Monthly Archives: April 2018

The Changing Face of Wine in America: The Cooper’s Hawk Phenomenon

April 10, 2018 By in wine, wine brands, wine markets 12 Comments

As I noted last week, wine is everywhere in America, or nearly so, and while it is common knowledge that the U.S. is the world’s largest wine market and that wine is produced in all 50 states, the diversity of the wine experience here sometimes comes as a surprise. Case in point …

What if I told you that one of the largest wineries in the U.S., home to what is probably the largest direct-to-consumer winery club program in the world, is based in Illinois, not California?

Illinois? (I can hear you saying this). No way! You’ve got to be kidding? Well, Cooper’s Hawk winery is no joke and learning about it helps us understand how wine is changing in the U.S. and where it could be going.

Top 50 U.S. Wineries

Wine Business Monthly‘s February 2018 issue lists the 50 largest wine companies in the U.S., from #1 Gallo (estimated production 70 million cases) to #50 McMannis Family Vineyards (340,000 cases). Most of the wineries are located in California as you would expect with a few exceptions such as Washington-based Ste Michelle Wine Estates (#8), #13 Precept Wine, and #36 Mesa Vineyards of Fort Stockton, Texas (550,000 cases).

Number 34 on the list with 570,000 case annual production and a wine club that is approaching 300,000 members is Cooper’s Hawk Winery and Restaurant of Woodridge, Illinois. All that wine is sold directly to restaurant patrons and wine club members. It is an interesting case study of wine’s growing (and changing) place in American culture.

A Wine-Centered Lifestyle Brand

The first Cooper’s Hawk location opened in 2005 and the chain, which identifies itself as a “lifestyle brand centered around wine” has grown to 30 stores in the  mid-west (Illinois, Indiana, Ohio, Michigan, Missouri, Wisconsin) plus Maryland, Virginia, and Florida. Five new locations are scheduled to open in 2018. A total of 4.4 million guests visited Cooper’s Hawk last year.

A Cooper’s Hawk experience combines several elements. It is a restaurant, of course, with a wide-ranging upscale menu that encourages patrons to think food and wine with a suggested pairing for each dish.  Bin 70 (Cooper’s Hawk Pinot Gris) is the suggested match for pan-roasted Baramundi, for example, and red wine braised short ribs are matched with Bin 04 (the Cooper’s Hawk Red, a Cab-Merlot-Syrah blend).

Ordering wine by the numbers rather than listing the wine names on the food menu is a way to keep things simple, rather like many people order by number from an Asian restaurant menu. You don’t necessarily need to speak wine to enjoy it at Cooper’s Hawk.

Each restaurant features a “Napa-style” wine tasting room and an “artisanal retail market,” where various food and lifestyle items are sold along with the Cooper’s Hawk wines. The idea is to bring the feel of a wine-country tasting room and restaurant to customers who are attracted to wine lifestyle experiences.

47 Varietieslux

A total of 47 different Cooper’s Hawk wines are listed on the online wine menu, divided into several categories, including International, Sparkling, White, Red, Sweet Red, Sangria, Fruit Wine, Dessert, Mulled Wine, Barrel Reserve, and top drawer Lux. As the video above indicates, grapes are trucked to the Illinois winery from California, Washington, Oregon, and other regions and the wines made, aged, bottled and shipped to Cooper’s Hawk stores.

Cooper’s Hawk invites its guests to embrace wine and gives them both broad choice and attractive pricing. Bottles of wine sell for what glasses of wine might go for at other restaurants. Retail shop prices begin at under $15 per bottle and top out at $39.99 for the Lux Pinot Noir. Restaurant prices are a bit higher, as you would expect, but the mark-up is surprisingly small. You can have that $40 retail Lux Pinot for $47.99 in the restaurant.

