine world, to us and our winemakers.”

The direction will build on King Estate’s inclusion in the Willamette Valley AVA in 2016 and its certification shortly after as the largest biodynamic vineyard in the U.S. “We are interested in an extension on King Estate,” King said. “We’ve never really done a rosé on estate for the tasting room. I’ve also given some serious thoughts about something that’s not really developed for Oregon, and that’s Sauvignon Blanc.”

While the changes may lead to the sale of some of its larger tanks, King doesn’t expect staffing levels to change. Production will be more manageable, and that creates opportunities with consumers who King said still value a sense of place and connections with producers.

“We’ll be looking for small-edition projects, not big ones,” King said. “There’s still a premium for an authentic story. … We’re still fortunate in the wine world that we have a lot of different sizes and a lot of different stories. It makes it a calling, not just a business.”
 

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