Wine: The Cases have big plans for Sweely — and Virginia
By Dave McIntyre,
What happens when a conservative community, hesitant to change its ways and dependent for its livelihood on the slow cycle of the seasons, meets an innovator accustomed to rapid transformations in the way people live, work and communicate?
Now that Steve and Jean Case of America Online fame have bought themselves a winery, the Virginia wine industry might soon find out.
The couple behind the Case Foundation (which promotes philanthropy through technology) and Revolution (a venture-capital firm that champions “disruptive, innovative companies”) quietly purchased Sweely Estate, just off Route 29 in Madison, in July. Final regulatory approval for the license transfers was granted late last month.
The transition at Sweely, a seven-year-old winery that had slipped in and out of foreclosure for two years, has been remarkably low-key given the prominent buyers. It is a marked contrast to the spectacularly public bankruptcy of Kluge Estate, south of Charlottesville, which played out in the media until the winery was bought at auction this year by real estate mogul and TV star Donald Trump.
In a two-hour interview at the winery on a recent warm, sunny December morning, Jean Case described an ambitious, if not yet entirely mapped out, plan to help the Virginia wine industry expand to new markets.
“We’re Virginians for the past 30 years, and we like to see business grow in the state,” said Case, who lives with her husband and children in McLean. “Part of that is the excitement of helping a nascent industry on the brink of success. Our goal is for us and our team to be out in some markets in Virginia and building exposure for Virginia wines. There’s a beautiful opportunity to be out there with a wine and show people the quality it represents.”
Case, 52, has an easy smile that doesn’t fade even as she talks. While most winery types see a cloud and think of rain, she’s the type who finds a silver lining. And unlike most winery owners, she travels with an entourage: A personal assistant who says he’s in charge of “strategy and innovation” and the publicity director from Revolution drove from Northern Virginia for the interview, joining a Charlottesville-based publicist. The winery manager and winemaker filled out the group.
While she and her husband have enjoyed wine for years (Steve Case has written letters to the editor of Wine Spectator magazine), they hadn’t paid much attention to Virginia wines until a Charlottesville vacation three years ago. Visiting several of the area’s wineries, they discovered the growth and improvement of the state’s wines, and their interest was piqued.
The winery, consisting of a hospitality center and a separate building where the wine is made, clearly is Jean Case’s project. Her first order of business is to renovate; the estate will close to visitors later this month and reopen in the spring with a new tasting room and refurbished events venues. The winery building already is state-of-the-art, using three levels to move the wine by gravity instead of pumping, and with plenty of capacity to expand production.
Case has already taken steps to improve the wines, which under the previous ownership never reached their potential for quality. Six underperforming acres of the 36 acres planted to vines have been ripped out to prepare for replanting with different grape varieties and clones. (The estate covers about 300 acres, of which only 38 have the slopes and soils suitable for grapevines.) Sweely winemaker Frantz Ventre spent the last two years of the winery’s financial troubles maintaining the vineyards rather than making wine, and to ease the winery’s cash crunch, Sweely Estate sold most of its grapes in 2009 and its entire crop in 2010. The vineyard, first planted in 2004 at the relatively high density of 1,700 vines per acre, should be in its prime.
Case has appointed Peter Hoehn, a veteran of the hospitality industry in Charlottesville, to manage the winery, and she’s retaining Ventre as winemaker. Ventre is planning to increase quality next year by limiting yields to one grape cluster per vine shoot, down from two. He recently visited Oregon to study sustainable viticulture practices popular there.
A native of Saint-Emilion on Bordeaux’s right bank, Ventre is especially enamored of merlot. “We have one block in the vineyard that is doing really well with merlot, and when I taste the wine, it reminds me of home,” he says.
In pursuing her goals, Case decided not to hire famous French consultants, as other prominent Virginia wineries have done. “We hired Virginians!” she says, almost like a rallying cry. Michael Shaps of Virginia Wineworks has been brought on board to help with the winemaking, and viticulturist Lucie Morton is consulting on the vineyard.
Beyond the immediate steps to renovate the tasting facility, Case has one urgent dilemma to resolve before she begins marketing her wine or promoting the state industry: She needs a new name for the winery.
“It will definitely not be Case Wines,” she says, referring to the obvious jokes about “Case Discounts” or “By the Case.” Although her team members will decide on a winery name, they plan to enlist consumers — probably through a poll on Facebook — to help name their first wine to be released. “All our businesses have been about building communities, and we want to apply that approach here,” she says.
In talking about marketing over the longer term, Case is more ambitious. She speaks of promoting not only her own wines but the image of Virginia wine itself. To do that, her team will select a “family” of Virginia’s top wines that she hopes to sell in the winery’s tasting room.
“We would love to have consumers come here and choose from a variety of Virginia’s finest wines,” Case says. Her wine family could be fluid, she adds, but her favorite wineries include Linden, Keswick, King Family and Barboursville, among others.
Beyond the tasting room, “we’ve been speaking to general managers and wine stewards in restaurants and wine bars, as well as retailers in Northern Virginia, and we’re seeing a lot of interest in carrying Virginia wines,” she says. “It fits in with the eat-local, drink-local movement and an interest in supporting local business.”
Virginia wineries are allowed to self-distribute 3,000 cases of wine annually to retailers and restaurants in-state, through an industry-run holding company established in 2008. Many wineries don’t take full advantage of that sales avenue, but Case says she hopes to use it to promote her wine family. She described an industry that must discover new markets to expand; her target market is Northern Virginia and people who — like her, before her Charlottesville vacation with Steve — haven’t yet discovered the new quality in Virginia wine.
But can this marketing revolution be “disruptive” enough to shake up the industry? Most Virginia wineries sell their small production entirely through their tasting rooms and at festivals, where they earn full retail profits. There is a disincentive to put their wines in the distribution system, even through self-distribution, which takes time and resources while cutting profit margins.
“We need to demonstrate that there is a market for these wines in order to give the wineries and the growers confidence to expand and grow,” Case says.
I spoke to three industry insiders who expressed skepticism — while asking not to be identified — that Case will be able to enlist other wineries for her cooperative venture. Why would any winery promote another’s product, they wondered.
Others are more optimistic. “I think she’ll be a tremendous asset,” says David King, owner of King Family Estate winery in Crozet, west of Charlottesville. “There’s all kinds of opportunity in our industry, and I’m as excited as can be about people in another sector, with their energy, coming in and energizing our industry.”
Case’s ambitions are more modest than Donald Trump’s, which perhaps reflects their personalities. Trump Vineyards, the former Kluge Estate, has 220 acres of vineyards with plans to expand to 370 acres. Case has 30 acres under vine and talks about buying more vineyard land to increase production. Trump also has an established market for the wines in his hotels, golf clubs and casinos. Through that network, he has the potential to raise the profile of Virginia wine worldwide.
In contrast, Case’s focus is local, on a statewide market in which only 5 percent of the wine purchased is made in Virginia. “I see no reason that Virginia wines shouldn’t ultimately compete on the global market, but we need to walk before we can run,” she says. “We need more Virginians to drink Virginia wine.”
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