All 47 wines are available by the glass, with prices starting at less than $7. A glass of Lux Pinot Noir or Lux Meritage will cost you $13. How you view these prices depends on context, I think. If you are used to New York City restaurant prices, these wines are incredibly cheap — so cheap you might hesitate to try them. On the other hand, if lower-shelf supermarket wines are your reference, the prices might seem a bit high. It is clear from Cooper’s Hawk’s success,, however, that there is a sweet spot for an upscale casual dining restaurant wine list and they seem to have found it.

World’s Largest Wine Club?

One of the most interesting elements of the Cooper’s Hawk phenomenon is its wine club, which has nearly 300,000 members and is growing at a 25% per year rate. Guests who join the club are offered special “members only” wines plus invitations to various exclusive programs and events. Although there is an option to have monthly wine allocations shipped to your door, the pricing structure strongly encourages members to pick up their wines at the tasting room, which obviously produces repeated visits to the restaurant and reinforces the lifestyle relationship.

I am kind of fascinated by Cooper’s Hawk, which seems to have struck a chord with many American consumers by making wine the central element of a carefully crafted experience. I am therefore disappointed that I have so far been unable to visit one of the locations. Our travels take us many places, but so far the opportunity to belly up to a Cooper’s Hawk tasting room bar has eluded me.

But I have tasted a couple of the wines. The Cooper’s Hawk Lux Pinot Noir was the featured wine at this year’s Screen Actors Guild awards (Cooper’s Hawk is the official SAG wine partner) and we received samples of this wine plus the Lux Chardonnay, which were served at the event’s gala dinner, as part of the promotion of this partnership.

The details of the wines we received are a bit of a mystery — the Chardonnay and Pinot Noir are American appellation (not California or Oregon as you might expect). The Pinot was medium-bodied with a strong oak presence on the nose and palate that eventually faded to reveal varietal character. Perhaps the wine needed more time in the bottle to pull itself together or perhaps this is a winemaking decision to feature more oak on the premium product. The oak was nicely integrated in the Lux Chardonnay, on the other hand, and the wine was very enjoyable.

No one reads The Wine Economist for tasting notes, of course, and I’ve only sampled a couple of the wines. It is clear that these wines appeal to Cooper’s Hawk customers, who order them with meals and come back for more. Very impressive.

Cooper’s Hawk has achieved amazing success by creating or expanding a market that few of us imagined could be so large. Cooper’s Hawk recently announced and growing list of collaborations with famous wineries (Francis Ford Coppola, Boisset Collection) and celebrity chefs (Tyler Florence among others) that promise to expand the brand’s lifestyle appeal.

Is Cooper’s Hawk the future of American wine? No — wine is too complicated to have a single road ahead. But the Cooper’s Hawk phenomenon does suggest several important trails to explore — direct-to-consumer sales, focus on experience not just product, innovative marketing structures, and broadening the consumer base beyond the Wine Spectator reader “usual suspect” base to explicitly include Food Network viewers and foodies more generally. I think there’s a lot to learn about the market for wine in America from Cooper’s Hawk.

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The Wine Economist will pause for a couple weeks while Sue and I are in France to participate in Terroir and Millésimes in Languedoc and Roussillion from April 15-22 and Val de Loire Millésimes from April 22-25. Looking forward to meeting fascinating people, drinking wonderful wines, and learning as much as we can. Full report to follow when we return and have had time to digest our experiences.

Scratching the Surface of Wine in America

April 3, 2018 By in wine, wine markets 3 Comments

wineamericaI was busy this winter speaking at national and regional wine industry gatherings here in the United States: the Unified Wine & Grape Symposium in Sacramento (the western hemisphere’s largest wine industry meeting) and smaller but equally ambitious wine business meetings in Colorado, Idaho, and Washington State.

It’s been inspiring to meet so many hard-working and talented wine people and to talk with them about their challenges and achievements. I’d like to give a sense of what I learned in today’s column but — fair warning — I only have room here to scratch the surface of what I saw and heard and the places I’ve been.

As I said in my “State of the Industry” presentation at the Unified Symposium, wine is bustin’ out all over America. More consumers drank more wine in 2017 from more producers in more places than ever before.  The United States is well on the way to fulfilling Thomas Jefferson’s (and Phillip Wagner‘s) dream of a widespread wine-making and wine drinking nation.

