The Science of Staying Power: Trefethen’s Winning Formula

Like a large locomotive, Trefethen Winery doesn’t turn on a dime. It doesn’t start something quickly and it takes time for it to stop and maneuver. Being a part of the third generation of a family-owned company means large growth isn’t a necessity for CEO Jon Ruel. 

Ruel is the first CEO from outside of the Trefethen family. Yet, in his chat with Vintner he slipped in ‘our family’ when talking about the ownership more than once. It shows how much he feels he is a part of the company that he joined in 2004 and has risen from working as a vineyard assistant to CEO of the Napa Valley winery. Although the company is the family, the farm is the wine and Ruel is quick to combine the two. The dirt and the blood are the success and the growth.

“Wherever [multi-generational businesses] can succeed, you have to take the long term view,” Ruel said. “It’s true in agriculture, specifically, you need to take care of your land if you want that land to give you good crops 10 years from now … or a generation from now.

“It’s important for those reasons that we take the long term view. It’s specifically because of our business model and those constraints.”

That doesn’t mean functioning on a five-year plan or even a 10-year forecast. Instead, Ruel sets out each year to plot success in the vineyard 25 years out. Above his desk is a plot of the two vineyards that the winery maintains: a total of 440 acres. Every 20 acres is a part of a year and a lifecycle for the future.

“I know the vines in each pocket have a character, and its personality,” Ruel said. “Maybe it’s a difference in rootstock or trellis or variety, but at some point, that block is going to come to the end of its life and be replanted.”

But that 25-year plan is constantly updated by Ruel.

“I think one of the things that has kept me so engaged … one of the benefits of this estate model — and what I really worked on when I first got here — was the connectedness between winemaking and viticulture. The exchange of information. The result is measured in the glass, but the work is in the vineyard. You have to connect those.”

Ruel said they taste everything blind, from competitive tastings done in-house against other wineries or to each block of grapes, even blends. All is done with many of the 160 employees from all over the business taking part, not just the winemakers and family ownership.

“We’ll sit down with 26 different Chardonnays,” Ruel explained. “We start to unveil which blocks scored well across the group and for what reasons. Then we go into what we did in the vineyard? And if we say, ‘Oh we limited the irrigation or we increased the yield, or that’s that new clone we planted.’ We take that information, and we put it right back into the business. So the next time we have an opportunity to plant Chardonnay. I can say let’s plant backflow. Why? Because the block that we planted two years ago was doing really well. It just made it into this wine.”

Ruel is so ingrained in the function of the vineyard not just because Trefethen only uses its estate’s grapes, but because his background started in those fields. Not completely unheard of, but with no MBA or business background, Ruel runs the company now and admits he is a long-term placeholder and mentor for the next generation of Trefethens to run the family business.

“As a scientist by trade, evidence-based decision making is one of the fundamental ways I’m integrating science into our companies,” he said. “How do we measure things appropriately, and then use that information to make smart decisions right back into the company.

“Often when you’re in school, you’re learning about science, I had to talk in generalities, and even when you get to viticulture, they might talk in generalities. … But when you’re running a business, you realize it kind of doesn’t matter what happens on average, it matters what happens at your address, like not just in your zip code, but on your farm. If you’re a corn farmer, it’s nice to know what your neighbors are doing. But it really matters how your crop did last year, and what could you do differently this year to do it better. And that iterative process of constant improvement using the variables that we have, at the scale that we do. To have nine different varieties planted in one ranch, to have 13 different combinations of clones and rootstocks — just in Chardonnay — gives us a living laboratory to constantly be learning and then putting that information back into the business. And that’s how we grow and evolve.”

Ruel says that Trefethen is a unique size for a Napa Valley winery as it’s bigger than 10,000 cases, but it’s not in the millions either. Even though it does have a robust Direct-to-Consumer wine club of more than 6,000, it also looks for lots of on-premise sales and connecting with off-premise retailers in smaller chains while also driving consumers to the tasting room.

“I love a direct connection to the consumer,” Ruel said. “I love getting them here on the property, showing them how beautiful it is here, sharing the stories of how we grow the grapes and making the wine. They become fans for life.

“Does that mean they’re always buying the wine directly from us? No, they buy it at a wine shop and at a restaurant.”

Pre-COVID, Trefethen was still doing more than half of its volume through wholesale with half of that sold in restaurants. But because the winery is, as Ruel said, a 52-year-old startup company, the pandemic hasn’t been quite as bad as they thought.

“People really like our wine, we have incredible brand loyalty built up,” he said. “We didn’t have any decrease in demand. Just like a regular recession, people get to drinking. It’s just a question of what they’re drinking and where they’re drinking it and what they’re paying for it. So COVID has very much been a channel disruption, more than anything else. It didn’t disrupt demand, it just disrupted the path for the consumer.”

Another category that Ruel says they call outbound sales, where the winery is calling and emailing customers to touch base with them has also been a boon.

​”​I think demand for on-premise is going to just be nuts when restaurants can really open ​and we can all breathe again​,” Ruel said​. ​”I think what we’re ​going to see in late 2021 is the rebound of the restaurant industry. And it will be very much like the ​’Roaring 20s,​’​ which is the last time this country recovered from a pandemic.

