Alex Ryan received his first handwritten paycheck from Dan and Margaret Duckhorn in 1981, when he had a part-time job at their winery while he was in high school.
Now, 38 years later, he’s president and CEO of Duckhorn Wine Company and winning accolades as Wine Enthusiast magazine’s Wine Executive of the Year.
Ryan accepted the award during a Jan. 28 black-tie gala in Miami Beach, Florida. The other local honoree was Stag’s Leap Wine Cellars founder Warren Winiarski, who was named American Wine Legend.
Last week, Ryan shared his thoughts on running a successful winery at a time when the local industry is being rocked by changing distribution models, political controversy, and the acquisition of family-owned wineries – including Duckhorn – by beverage conglomerates and private equity firms.
“Maybe I was lucky enough to receive the accolades, but I didn’t make this company great,” Ryan said, giving the credit to a team of employees who “fit our culture.”
“We all think alike, we’re all focused on the same goal, we’re all smart, normal, balanced egos,” he said. “We have great people working here, and with all those people come good decisions in the marketplace.”
In the last few years, Duckhorn has acquired two Pinot Noir producers, Calera and Kosta Browne, and itself been acquired by San Francisco-based TSG Consumer Partners. GI Partners had previously bought a controlling interest in Duckhorn in 2007.
Ryan, who’s been president and CEO since 2005, said he’s worked to maintain Duckhorn’s culture during those acquisitions.
“A good investor is not going to break apart something that works,” he said. “TSG has allowed me to keep a culture of growth, innovation, and advancement for employees intact. … Compared to when Dan and Margaret Duckhorn were running the company, I like to think we do things similarly on a larger scale.”
Ryan has witnessed the vast proliferation of wine labels in an industry that was once dominated by families who were just trying to make a living.
In the previous era, “People started wineries because they were passionate about it,” he said. “They didn’t bring a lot of money with them. These were jobs, and they had to make it work so their families could get a paycheck. It wasn’t an ego thing or a vanity thing.”
There’s nothing wrong with the way the industry has evolved – things are just different now, Ryan said, adding that consumers emerge as the big winners, with more choices than ever.
Increased competition among wine labels and the rise of new regional appellations, aided by technology that has enabled fledgling winemakers “to get good fast,” have caused some price compression and forced wineries to step up their marketing, he said.
“In the old days, marketing was ‘Hi, I’m John Shafer, I’m Robert Mondavi, I’m Dan Duckhorn. Would you like to try my wine?’” Ryan said. “It was pretty effective. … Now marketing is becoming, by necessity, more sophisticated, with professionalized sales approaches. It’s a natural evolution.”
A consumer can buy a bottle of Duckhorn wine at a wine shop in Connecticut or at the winery on Lodi Lane “and I can assure you your feelings about that wine will not be the same,” Ryan said. “You will not get the same feeling of place, of connection to the brand. I guarantee it.
“That connection to the consumer, to help differentiate ourselves among the masses of labels and the proliferation of brands, is critical,” he said. “The marketing aspect of selling a bottle of wine at the winery is 10 times more valuable than selling one at a retail shop somewhere else.”
The critical importance of direct sales has sparked difficult discussions about what Ryan called “the agriculture/urban interface.” Wine grapegrowing regions like Santa Barbara, San Luis Obispo, Washington and Oregon will start to see some of the same controversies pitting residents against wineries, he predicted.
“Grapes like to live – go figure – in these same great areas where people like to live,” he said. “That will continue to cause some hard discussions between residents and industry. … A lot of convicted, dedicated people on both sides of the issue are going to have to come together and compromise.”
“Grapegrowing is just one part of agriculture,” he added. “The agricultural output of Napa Valley is fine luxury wine, produced, sold and marketed in Napa Valley. So when people say ‘we want to maintain our agricultural roots,’ it’s cute, but it’s phony, because that agriculture is supporting luxury-tier wine, period. That’s a controversial statement that both sides are going to have to wrestle with and come to agreement on before we can start a healing process or a long-term integration process of industry and local residents.”
Ryan offers this advice for young people just starting out in the wine business — be willing to pay your dues.
“If you want to be on the production side, you have to start as a cellar rat,” he said. “You’d better learn Spanish – if not formal Spanish, at least cellar Spanish. You’d better be willing to come in on the weekends, nights and do the extra things that help the winemakers get their job done.”
“If you’re in the vineyard business, you need to learn vineyard Spanish, be able to lean on a shovel, like hot days and not complain, and work your way up,” he said. “If you want to get into the other side of the business, I’d recommend starting in a tasting room. … You’ll hear all the questions you could possibly hear about the business from the public.”
Just as important as hard work is passion, Ryan said.
“We’re a relatively small industry, so when you go to your first job interview at a winery, bring your passion,” he said.