Washington’s best-known winery has rung the changes, replacing its long-serving head winemaker. By W. Blake Gray | Posted Saturday, 20-Feb-2021
Washington’s most important winery has made a major change, as head winemaker Bob Bertheau is out after 18 years at Chateau Ste. Michelle.
Bertheau has been replaced in what the company called “a mutual parting of ways”. Juan Muñoz Oca, who coincidentally has also been with the company since 2003, will continue as chief winemaker for the large Ste. Michelle Wine Estates portfolio. He will be assisted by Katie Nelson, who recently returned to Ste. Michelle after working for several years for well-known Washington winery owner Charles Smith. Nelson will take over winemaking responsibilities for the flagship Chateau Ste. Michelle brand, which Bertheau had been responsible for.
“Our numbers haven’t been what we want or expect them to be,” said Ryan Pennington, senior director of communications and corporate affairs for Ste. Michelle Wine Estates. “I don’t think that really factors in here at all. There was nothing that Bob did that was any kind of fault. The wines are as good as they’ve ever been. Bob was ready for new adventures. We were looking for the next generation to take over winemaking. The timing seemed right for both sides.”
Bertheau, a Seattle native and UC Davis graduate, could not be reached for comment.
The move comes at a time of great upheaval for Chateau Ste. Michelle and the entire Washington wine industry. Chateau Ste. Michelle has struggled with sales in recent years and has been cancelling grape contracts. In November, former Treasury Wine Estates chief David Dearie took over as CEO, an unusual move for a company that usually promoted from within.
Allen Shoup was CEO of Chateau Ste. Michelle for nearly two decades; he hired Ted Baseler to be marketing director in 1984, and Baseler succeeded him as CEO in 2000, staying in the job until 2018.
The company was bought in 2009 by Altria, the tobacco giant that also owns Philip Morris. When Baseler retired, Altria promoted Philip Morris senior VP of human resources Jim Mortensen to replace him. Dearie is now the second CEO in three years after two in 34 years.
Dearie’s time at Treasury wasn’t exactly a rousing success: a 2014 story by the Melbourne, Australia Herald Sun said Dearie “was handed a $1.3 million golden parachute after being ousted from the company on the back of a disastrous performance in the group’s US division”. But even though Dearie spent less than two years running Treasury, he did gain relevant experience with declining sales, as Treasury was forced to destroy $35 million in unsold, deteriorating cheap wine in July 2013. Chateau Ste Michelle similarly was forced to write off some unsellable inventory last year.
The wider impact
Vicki Scharlau, executive director of the Washington Winegrowers Association, said that Chateau Ste. Michelle’s problems are reflective of wine industry problems all up and down the West Coast. Washington, like California, was overplanted at a time when it seemed like wine sales would rise steadily forever. But international wine sales began dropping several years ago and domestic sales had gone flat before the pandemic, especially in the lower-priced wines where Chateau Ste. Michelle had always overdelivered on quality. Now, even some formerly prized vineyards in Washington have been plowed over and replanted to carrots.
“There are companies retooling up and down the coast. This is not a Washington problem. This is a West Coast problem,” Scharlau told Wine-Searcher. “Ste. Michelle is incredibly important to the state of Washington. They have always been a key player. They have always been a partner for the industry. If they are retooling, we’ll all feel it.
“I think the industry has really done some deep introspection on where we are but also where the future is: where the trends are, what consumers are doing, and the shift that has been coming because of Covid,” Scharlau said. “We don’t operate as Washington state. We operate as an industry. When the market pivots, we all have to move.”
On Wednesday, new chief winemaker Oca, a native of Argentina whose appointment has not yet been formally announced, tweeted: “It’s important for leaders to be both strategic planners and strategically agile. Strategic agility refers to gathering insights and redefining value propositions. Strategic agility is about creating situational awareness via market trends. #Leadership.”
Pennington said that Ste. Michelle is looking for “fresh perspective” from its new head winemakers.
“I don’t think that’s uncommon in a number of creative fields,” Pennington told Wine-Searcher. “Katie has, both through her work with Charles and with us, developed her own perspective that will help us in a new and interesting way. Winemaking is a creative endeavor and she brings her own perspective to it. Women have distinct palates from men. It will be interesting to see how that is reflected in the wines.”
Pennington said the company is not announcing any large changes to its product lineup.
“We continue to be one of the global champions of Riesling,” Pennington said. “We continue to explore the challenging breadth of what Washington offers as well. We have been in a changing position with our leadership. Through that transition we haven’t been as vocal and public as we have been previously. We’re settled in now and looking forward to getting back to being more public.”