​”​On top of that, we’re gonna recognize some incredible silver linings. One of them​ is ​the increase in internet wine sales. We’ve been so late to the game there, both as wineries and as consumers​.​ ​We are used to buying everything online, it’s super easy​. Wine​?​ I’ll get that at the grocery store. It’s such a bizarre shopping habit​.​​ I think we’re going to have greater customer engagement for internet sales​. It​ has been very much accelerated, incredibly more than I could have ever imagined, and that that will stick.​”​

Being a more mature winery that is seeing its new generation of owners take over — John and Janet Trefethen’s children Hayley and Lorenzo have started to work with Ruel to run the company on a day-to-day basis — that means also connecting with a new generation of wine drinkers.

“You probably won’t get your favorite brand of tequila from your parents, but you probably are going to get a favorite wine brand from your parents,” Ruel said in likening the succession of running the company to the consumers Trefethen has. “I have been at many of our consumer events where they say, ‘Hey Jon, I want to introduce you to my daughter, she just turned 21 and we gave her a membership to your wine club.’ That’s perfect. That’s succession and brand loyalty. That’s one path.

The other path means capturing Haley and Lorenzo’s energy, he said. The younger Trefethens are becoming more of the face of the company to the public and on its website.

“I think that people are going to find them very relatable,” Ruel said, noting that John and Janet are much more blue jeans and boots people than high heels and loafers.

“They’re just not fancy people. They’re very grounded, very down to earth. And that’s true with Haley and Lorenzo as well,” Ruel said. Along with a younger face, being what the winery has always been but marketing it differently is also key. Being able to tell the story of how the wine is grown on the property is a key aspect.

Giving experiences, like sharing food tips online from the winery’s chef, to showing consumers how to pair the wine at home gives value to many new consumers.

“I want take-home value,” Ruel said. “I want someone to walk out of here and go, ‘That wine was amazing. That food was amazing and Honey, I want you to plant tarragon, because the chef said if we just had that fresh herb, that that would be just transformative to anything we did with chicken.’

“It’s trying to give him some little tips that they can use in terms of food and wine pairing or cooking. And then they’re gonna say, ‘Oh, yeah, I learned that at Trefethen, I met the chef.’ That’s just a way to create that experience, that engagement. And the next time they come back, they bring their friends and maybe they sign up for a different kind of experience. We’re building a relationship and a connection with them that is very authentic.”

John and Janet Trefethen built the winery on its Chardonnay, but Ruel said when he joined in 2004 John pushed him to improve the reds. Using that science background, Ruel worked with the staff to discover what the land could offer and the best ways to develop red wine grapes on the land.

“I have a lot of reasons and now I really understand what makes Napa so special beyond the climate and the soils,” he said. “We’re in a cool spot in Napa Valley. We’re in the Oak Knoll district and we’re closer to the Bay. We get a strong marine influence: fog and breeze rolling in in the afternoon or evening, keeping us quite cool until 11 or noon the next day. So it just doesn’t get as hot as it does up in Santalina, Oakville, or Calistoga. We like to call it the Napa Valley sweet spot where Chardonnay overlaps with Cabernet. But we have to be really smart about how we do the Cabernet. Every vintage, we have to pay attention. And it’s not to say that before I got here, the red wines were no good. There was some exceptional wine, but they weren’t consistently exceptional.”

It certainly is a category that has changed the most in Ruel’s tenure, specifically Cabernet, but also a newer blend called Dragon’s Tooth that launched in 2007 which has Malbec and some other varieties. But that took telling John Trefethen early in his tenure at the winery to rip out plots that were less than 10 years old to start over with a better Cabernet plot.

“It was a financial hit on us, but boy, are we glad we did,” Ruel said. “The younger blocks are now producing, it’s like night and day. We’re just paying attention on a very detailed level in terms of the farming, doing the work that needs to be done.”

It’s not that Trefethen turned Oak Knoll into Oakville.

“That never was our goal, we want to taste like Oak Knoll,” Ruel said. “What is Cabernet when it’s grown on the cooler side of Napa Valley? Well, it’s ripe without being overripe. It’s not shying away from a touch of herbaceousness, like maybe just a little bit of a bay leaf. But what you want is fruit. Fresh, ripe, fruit and freshness on the palate.

“We make wines with real acidity that comes from the grapes. That definitely includes the red wines. If I was to taste the wine blind, knowing the Trefethen, it’d be the brightness. The signature brightness on the palate, it really sets our wines apart. If I’m comparing them to red wines that come from up valley where it’s warmer, and the winemakers are shooting for a style of jammy … beyond ripe. They’re gonna end up with a wine that has less acid, that’s just the basic chemistry — as sugar goes up, acid goes down — as the grapes hang out. Sure, they get jammy flavors — but the acid every day they hang out there, especially in the warmer environment — starts to fade away. So they either add acid, or they have a wine that’s kind of flabby and doesn’t age well.”

Ruel said that Trefethen is making wines that parallel with food, because they have good acidity, and they’re going to go the distance as they will age beautifully because they go into the bottle with natural acidity in the grapes.

“That’s really key to our style. And just fits so nicely into this narrative,” he said. “This is a long term business. The Trefethens believe that they deserve a reputation as being a world-class, multi-generational family-owned estate. And if that’s true, your wines shouldn’t go bad after a year or two, they should only get better.”

Photo by Adrian Gregorutti

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