Kosher Vintner Takes Root

Peter Stern is embarking on an unlikely project for a Catholic boy raised in Napa Valley: He’s going to help build the biggest kosher winery on the West Coast.

Stern won’t be able to crush the grapes or even pull a sample from a barrel. Though he belongs to a synagogue in Los Gatos, Calif., with his wife and children, he hasn’t converted.

Fortunately, he’s Royal Wine Corp.’s chief winemaker -- and at a major winery, Stern said, “the chief winemaker is rarely the hands-on person. He just administers.”

Royal will break ground for the $13-million, 73,000-square-foot winery next month in Oxnard. With the capacity to produce 220,000 cases annually, it will, if it opens as planned next fall, be the largest new winery in California since the boom of the late 1990s.

It also will be the largest kosher plant producing dry varietal wines in North America. Every step of the production process -- from grape crushing to fermenting to bottling -- will be conducted by Jews who strictly observe the Sabbath. That is one reason Royal decided to build the winery in Southern California, 400 miles from the famous wine-growing regions of Napa and Sonoma but “closer to an observant community,” Stern said.

Analysts say Royal’s plan is a vote of confidence in the state’s wine industry, which has been buffeted by a grape glut, a flood of foreign imports and cutthroat price competition. “Right now there isn’t too much investment ... and there are only a few wineries in that same size category that are expanding,” said Paul Dolan, president of Fetzer Vineyards in Hopland, Calif.

Royal, which makes only kosher wines, is owned by the Herzog family, whose winemaking roots date to 19th century Europe. The company, based in Bayonne, N.J., has produced California wine for years, blending and bottling its last five vintages at Central Coast Wine Services -- a rent-a-winery in Santa Maria that provides the equipment necessary for making wine, but not the grapes and the workers.

Now that Royal is selling more than 130,000 cases annually, it’s ready to settle down. “If you are selling premium wines and you are growing, you need a home,” said David Herzog, Royal’s chief executive.

With annual sales of about $63 million, according to Hoover’s Inc., Royal’s California brands include the flagship Baron Herzog label, the Herzog line of premium reserve wines and the Weinstock brand. The wines typically sell for $5.99 for a bottle of Chenin Blanc to as much as $79.99 for a 1997 reserve Cabernet Sauvignon.

Royal looked at various sites in Northern California, Stern said, and considered making a run at the Louis Martini winery in Napa Valley, which was purchased by E. & J. Gallo Winery in 2002.

“But the reality was that we could never staff it,” Stern said, because there are too few observant Jews in Napa and the other rural communities of California’s wine regions.

Wine is so important to Jewish ritual that it must be treated with special care to remain kosher, said Rabbi Menachem Genack of the Orthodox Union, the nation’s largest certifier of kosher products. Kosher wine must be made by Jews who, from sundown Friday to nightfall Saturday, don’t work, drive or even turn on electrical appliances as they observe the commandment to rest at week’s end.

Over the last 17 years in California, Stern said he had seen 350 employees come and go in his search for religious Jews who “really know the wine business” and were willing to stick with it.

One who has is Josh Goodman. Hired eight years ago as a temporary employee when Royal rented production space in a Northern California winery, Goodman is now cellar master for the company in California. But he doesn’t live in Santa Maria, where Royal’s California wines are made now; he commutes 135 miles at least twice a week from Agoura Hills, where there is an Orthodox Jewish community.

Once the winery in Oxnard opens, his commute will be about 30 miles.

Other Jewish members of the Royal winemaking team commute from such places as Santa Barbara and North Hollywood. The winery has about 16 employees, depending on the time of year, and not all are Jewish.

The Oxnard location won’t hurt Royal’s ability to get premium grapes, because it’s not uncommon for grapes and wine-quality grape juice to move all over the state during the fall harvest, said Bill Turrentine, a San Anselmo, Calif., bulk-wine broker and industry consultant.

Stern plans to buy and crush grapes from Northern California and Central Coast vineyards, then ship chilled juice in tanker trucks to Oxnard, where the juice will go into 63 fermentation and blending tanks ranging from 1,000 to 50,000 gallons.

The Royal operation in Oxnard will include the usual amenities, such as a tasting room, but may tweak tradition by including a kosher deli.

“This is not the type of gamble you typically see in the wine business, where people spend millions of dollars to open a winery in hopes of building a brand,” Turrentine said. “Royal already has the brands, and they already know what their sales are.”

Kosher was once synonymous with the syrupy sweet style of Concord grape wine produced by Constellation Brands Inc.’s Manischewitz label. Now, kosher wines like the Herzog and Weinstock labels compete in taste and quality with the Cabernets, Chardonnays and other varietals of mainstream producers.

Royal’s Herzog brand regularly wins medals at tastings and favorable reviews from the Wine Spectator and Wine Enthusiast oenophile magazines. Its $5.99 Chenin Blanc -- sold by the big grocery chains -- has won praise from wine critics as one of the best wine values around, kosher or not. Two other California wineries, Hagafen Cellars in Napa Valley and Gan Eden in Sonoma, also have made inroads into the kosher market.

“People who don’t drink kosher wines would be comfortable drinking these wines because they are good and reasonably priced,” Turrentine said.

At Royal, Herzog said he remained frustrated by the “sweet” stigma many consumers attach to kosher-labeled wines. He has struggled to persuade large grocery chains to carry the product year-round and battled to get the wine in the wine aisle rather than the kosher foods section.

And kosher is a tiny market. Stern estimates the kosher wine industry worldwide makes only about 60 million bottles a year, which would make it a $400-million to $500-million business.

“All the kosher wine in the world amounts to just one day’s crush at Gallo,” Stern said.

After working for Gallo and other California wineries, Stern went out on his own as a consultant in 1981. He got into the kosher wine business when the owner of an Israeli wine company saw his last name, assumed he was Jewish and hired him.

Stern said he believed a permanent home for Royal’s California operations would put the company on equal footing with the best of the state’s 900 other vintners. Royal finally will have its own barrel room where temperature and humidity can be carefully controlled, and the equipment to experiment.

“It will be great for sales,” Stern said. “We will be able to bring people in the trade there and entertain them on the property just the way it is done elsewhere in this industry.”