American Wine By the Numbers

Wine America commissioned a study by John Dunham & Associates of the American wine industry’s economic impact  and the 2017 numbers are impressive (here is a pdf summary of the study). The total economic impact of American wine was more $219 billion, when both direct and indirect effects were included, and spread across all 50 states.  Follow this link  if you want to see the numbers for particular sectors or regions.

Wine Business Monthly‘s February 2018 issue surveyed the American wine scene and found nearly 10,000 wineries in the U.S. today (the exact number was 9,654), of which 7,751 were brick-and-mortar bonded wineries and 1903 were “virtual” wineries. California (1241) and Oregon (301) account for most of the virtual wineries. Nearly 40% of Oregon wineries are virtual — brands based upon wine produced under contract by others or sometimes purchased on the bulk wine market.

California makes the most wine, of course, and has the most bonded wineries (3,151) followed by Washington (713), Oregon (473), and New York (365). California was both the most wineries and the largest ones. It is no wonder that the California section of your local shop’s wine wall is so large.

My speaking schedule took me to Washington, Colorado, and Idaho this year. Colorado is 12th on the winery league table (behind Missouri and ahead of Illinois), with 121 bonded and 6 virtual wineries. Idaho sits in 28th place with 47 bonded and 5 virtual wineries. Although the scale is obviously smaller in regions like these, compared with California, that doesn’t mean that potential quality and ambition are any less.

Grappling with Challenges

Sue and I were much impressed by the energy and intensity we saw in the winemakers we met as they grappled with their particular challenges and opportunities. At the Unified Symposium in Sacramento, for example, special seminars inspired by last year’s wildfires were organized around emergency planning, preparedness, and response.

The Colorado program included applied research on Phylloxera, which has now come to parts of the state, and necessary practices to deal with it more effectively and to slow its spread. Paul Hobbs presented a seminar and growing and making Malbec, so put Colorado Malbec on your radar.

Idaho has its own vineyard problems — a killer freeze last year wiped out a lot of the production capacity. Growers are working together to rethink what should be grown, where, and how, treating the problem as an opportunity to improve. I was especially impressed by one conference session that I was not allowed to attend. Each year the Idaho winemakers gather in private to taste and frankly evaluate each other’s wines. The idea is everyone needs to improve quality if the regional industry’s reputation is to grow. No outsiders allowed in these pointed discussions.

To Tip or Not to Tip?

Sometimes regional meetings rely upon outside consultants for imported expertise, but often the biggest gains come from internal discussions like this. I sat in on one session at the Washington Winegrowers meetings, for example, where participants shared their experiences running tasting rooms. With direct-to-consumer sales more important than ever, tasting rooms need to adopt the best practices — but what does that mean in highly localized wine markets? It was fascinating to hear what worked and didn’t and why.

One issue that I did not expect to come up in the tasting room discussion was tipping. Tipping is for restaurants and cruise ships, not for wineries, or so I thought. But once you are using computer-based credit card payment systems, it is a simple task to insert a tip option ranging from zero to ten percent to twenty to whatever you like. Some winery owners were dead set against tipping — we pay our tasting room staff a good wage, no need to tip them to do their jobs. Others reported that customers brought the subject up, asking how they could tip — they appreciated the personal service that much.

One winery owner, who seemed to enjoy stirring things up, said he gave visitors who wanted to tip three options: 10%, 20%, and 200%. That 200% tip possibility usually generated an interesting conversation, he said, and that’s just what he had in mind.

There is a big world of American wine out there beyond California. If you haven’t taken advantage of the opportunities, consider this a wake-up call. The world of local American wineries is not as ubiquitous as craft breweries, which seem to lurk around every corner, but they are widespread and deserve your attention and support.

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This is the first of a short series of columns on the changing face of wine in America. Come back next week to learn the surprising story of the world’s largest winery club and the innovative winery project behind it.