America’s largest wine company continues to expand, particularly with Pinot Noir and Chardonnay. E.&J. Gallo announced earlier this week that it has acquired Hahn Family Wines, one of the most notable wine companies on California’s Central Coast. The deal gives Gallo three new brands—Smith & Hook, Hahn, and Hahn SLH—but excludes the Hahn family’s impressive 1,100 acres of prime vineyards.
According to Impact Databank, the entry-level Hahn Founders line, priced between $10 to $15 per bottle, has an annual production of 300,000 cases, accounting for roughly two-thirds of the portfolio. The company’s Smith & Hook brand is known for Cabernet Sauvignon and Bordeaux red blends from Paso Robles and the Central Coast, while Hahn SLH is dedicated to premium offerings from the Santa Lucia Highlands, ranging up to $50.
The deal helps Gallo broaden the medium-priced potion of their portfolio and give it a larger presence in Pinot Noir. “Our strategy is to make wine as inclusive as possible, to serve as many consumers in as many occasions as we can,” Steve Carlotti, Gallo senior vice president and general manager, told Wine Spectator. “And I think the Hahn portfolio frankly offers us some opportunities. Our real opportunity is to broaden our footprint with wine consumers. That’s what the premise of the deal was for us.”
Hahn has been one of the more striking California wine stories of the past 50 years. Nicky and Gaby Hahn purchased the Smith Ranch and Hook Ranch in the Salinas Valley in 1979, and converted them to vineyards. A Swiss immigrant, Nicky was a fierce advocate for the Santa Lucia Highlands and helped the region campaign for American Viticultural Association recognition, which it was granted in 1991.
Originally, the winery was focused on Cabernet and Merlot. But by the early 1990s, the Hahns realized the Santa Lucia Highlands was promising Pinot Noir and Chardonnay terroir and began replanting. They also kept expanding their vineyard holdings, eventually owning more than 1,100 in Santa Lucia Highlands and Arroyo Seco.
In the meantime, they grew not one, but two, best-selling mass market brands from scratch. First was Rex Goliath, featuring a circus poster label depicting a 47-pound rooster. In the space of just three years—from 2002 to 2005—Rex Goliath went from 70,000 cases to 500,000 cases. Hahn sold it to Constellation Brands for a reported $40 million. Next was Cycles Gladiator, which they grew and then sold in 2014.
Since then, Hahn has been on a premiumization campaign. Among its more recent launches is a line of Arroyo Seco appellation wines under its Hahn Appellation Series, including a Pinot Noir, Chardonnay, and Grenache-Syrah-Mourvédre (GSM) priced at around $20 per bottle.
Sadly for Gallo, Hahn’s notable vineyards, including the Doctor’s Vineyard and Lone Oak, were never part of the offer when Hahn approached executives.
“I am pleased to transition our Hahn Family Wines portfolio to the E. & J. Gallo Winery,” said Thomas Duhameau, president of Hahn Family Wines. “Not only do we share similar family values, but both organizations are deeply committed to creating a sustainable future.”