Purple Wine Company: Balancing Quality, Consistency with a Nose of Outstanding Value

Purple – that deep, rich shade between crimson and violet – is historically a color associated with royalty, dating back to Roman times. Partially this is because the production of purple dye was a difficult, expensive one, making it only accessible to the nobility, but it is also surely must have something to do with another regal indulgence: wines. Uncorking the perfect wine for the moment can still make you feel like a king for a day, and Purple Wine Company (Purple Wine) was founded in 2001 to feature the best of the noble grapes and their cousins, but at a price that wouldn’t require a king’s ransom.

Derek Benham, a second-generation Californian, started Purple Wine as the culmination of a dream. Working summers on his father’s farm in the San Joaquin section of California’s Central Valley region, Benham fostered an early love of agriculture, and became involved with the wine industry directly after graduating from the University of California, Berkeley in 1982. Building his presence in the sector from selling wine out of his car to brokering a deal with the world’s largest wine, beer and spirits producer/marketer, Constellation Brands (Constellation), for the Blackstone label, Benham was already a force to be reckoned with when he launched his current venture. “Derek is a mile-a-minute guy with a lot of different interests, but when it comes to business he’s all-in,” emphasizes Lisa Ehrlich, vice president of marketing for Purple Wine, who has worked with Benham for eight years.

Indeed, Benham had barely sold one company when he started Purple Wine from scratch in Sonoma, Calif., in the heart of the state’s wine country. Only a couple years later, however, the previous company came to Benham with an offer to sell him a production facility in Graton, Calif., further west in Sonoma County. He accepted, further reinforcing the capabilities of what has grown into a sizable enterprise.

“He had been a customer of the facility with his last company, he had bought it, then sold it at a profit, and then bought it back again at a discount, and that’s now our headquarters in Graton,” laughs Ehrlich. “Now we cover 15 acres and have a total of 200,000 square feet of building space. It’s one of the larger winery production facilities in Sonoma County, and we bottle wine for a lot of different wineries. If you see Graton on the back label, it was produced here.”

In total Benham holds two related entities: Purple Wine, the sales and marketing arm (also encompassing an adjunct business, Wheelhouse, that produces control-brand wines in partnership with retailers), and a sister production operation, Sonoma Wine Company (Sonoma Wine), which has about $75 million of fixed assets, three different facilities (totaling 200,000 square feet), and about 5 million to 6 million cases worth of capacity. Purple Wine employs a staff of around 30 full-time (half supervising the fields and half in the office), while Sonoma Wine maintains a staff of over 160 (two-thirds production and one-third administration).

Redolent With Good Buys

Purple Wine doesn’t own vineyards; rather, the company contracts with premier growers to source the best grapes, balancing what nature provides and what Purple Wine requires. The company processes these resources into wines that restaurants, retailers and consumers connect with, and that offer the kind of consistency they can return to repeatedly.

The Purple Wine portfolio of nationally distributed wines is historically comprised of the labels Avalon, BEX, Four Vines and Rock Rabbit; these wine labels, food friendly and reliable in style from vintage to vintage, showcase the most evocative traits of Cabernet Sauvignon, Riesling, Zinfandel/unoaked Chardonnay, and the Syrah/Sauvignon Blanc varietals, respectively. Adjectives that are appropriate include powerful, unparalleled, bold. A fourth wine, CRYPTIC, was launched in August 2012 to immediate success (a top to-be-announced restaurant chain will be spotlighting it exclusively). It features a proprietary mélange of Californian grapes in a playfully packaged signature blend described by the company as “dark … mysterious … deep black cherry … intense red raspberry … velvety … alluring.” Each wine is delicious, distinctive in its own right, while all hold one thing in common: an attractive price point.

“One of the reasons we’ve been successful during the downturn is that we’ve always focused on wines with a compelling value proposition,” reflects Ehrlich. “Derek’s always bucked the trends; he’s not a wine snob. For example, we just sold off the brand Mark West [in 2012] to Constellation [it’s been publically reports that the sale totaled $160 million], and the reason it was so attractive was because there were a lot of expensive pinot noirs out there, but not a good one less than $10, which is what Mark West offered. We develop the right flavor profile, the right package and offer it at the right price point through local bistros to build it up from the grassroots; our wines may become fine wine retail and restaurant brands, but we don’t go after the big-box stores and high-volume chains. Our first priority is good wine that offers a good profit margin to everybody and that can sit comfortably in the current product mix.”

Waste Not, Want Not

Reinforcing this initiative are Purple Wine’s executive management: Dennis Carroll, president; Ron Janowczyk, senior vice president of sales; and Alex Cose, cellar master. All three have backgrounds that include the study of finance and the managing of the resources-pricing balance. Having executives that are entrepreneurial, are informed by agriculture and accounting experience, and that wear multiple hats helps the company be very fiscally responsible and bottom-line driven, as Purple Wine strives to find ways to shave expenses rather than pass the increase in grapes and goods on to the customer.

Some of the efficiency methods put in place at Purple Wine have not only kept costs down, but they have also decreased wastewater, natural gas use, electricity use and greenhouse gas emissions. Impressively, this all took place at the same time that the company was increasing its bottling, tank storage and barrels stored. Key conservation upgrades included the installation of glycol cooling/storage systems, 87-percent efficiency water heaters, high-efficiency T-5 fluorescent lights, monitoring systems, foam-insulated reflective roofing, centralized water intakes, a rinse reuse system, a steam sterilization system, a wastewater treatment mechanism, and a rainwater reclamation arrangement, among other sustainability strategies. Future planned measures include the installation of solar photovoltaic power and geothermal HVAC circuits. These efforts resulted in Purple Wine receiving recognition and accolades from the Pacific Gas and Electric Company, EnergyStar, the Sonoma County Green Business Program, the EPA, the Business Environmental Alliance and the Sustainable Wine Growing Program, among others.

Another tactic the Purple Wine team intends to implement to battle the economic challenges in the market is to take advantage of the company’s distribution channels and valued partnerships to more directly target the $10 - $20 price range. The under $10 sector has become supersaturated by bigger players, and instead of attempting to build another Mark West-type label to potentially sell, Benham is eyeing acquisitions to strengthen the in-house portfolio for the long term. In addition, Purple Wine will be introducing its first import brand, a Spanish wine, in 2013.

“Recently we’ve really started to get the recognition we deserve in the industry, and at the size we’re at we need to be taken seriously as a major contender,” underlines Ehrlich. “We have a simple, compelling message about our wine, and in the future we will only make it more clear how we can balance quality and accessibility.”

Running a streamlined operation that results in anything-but-lean wine, Purple Wine and its associated production facilities will continue to release vintages that embody the best traits of terroir and technique and fulfill the consumer demand for even more excellence per ounce. Showcasing over a decade of stately development, Purple Wine Company has others turning green with envy.