Creating a Luxury Brand
It was Seneca, the Roman philosopher at the birth of the Common Era, who is quoted as saying, “Luck is what happens when opportunity and preparation meet.”
I am going to introduce you to Halleck Vineyard.
I will also discuss the requirements for building a luxury brand.
I have been extremely fortunate to build and sustain one in less than a lifetime. I am told this is a unique accomplishment in a world of luxury brands that have been around for generations, even centuries, each attempting to increase penetration and retain perception.
I will address 4 key elements in creating a luxury brand. Then I will introduce two in extending one.
The first requirement is Authenticity.
Whatever the product, from technology to wine, the juice has to be in the bottle. It has to be real, not just claimed.
There is no room for “almost” with a luxury brand.
- It is why Yahoo Search could never be one and Google ultimately won that contest. Google attracted the best brains in the business, maintained their focus on search, to eclipse all other contenders.
- Apple is also a stellar example. In the early days, Apple was head-to-head and losing to Microsoft. It was all about the operating system and installed base. Microsoft owned Windows and Office, but needed to work on many different hardware platforms, adding complexity and the ability to manage the user experience. Apple, choosing to maintain a closed system and thus the quality of the user experience, won the race by a landslide.
The second is Provenance.
From the French ‘provenir’, “to come from”, provenance refers to the chronology of ownership of a valuable object.
A luxury brand needs to have history, even if only a short one.
- History validates status. It denotes that others have recognized the brand in the past. This can also be called “third party endorsement”.
- It must be unarguable. There must be hard evidence of the history, as stories are easy to make up.
The third is Integrity.
Integrity includes ingredients, intentions, and actions. It must pervade how you do business, matching actions to values.
Integrity is witnessed and respected.
People outside your company can sense it in your products and services; but equally, perhaps more important, are the people within your company. A luxury brand models integrity, empowering its people to amplify it with their actions and words. It’s inspiring.
And the fourth is Passion.
You can achieve technical excellence, but that can always be reproduced. Passion cannot. If you have passion, people perceive it in you, your products, your services, even in their customer experience. It is compelling and recognizable. People want to touch it, be a part of it, and experience it. They respond viscerally, with their hearts. This is the big attractant. Passion is the ultimate differentiator.
As a vintner, my history is an unlikely one. I selected wine as my “drug of choice” in my mid-20s. Then I pursued wineries to ply my trade in branding and creative services from Silicon Valley in the 1980s.
By the1990s, I was doing creative work for:
But more importantly:
Mumm Napa Valley
I worked for scores of other Napa and Sonoma County wineries needing branding, packaging and merchandising.
The wine business was growing at pace with technology. I was employed by the Wine Institute to assist in converting the American population from a beer drinking culture to a wine drinking culture. Today, the United States consumes more wine than any other country in the world, and Americans split equally in preference between wine and beer. This was unimaginable in the 1980s.
I moved to Sebastopol in 1991, commuting 100 miles each way to Palo Alto. I had started my young family. Coming from the cornfields of Illinois, rural Sebastopol felt like a healthier place to raise a family than the hectic pace of Silicon Valley.
The distillation of my experiences clarified some of the requirements to create a luxury brand. I did not intend to do so; I was just fortunate to have learned how through my career. And equally to have circumstances that allowed me to.
I wanted to live on a vineyard, so I planted the very first vineyard in western Sebastopol in 1993 on the pastureland of my new home.
I had no idea what I was doing.
We bought our rootstock from a listing in a single line in the phone book. Seemed like a reasonable place to look. It would not have occurred to us to ask other vintners in the area because there were no vineyards planted near us.
When I planted my Pinot Noir vineyard, I envisioned two potential outcomes.
- It could be beautiful and relatively inexpensive landscaping. I had formal landscaping quoted for my acreage, and the costs exceeded my means. But since grapes had never been planted as far west or at the altitude of my property, I was taking a big gamble. I could always make “backyard wine”.
- I could sell the grapes to cover cost. Any surplus could be saved to put my son, then an infant, through college.
As it turned out, scenario 2 proved to be more than viable.
By the time the grapes were planted, I had five wineries discussing the future of our fruit, still some years away. All were highly respected and expanding into our area. We selected one based on the price offered and the stature of the owner/winemaker. We had long been enjoying his wines.
The vineyard produced fruit, but less than expected and it took longer. It was six years before it bore enough fruit to warrant a commercial harvest. I had three sons by then. That was in 1999.
We invited friends to pick. About 20 showed up. We made breakfast, cleared the vineyard in a couple of hours, and served lunch paired with the wines from our winemaker.
Thus began a tradition of annual harvest parties that has continued.
