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Reagan-Gorbachev Winery Improves Taste Without Raising Prices

Bottles of Jordan wines. The winery produces cabernet sauvignon and a chardonnay. Photographer: Matt Armendariz/Jordan Wines via BLoomberg
Bottles of Jordan wines. The winery produces cabernet sauvignon and a chardonnay. Photographer: Matt Armendariz/Jordan Wines via BLoomberg

Aug. 18 (Bloomberg) -- When John Jordan was handed the reins of his family’s Sonoma County, California, winery in 2005, he had little experience in the industry and several big decisions to make.

Jordan Vineyard & Winery, established by his father, Tom, in 1972 as an American version of Bordeaux’s famous chateaux, had built a reputation for producing balanced cabernet sauvignons and chardonnays. Ronald Reagan and Mikhail Gorbachev shared a Jordan chardonnay bottle during a 1987 state dinner, and sales were brisk.

So some company employees were surprised when Jordan beefed up the sales staff and directed them to cut back deliveries for some long-time customers so bottles could be given to new ones.

“My dad said, ‘What’s the matter with you?’” Jordan recalled. “You’re spending all this money growing the sales force and infrastructure when you’re already selling everything.”

Jordan, a former Navy officer and partner at a mortgage-fraud firm, said he made the moves to prepare for the crash of the housing bubble.

“I knew demand would fall off, so if you could grow the number of accounts, you could afford a 30 percent hit in store sales,” he said. “And that’s what we did.”

The worst economic decline since the Great Depression damped sales of wine bottles costing more than $20 as consumers cut back on luxury spending. The retail value of California wine sales fell 5.3 percent from 2007 to 2009, the first dip in at least a decade, according to the San Francisco-based Wine Institute.

Better Taste

In addition to increasing the sales force, Jordan pushed for a better tasting wine.

Though he dismissed suggestions to sell a more expensive line of cabernet sauvignon, he asked winemaker Rob Davis to make a batch of wine that would be worthy of a reserve label. Jordan was so impressed with the results that he told Davis, “I sure wish it could all taste like this.”

Davis, who has been with the winery since the beginning and apprenticed with legendary winemaker Andre Tchelistcheff, said he could do that for a price.

Davis wanted to spend more on storage barrels, age the wine longer before selling it and have the option to buy fruit from nearby growers. Jordan’s father had preferred to use most grapes from his own 250-acre estate.

Jordan approved the changes, but kept the price at $52 per bottle. (The company also sells a chardonnay for $29.)

Ivy-Covered Mansion

The changes were evident during a tasting at Jordan’s estate in Healdsburg, about 70 miles north of San Francisco. The 58,000-square-foot, ivy-covered brick mansion serves as a tasting room, culinary center and winemaking facility.

While the winery’s 1999 and 2002 bottles were dense on the palate and showed predominately dark chocolate and earthy tones, the 2006 and 2007 vintages were lighter and highlighted plum and black-fruit flavors, without losing depth and power.

The changes have helped the wine reach a broader audience, said Robert Nicholson, principal at International Wine Associates, a liquor consulting and financing firm in Healdsburg.

“The family very much knows what they’re doing,” Nicholson said.

To contact the reporter on this story: Ryan Flinn in San Francisco at rflinn@bloomberg.net

To contact the editor responsible for this story: Manuela Hoelterhoff at mhoelterhoff@bloomberg.net.

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