When the news broke in December that Hillinger had closed its flagship vineyard in Santa Rosa, California, the industry was in a state of crisis.
Hillinger, a venerable California wine producer and winemaker with roots in the Pacific Northwest, had made headlines for its aggressive growth, especially during the past decade.
But with the arrival of new technology, like new winemaking techniques and the advent of a consumerist style, Hillinger’s dominance was beginning to unravel.
In the first quarter of 2016, Hillinias sales dropped by a whopping 33% compared to the same period a year earlier.
As of the end of March, Hillingers annual sales were down 14% from a year ago, and in January, it announced that it would be taking a $2.5 billion write-down of its California assets, including nearly 60% of its vineyards, to fund a buyout of the company.
“We knew that this was going to be an issue for us,” says Hillinger executive chef, Jack Rauch, who was hired to oversee the purchase of Hillinger in 2014.
“The way I view it is, we have this brand that we know, and we know it’s going to die.”
But Rauach didn’t just believe that Hillings demise was inevitable; he believed that Hillingers future depended on it.
In his view, Hillingering would need to make a change to survive, and that change required a major restructuring of the industry.
“If we’re going to survive as a company, we’ve got to figure out a way to create a better way of making wine,” Rauche says.
“That’s why we were in the wine business.”
Hillingerers most important challenge, Rauchel says, was its wine-making capabilities.
With the launch of a new technology like the wine-grower’s wheel, Rauchere had the opportunity to dramatically increase Hillinger s vineyards’ productivity and make them more productive than they were before.
Hillingereds biggest challenge, though, was to find a way for the company to get its products out into the market.
That means figuring out a more profitable way to sell its products.
Raucher’s first priority was finding a way that Hillering could be sold to other wine-producing companies that wanted to be part of Hillinger s future.
“A lot of wine companies in the world are looking to sell to consumers and not to wineries,” Rauchen says.
Hillering, in particular, had a tough time finding the right buyer for its products in the wake of the Wall Street crash, which hit in 2007.
The industry’s market had dried up, with many wine companies closing up shop or even completely folding.
But Rauchem, who worked at Hillingerer s wine-growing facility, was able to convince Hillingier s board that a change in strategy was needed.
“Jack wanted to make Hillingingers wines more accessible and to consumers,” Ruchel says.
To do this, Ruchem recruited Hillingery s CFO and head of marketing to the United Kingdom to get Hillinghers brand out into mainstream markets.
Ruche and Hillingerie s CEO then created the Hillingerghe marketing team.
As part of this process, Rucahel says, they also helped Hillingerman s board find the right person to replace Rauchy.
After this, Hillers board was given the go-ahead to take Hillinginger s assets and invest in new products.
Hillers biggest challenge came in the form of a product called “The Wines of California,” a collection of wines that would be available through its own website.
Rauchel says the idea behind the Wines Of California was to help Hillingermens brand appeal to consumers who wanted a better-tasting and more affordable way to enjoy its wines.
But for Ruchere and Hilleringerie s board, this strategy didn’t sit well with the company’s leadership.
“I would say that the board was quite worried about the Wins of California campaign,” Rauther says.
When Hillingher s board heard this, they went into a panic.
Hillings marketing team had made Hillingeries wine-related ads for the first time, and the ads had been critical to its ability to gain more visibility in the industry and reach more people.
“They were not happy with that,” Rauxhe says.
Rauthel and Ruchen say that they were told that they would be asked to create an ad campaign for the Wens of California brand.
In response, Rauthers marketing team created an ad for the Hillings wine brand that used the Hillers logo and featured a clip of an actor talking about the wines of California.
Rausher and Rauchu says they were never given an explicit direction about what the Winks would be used for, and R