We have hosted as many as 100 guest pickers for breakfast and lunch, preparing all the food ourselves.
The fruit sold in 1999 for the highest price in the market. We did not expect to achieve this for a number of years.
As a courtesy, our winemaker produced a couple of cases of wine from the vineyard just for us. This is often extended to vineyards from the wineries purchasing their fruit.
The balance was blended into a wine he called his Sonoma Coast Blend. We were thrilled! The annual costs for the vineyard were covered, although the initial investment was not touched.
The second year, we approached our winemaker to request a vineyard-designated wine from our vineyard. This is a wine that is made from only one vineyard and indicated on the label. If the wine is good, it elevates the value of the vineyard and establishes it as a brand. Over years, it enhances it status and collectability.
Our winemaker was reluctant . He did not believe the vineyard was of the quality for a vineyard designation. We, of course disagreed, having tasted the wine he made the previous year. But one could not dispute our bias.
He purchased our 2000 harvest at the same price as the ’99, a high-water-mark in the marketplace. We expected another case or two of wine from the fruit from our vineyard. We waited in anticipation. It is fun to share this with family and friends.
We had not heard from him in months and the next season was in bloom. When we inquired about picking up the wine, he told us he dumped it, saying it did not meet his standards. He still offered to purchase the fruit the upcoming year.
We were confused and disappointed. So we sought another winemaker.
Our son was attending school with the son of one of the most respected vintners in our area, Greg Lafollette. He had become a winemaking rock star with the meteoric rise of Flowers, a nationally renowned boutique winery he built and managed for the Flowers family.
We invited Greg to our house and offered him one of the few bottles of wine left from our vineyard. He took it home, called us at 6:30 the next morning, offering to buy our fruit for his new brand, Tandem, that he would be launching the subsequent year. He also offered to make a Halleck Vineyard designated wine, based on the quality he recognized in that bottle.
Greg launched his new winery with a Tandem 2001, Halleck Vineyard, Sonoma Coast Pinot Noir, released in 2002. I designed the packaging.
Unbeknownst to Greg (as he was vehemently opposed to wine competitions), I submitted two bottles we received as the vineyard owners, to the 2002 Pinot Noir Summit, organized in San Francisco.
It was an invitation-only competition, including 217 wineries, primarily from the United States, but also including entrants from New Zealand and Australia. Wines were blind tasted by 30 judges over 30 days. As I was friendly with the organizer, she invited me to compete, as she knew Greg would never participate.
I had nothing to lose; the iconic wines of my region were participating. I would at least see how we stacked up. And no one ever hears about those who do not make the top.
Lo and behold, we won that competition as the Judges Choice, recognized as the number 1 Pinot Noir in the United States in 2002.
I understood immediately that this represented instant provenance and license for the long road ahead to build my own luxury brand. Greg, Jennifer and I discussed the future: we agreed Greg would make our wines and he would not need to pay for our grapes for that harvest.
We launched Halleck Vineyard in 2002 with Greg as our winemaker and mentor. A luxury brand was born.
We leveraged our instant status to negotiate agreements with several of the fledgling vineyards in western Sonoma County, all in Sebastopol.
We developed 6 other wines from those vineyards, including two white wines. All have achieved national recognition and elevated the stature of the brand. We have never again entered our Estate Grown Pinot in any competitions. We saw no reason to compromise the status achieved with such a significant win.
Instead, we began a Wine Club, giving privilege to those who join to buy our Estate wine, considered a “Cult Wine” in the US. We recently submitted our 2009 Estate Grown to a nationally syndicated journalist, Dan Berger, for review. He lauded it as a 100 Point wine, the best score possible.
With bank support, we grew rapidly from our first 89 cases in 2002 to about 3000 by 2006. We were sold in the top restaurants in the United States, represented in 26 of the 50 states.
In 2008, the banks took a turn. Our sales had not dipped, but by the new rules, we were no longer in compliance with our bank. The loans were secured by our inventory. With a glut of expensive wine being dumped into the market by larger brands, our inventory no longer had enough value to support our loan. Further, the bank reduced the term of our loan, requiring that we pay it off sooner. With the economic turn, this did not seem possible. My house and vineyard were at risk.
We entered into a “work out” with the bank. And I can assure you, one does not emerge more physically fit. During discussions the bank recognized that our Wine Club represented consistent and recurring revenue. So the bank restructured our loan, taking all the revenue from our Wine Club at that point. By committing those funds, we could pay our loan with interest. The bank let us keep all other revenues. And my house and vineyard.
In looking at our other revenue, however, it was apparent that the margins were challenging without the balance of sales to our wine club members. These were our most valued and most valuable customers.
