Recognition for their fast-selling “Leaping Horse” wines aimed at entry-level consumers is only the latest in a series of milestones for Lodi, Calif., grower-vintner John H. Kautz and his family.

In January at the Unified Wine and Grape Symposium in Sacramento Kautz received the “Rising Star Award” for the new line of Cabernet Sauvignon, Merlot, Chardonnay, White Zinfandel, and Shiraz retailing at $5 to $6 per 750 ml bottle.

The new selections, which join Kautz' Ironstone Vineyard's existing core ($8 to $12) and reserve ($15 to $25) brands of leading popular varietals, were launched in January and February of 2003 and earned an 87 percent sales growth during that year.

Kautz, who has accumulated 5,000 acres of vineyards around Lodi since he started growing wine grapes in 1968, was a founding member of the California Winegrape Growers Association. He was president of the California State Board of Food and Agriculture from 1990 to 2001.

“We were hoping to sell 50,000 cases of Leaping Horse, but sales went to nearly 350,000,” said Kautz. The majority was sold in the eastern U.S., and, surprisingly, only a small portion was sold in California. “Now we have to go to work on studying the demographics to find out who's buying it.”

The triangular-shaped label, featuring a stylized horse and rider poised in midair, is also color-coded by variety. “The label itself is appealing enough,” Kautz said, “for consumers to pick it up. Then once they've tried the wine, they are back buying it again.”

Success factor

Leaping Horse, he said, owes some of its acceptance to the phenomenal success of JFJ Bronco Winery's Charles Shaw label, also known as “Two-buck Chuck,” priced at $1.99 per bottle at Trader Joe stores. Those sales absorbed much of the California glut of bulk wine.

“Consumers have found they can buy some excellent quality wine at very low prices. That has in turn encouraged them to experiment with other wines, and it possibly has had some effect on people trying and buying our wines again, even at double or triple the price of Two-buck Chuck.”

A native of Lodi, Kautz has been in farming all his life and started on his own farming tomatoes in 1948. Always mindful of the Lodi district's warm days and cool nighttime breeze ideal for grape growing, he later developed his vineyards and in 1971 planted the first heat-treated Cabernet Sauvignon in the district.

Over the years, he was also an early proponent of Merlot and chose varietals such as Cabernet Franc, Petite Syrah, and Syrah for their utility either as stand-alone wines or for use in blending.

Now each season the Kautz family crushes 30,000 tons at their Bear Creek Winery at Lodi and 3,500 tons at their Ironstone Vineyards winery at Murphys. The combined output yields more than 700,000 cases per year, making theirs the 18th largest winery operation in the U.S.

Family involvement

John and his wife Gail are chairman and vice chairman, respectively, of the family corporation, and their four children have principal responsibilities.

Stephen manages the Ironstone Vineyards operation, Kurt handles the farming and Bear Creek Winery, Jack oversees property development and sales, and Joan is in charge of exporting to 44 countries.

John said the Ironstone venture came from much planning and selection of a site for both farming and tourism. Their property at Murphys was originally selected for apple and grape growing because of its climate: “above the fog and below the snowline.”

The Ironstone name comes from the very hard bedrock formation blasted away to form caverns for cooperage.

They broke ground for the winery at Murphys in the fall of 1989 and made their first crush in 1991. Modeled after a Gold Rush-era stamp mill, it opened to the public in 1994. The structures and grounds — including award-winning gardens — host weddings, conferences, and cultural events. At times, weekend visitors number 2,000 to 3,000.

The plan was to build a winery and enhance their label at the same time. A label can be built in either of two ways, Kautz said. One is to spend millions on advertising and promotion. The other is to spend the same amount on a beautiful facility that will generate credible coverage in newspapers and magazines to attract visitors.

“When people see a facility like this they remember forever. When they see an advertisement they remember for only a very short time.”

Industry changes

Consumers, now oriented toward higher quality at lower price, are changing the way the wine grape industry does business. Many industry leaders, including Kautz, believe the change is structural and not another of the periodic boom-and-bust cycles of the past.

“It's going to have a long-term effect on a lot of growers in the coastal areas. They will have to compete, given the prices wineries will be willing to pay, during the next few years, and I don't know if they can do it.

“I also think it's going to be a while before growers see much over $500 a ton for any variety. And at four tons to the acre as an average over the years on the coast, $2,000 an acre doesn't even cover direct costs.”

Needs for success

Anyone who plans to survive in grape growing, he added, will have “to produce quality grapes, with a balanced sugar-acid ratio, at pretty low prices.”

He added that the wine grape dilemma is not confined to California. “Argentina, Chile, Australia, New Zealand, South Africa, the south of France, and even Eastern Bloc counties, are expanding their capacity and want the U.S. market.”