Exclusive: Constellation Buys Napa Cabernet Star Schrader Cellars

Posted: Jun 18, 2017

Source: Schrader Cellars

Drinks giant Constellation Brands has purchased Napa Valley cult winery Schrader Cellars, founder Fred Schrader told Wine Spectator. The blockbuster deal gives Constellation one of the elite names in Napa Cabernet, known for its Beckstoffer To Kalon Vineyard cuvée and several other notable bottlings.

The deal includes the brand and long-term contracts with multiple distinguished vineyards. Schrader owns no vines of its own. Neither side would disclose a price, but Constellation will be required to eventually as a publicly traded company. Schrader Cellars produces between 2,500 and 4,000 cases of Cabernet from Beckstoffer To Kalon, Beckstoffer Georges III in Rutherford and Las Piedras Vineyard in St. Helena annually. The sale includes the 2015 and 2016 vintages, which are still in barrel, as well as part of the winery’s inventory.

Fred Schrader said the agreement is for the new owners to leave the operation and brand alone. "It makes perfect sense," Schrader told Wine Spectator. "They’re committed to keeping this an elite brand and build on it. For me, it’s my legacy." The Schraders have no children or heirs. Thomas Brown will remain as winemaker, production will continue at Outpost on Howell Mountain, and Fred and Carol Schrader will stay on as the public faces of the company. The Schraders retain ownership of their two Pinot Noir labels, Boars’ View and Aston Estate.

"The Schraders have created something truly unique and unparalleled in wine," said Constellation’s Sam Glaetzer, senior vice president for wine and spirits production, in a statement. "Their unwavering commitment to quality vineyards and winemaking has built a portfolio of world-class wines with an elite and loyal consumer following."

The winery has made as many as six or seven different Beckstoffer To Kalon bottlings each year. Bottles from the 2014 vintage sold for $200 each. The winery also makes two marquee brands, the iconic "Old Sparky," a label designed by Carol Colesworthy Schrader employing Fred’s nickname, and CCS, for her own namesake label. Both of those are limited-production wines, roughly 80 cases each, bottled only in magnum, selling for $450 a bottle.

For Fred, 67, the sale keeps alive his dream of creating a legendary brand and winemaking legacy. He began his career as a partner with Ann Colgin at Colgin-Schrader. He separated from that brand when they divorced.

His initial attempt at Cabernet on his own wasn't so promising. In 1998 he bought grapes from Gaudeamus Vineyard on Atlas Peak, a very cool area for Cabernet. He'd hired the well-regarded John Kongsgaard as winemaker, but the 1998 vintage was one of the toughest in decades, an abnormally cold, drawn-out season. A second vintage from the same site yielded similar results and convinced Schrader that he needed a better vineyard and a winemaker more in sync with the style of wine he hoped to create.

Schrader had memorized mentor Helen Turley's playbook. "Don't get in the way of the wine," she had drilled in him, he says. "If you've got the right vineyard—the right grapes—you can make great wine." He discovered To Kalon through a barrel sample of Behrens & Hitchcock Cabernet. He says he immediately drove to Andy Beckstoffer’s office to secure a lease to buy grapes, making his first 100 cases of Beckstoffer Cabernet in 2000. He married Carol in 2005.

The Schraders don't own Napa Valley Cabernet plantings, yet have created a distinctive style of opulent, ageworthy Cabernets based mostly on Fred's palate. Under Brown's direction, the Schrader Cabernets are regularly among the highest rated from Napa Valley.

The deal has a wrinkle that could well benefit Schrader Cellars going forward. Constellation owns most of To Kalon Vineyard through its ownership of Robert Mondavi Winery. Schrader and Glaetzer told Wine Spectator that once the deal settles, Brown and Mondavi winemaker Genevieve Janssens will decide which parcels of the Mondavi To Kalon Vineyard Cabernet would stay with Mondavi and which might go to Schrader. That could allow Schrader to increase production incrementally, Schrader said.

For Constellation, one of the world's largest winery owners and owner of beer brands Corona and Modelo, the deal is the latest in a series focused on premium wines. In 2015, it bought Pinot Noir brand Meiomi for $315 million. A year later it bought The Prisoner red blend brand for $285 milllion. Both of those brands were expandable. Meiomi has passed the 1 million case mark, while Prisoner has reached 158,000 cases. Schrader will not grow to that size, but it adds a prestigious luxury brand to the portfolio.

By James Laube
June 16, 2017
Source: Wine Spectator

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