Selling across the US through distributors (who sell to retail stores and restaurants) required travel to distant markets and highly discounted pricing. We did no have direct relationships with those who actually enjoyed our wines. Further, we could not control where our wine was sold. It could be a discount liquor store or fast-food chain. This was not consistent with our goal of a sustaining a luxury brand.
So we changed our overall strategy, determined to grow our Wine Club and personal relationships with our direct customers, rather than continue through the distribution channels.
Then Jennifer, had an amazing inspiration. She realized from fundraising for our sons’ schools that auctions are used across the Bay Area to raise money for support. She researched all the private schools in the Bay Area that utilized auctions for education. After all, our vineyard was intended as a college fund for our sons. It seemed appropriate to employ it to support education.
We began offering gourmet lunches in our home with our wines, prepared by us and served by our sons, as auction lots to schools to raise money. People bid for the privilege to join us for lunch. We charged nothing, allowing the schools to keep all the proceeds.
This attracted a clientele interested in wine from affluent neighborhoods, and concerned about education. Just our kind of people!
Further, we offered this to our Wine Club members in other states. Many had children in schools who needed support. This philanthropic support became a key Wine Club benefit. We offered vintner lunches as auction lots in schools around the country.
Between 2009 when we began and 2013, we served over 40 lunches per year.
We made many friends, increased our Wine Club by four-fold, and raised over $250,000 to support education. This was from a winery with less than 1000 cases of production annually. Almost every lunch at least paid for itself in wine sales. It also provided employment and training for my sons. The top bid for a lunch for 6 hit $18,000 at the Sun Valley Wine Auction in 2012. Our luxury brand was on its way.
Extending a Luxury Brand
To extend our brand, we support our Wine Club community through curated experiences and adventures that I organize, all including our wine.
These experiences have included:
Safari to Kenya, enjoying vintner dinners in 5 different safari locations with regional foods from the local tribes.
Excursions to Italy, including Tuscany, Rome and Carnivale in Venice
A luxury resort owned by a Wine Club member on the island of Roatan, Honduras.
A weekend at Nick’s Cove on Tomales Bay, CA
The Sun Valley Wine Auction, in Idaho
The Vintners Holidays at The Ahwahnee Hotel, Yosemite National Park
Lake Tahoe, California, including the Lake Tahoe Shakespeare Festival
Sailing on San Francisco Bay on a 50 foot Swan
This year we are planning an intimate tour of Cuba with local chefs, sommeliers, musicians and art historians.
We dine in the finest restaurants with the best chefs in:
- New York
- San Francisco
- The Virgin Islands
- Puerto Rico
- California Wine Country
Extending the Halleck Vineyard brand has clearly punctuated another further critical requirement for a luxury brand: I call it Community or Ecosystem.
As a small brand, it is difficult to get and hold people’s attention. There is so much information that it is difficult to stand out or be noticed. Seeking recognition by competing is always a gamble. You win some and you lose some. And it is expensive.
By drafting off the support, relationships and visibility of recognized partners, our status has been enhanced by a “halo effect”.
- We work with the top chefs in the finest restaurants in the world
- We travel to world destinations where we have friends waiting
- We support causes that align with our values to build and sustain our community.
We create opportunities to have fun and give back. These relationships amplify our relevance and impact.
Finally, and perhaps the most important element in creating a luxury brand, is a term I call Mystery.
If all of the above are in alignment (Authenticity, Provenance, Integrity, Passion, and Ecosystem) there forces at play that we cannot understand or control.
We have to let go. This requires surrender, regardless of any powers that we can bring to bear. It imbues humility and allows us to enjoy the ride.
At the end of the day, we can take neither credit nor responsibility. As vintners, we are dancing with Earth. She has large feet and always leads. Certainly on my journey, the forces that have contributed to our success could never have been orchestrated or foreseen.
In closing, when creating a brand, any brand, it is important that meaning is conveyed at every opportunity. I cannot say this enough: You must touch a person’s heart.
Our logo represents an H for Halleck. More importantly, it expresses “one to one”, as depicted by the Roman numerals. We intend to have personal contact with everyone who enjoys our wine. Hence we invite people to our home, share meals, travel across the country and the world to meet them, and invite them on trips around the world.
Viewing the dot as a grape, it has served as a plant of power for 8,000 years. This is 1,000 years before Mesopotamia and the birth of civilization. One might surmise that wine contributed to civilization. It was most certainly in the realm of the spiritual practitioner, healer, or shaman. Wine is sacred in all the major religions. And for good reason. It has the unique ability to connect us: to each other and powers beyond ourselves. It can elevate a conversation and enhance intimacy, building community. The circle represents our community.
This spirit is what carries us forward and imbues meaning into every bottle, glass, and moment. We are grateful to be doing this work.