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Wine Industry Executive Profile: Eric Morham

    (Editor’s note: This is the first in a series of Business Journal profiles of prominent wine industry executives.)



ST. HELENA – Eric Morham comes to the top spot of one of the nation’s largest luxury and fine wine companies at a time of transition both for the wine business and Icon Estate’s parent organization.

Consumer tastes have been trending upscale, and the Millennial generation of new alcoholic beverage consumers is opting for higher-end consumer products, including wines. Polls in the past couple of years have suggested wine is outpacing beer as the first choice among U.S. imbibers.

So this is a good time for someone with three decades of experience in marketing and selling higher-end beer and wine to be appointed president of Icon Estates, part of Constellation Wines U.S.

New York-based Constellation Brands formed St. Helena-based Icon Estates in 1999 with the acquisition of Franciscan Estates and has steadily been adding wine operations. The most notable was Robert Mondavi Winery in Oakville as part of the $1.3 billion acquisition of the company in 2004.

Today, the business unit has 13 estate wineries producing more than 3 million cases a year in the North Coast, Central Coast, Canada, Italy, New Zealand and Australia. Retail prices for the wines are mostly in excess of $20 a bottle with some, such as Robert Mondavi Winery reserves, selling for more than $100.

For three years leading up to his appointment to the new position in January, Mr. Morham was senior vice president of international sales at Robert Mondavi Corp. before the acquisition and eventually oversaw all Constellation Brands North America exports.

Though Mr. Morham spent nearly two decades in the beer business with Holland-based Heineken, he started his career with Andres Wines in Toronto in the 1970s, eventually rising to senior management. In the early 1980s, he shifted to Canadian sales and marketing for Heineken subsidiary Amstel Brewery. In 1986, he moved to headquarters in Amsterdam to direct efforts in Africa, Middle East, Asia and Australia. Five years later, he led the transition team after the acquisition of Heineken’s U.S. importer.

It was good training for wine sales because it required a focus on the uniqueness and quality of the product rather than simply the price. “Heineken was sold at a 50 percent premium in price to domestic brands,” Mr. Morham said.

When Heineken wanted him to go east to Hungary in 1999, Mr. Morham opted to move to Napa, serving as president and CEO for five years at Napa-based Delicato Family Vineyards, now called DFV Wines.

At Icon Estates Mr. Morham replaced Chris Fehrnstrom, who now is president of the newly formed VineOne business unit in San Francisco for premium and superpremium-priced wines. The shuffle was corporate strategy to focus on fast-growing, higher-margin brands.

To further that goal, Constellation in December acquired Healdsburg-based Beam Wine Estates and sold the value-priced wine brands.

The largest Beam brand, Clos Du Bois in Geyserville, was put into VineOne along with Beam brands Geyser Peak, Buena Vista Carneros and Gary Farrell. Paso Robles-based Wild Horse Winery & Vineyard joined Icon Estates. Constellation is rumored to be seeking buyers for Geyser Peak, Buena Vista and Gary Farrell.

Consolidation of luxury wine producers by large companies – Constellation’s revenues were $5.2 billion in fiscal 2007 – has made some worry about corporate recipe winemaking or cost cutting resulting in lower-quality wine.

“Some were concerned when Constellation became involved it would not be a good thing,” Mr. Morham said. “It turned out to be a very good thing.”

Case in point, the 2004 Mondavi reserve cabernet sauvignon earned a score of 95 from prominent wine reviewer Robert Parker recently. Constellation has given Icon Estates winemakers relatively free rein to make wines worthy of their bottle prices, contributing buying power for costly pursuits such as top-end barrels, reconfigured vineyards and a potentially dwindling North Coast supply of key winegrape varieties.

Bottle price increases are likely because of rising costs, but keeping prices in line with quality will be important as will be communicating that quality to the trade amid reports of softness in the economy, according to Mr. Morham.

Though data indicates Americans are cutting back a bit on dining, a key market for Icon Estates wines, U.S. sales of wines retailing for more than $15 a bottle continue to grow at rates in the high single digits to low double digits. That suggests purchases for home use.

“How it will play itself out and where it will go I don’t know, but it is encouraging that affordable luxury continues to be important to people,” Mr. Morham said.

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