A $315 Million Bet on Pinot Noir

The amazing rise of Joe Wagner’s Meiomi brand surprised him as much as anyone. He developed the wine to grab hold of a wave of enthusiasm for Pinot Noir in mainstream America. But he also took full advantage of that wave, making an outstanding wine at a good price and maintaining quality as he grew by building relationships with grapegrowers across California.

Wagner announced today that he has agreed to sell the fast-growing label to drinks giant Constellation Brands for $315 million. The deal is expected to close in August.

Wagner, 33, began developing Meiomi in 2006 while he was still working as a winemaker at Caymus, the winery headed by his father, Chuck, and founded by his grandfather Charlie. Meiomi grew out of Belle Glos, a small Pinot Noir project named after his grandmother, Lorna Belle Glos, that focused on vineyard-designated Pinot Noirs.

The Wagners turned Belle Glos into a standalone brand in the aftermath of the 2004 film Sideways, an unexpected box office hit that helped trigger a boom in Pinot Noir sales at a time when only serious wine lovers were familiar with the grape. “Nobody cared about Pinot Noir [before Sideways],” Wagner, 33, said in an interview with Wine Spectator Wednesday. “After its release, all bets were off and you couldn’t make enough Pinot. [It] changed the dynamics of the industry for Pinot Noir.”

Suddenly the grape was in great demand. But when the recession hit, Wagner created a lower-priced wine sourced from multiple vineyards, hoping to draw more attention to Belle Glos. Meiomi is a Wappo Indian word for "coastal," according to Wagner. The Wappos were indigenous people who lived in what is now Napa before the Spanish arrived.

Initially Meiomi was part of the Belle Glos line, but as the wine gained popularity, Wagner needed more grape sources, and he separated Meiomi into its own brand, sourcing grapes from coastal vineyards in Santa Barbara, Monterey and Sonoma counties.

In 2010, Meiomi sold 90,000 cases. Last year, it hit 550,000 cases, and Wagner says the brand, which retails for around $25 a bottle, is on pace to sell more than 700,000 cases in 2015. Meiomi is roughly 97 percent Pinot Noir, with small amounts of other grapes, including Riesling, Gewurztraminer, Chardonnay and Grenache, depending on the wine.

Like Caymus Cabernet, Meiomi has achieved a high level of quality and consistency. The key to its success, said Wagner, has been finding top vineyards. “There’s a constant struggle to maintain the consistency at this high level,” Wagner said. “If you don’t have consistency you can’t win over the hearts of wine lovers.”

Wagner credits the personal connections he has developed with growers who respect his family’s wine business. “Like anything in the wine industry, it comes down to relationships,” he said. “When people hear about what we’re doing and how we’re doing it, word spreads. Growers are interested. We’re paying top dollar,” he added, in the $2,800- to $3,500-a-ton range, “and we pay on time.”

Each of the coastal appellations adds something to the Meiomi blend, but clearly Monterey “gives you the most bang for the buck.” Because it is an isolated area and not a tourist mecca, fewer vintners have focused on its vineyards.

As part of the deal with Constellation, Wagner will remain associated with Meiomi for the next two vintages, and he expects the brand to continue to grow, as long as grape quality remains high and production facilities available.

While it was hard to part with Meiomi, the sale will create plenty of opportunities for Wagner’s company, Copper Cane Wines & Provisions, a wine and luxury goods firm based in Napa. “This deal is out of character for me,” he said. “We’re not in the business of building and selling brands.”

Copper Cane was founded by Joe Wagner through his father Chuck’s generosity and support. While Meiomi’s growth and Joe’s focus on his own company at times strained relations with his father, “we are on the same page,” said Joe. Between Chuck and his three children, the Wagners also own Caymus, Conundrum, Mer Soleil and Emmolo.

Joe hopes Copper Cane will provide a similar foundation for his own children. He has six of them, ages 18 months to nine.