North Coast vintner Derek Benham's 36-year relentless pursuit of innovation
Derek Benham’s 36-year journey to become an influential North Coast vintner and budding craft distiller didn’t start auspiciously.
Raised in Bakersfield at the southern end of the San Joaquin Valley wine region, Benham graduated from University of California, Berkeley, in 1982 with double degrees in English literature and philosophy, but the deep economic recession at the time left him with few job options.
At age 25, he took a job in sales at a Lodi-area winery on the verge of bankruptcy, not knowing much about selling wine.
Later, he convinced the family to let him try to turn the business around, and over six years he managed to stabilize the operation to sales of several hundred thousand cases annually then sell the operation for them.
“It was a brutal education for me,” said Benham, now 60.
In the process, he started down the road of becoming a virtual vintner. The European negociant model, where a producer contracts for fruit, bulk wine and production time at wineries, wasn’t that common in the mid-1980s.
In 1990, he took that knowledge and joined forces with his brother Courtney to form Codera Wine Company. Two years later, they purchased a winery that had been converted from a former Hallberg apple cannery in the western Sonoma County community of Graton. Among the couple hundred thousand cases a year of control labels Codera produced at seven facilities for various retailers was Blackstone, originally a chardonnay brand made for Cost Plus. Codera got the OK to tweak it with Napa merlot and distribute it to on-premises accounts in the Bay Area. That was around the time of the French Paradox publicity about health benefits of red wine, and merlot at the time was a new category.
The brand grew to 650,000 cases a year before Constellation Brands purchased it in 2001.
“We started Blackstone with $25,000 and sold it for $144 million,” Benham said. “That was by far my best return.”
But that success came at a high cost, he said. His relationship soured with his brother over the value of the sale.
“We’ve mended fences in the family, but it is never as it once was,” Benham said.
Derek Benham used his share from the sale to start Purple Wine Co. in Graton in 2001. He built it largely with the Mark West pinot noir brand, plus the Avalon, BEX, Blue Jean and Rock Rabbit brands, joined by Four Vines in late 2011. When Mark West reached 600,000 cases a year, or more than half of Purple Wine’s production, Benham sold it to Constellation in 2012 for $163 million.
One reason for the sale of Mark West was a chance to retool the culture of the company from the $10- $12-a-bottle “fighting varietal” brand model that had been successful. By that time though, higher-end wines were driving sales. With new brands Raeburn, Calisto and Scattered Peak have pushed bottle prices into the $18-plus range, with $45 for cabernet sauvignon. He launched Graton Distilling Company in 2015 and now has D. George Benham and Redwood Empire labels in the $35-$70 range.
From three facilities (Graton, American Canyon and Olivet Road), Purple Wine + Spirits annually makes up to 5 million cases of contract brands and crushes 15,000 tons of grapes. Early next year, sales and marketing functions will be relocating to a new office in Petaluma.