Case Study Frog's Leap Winery

John Williams established Frog’s Leap Winery along with Larry Turley in the city of Napa Valley. The Winery develops it first Sauvignon Blanc and Zinfandel. Their first employee was John’s wife Julie Williams. John had been working for Spring Mountain as the head winemaker. In 1985, John decided to leave Spring Mountain and work full time at Frog’s Leap. In 1989 the company certified its first organic vineyard. Soon afterwards, Frog’s Leap released Merlot in 1992. However, in 1993 John and his partner Larry agreed to create separate wineries. John and Julie purchased Frog’s Leap from Larry and began looking for a new home for their winery. Larry began Turley Wine Cellars. Frog’s Leap was recreated after the purchase of Adamson Winery

By the year 2010, the winery had produced over 60,000 cases, mostly red wines. The winery staff grew 100 percent over the next 12 years. Majority of the workers were fieldworkers. There were 3 managers that reported directly to John in 2011. Frog’s Leap purchased over 100 acres of vineyards in the surrounding area of Rutherford. The company sales increased from seven million to twelve million in 2010. Over 75 percent of the company sales in U.S. were a result of resellers. About seven to eight percent of the company net sales were exports to Japan. They sold the remainder to consumers from their tasting rooms and hospitality center which opened in 2006. In 2008 through 2010 recession, the sales of alcohol had become very important to wineries. The wineries wanted to make sure they reduced any backlog inventory of wine. The winery benefited from direct sales to consumers. This led to higher gross profit margins for wineries than the sales to retailers and other resellers. The wineries were able to charge the full retail price and give a discount to members of the wine

Only two of John’s wines had been reviewed. Frog’s Leap adopted an organic and biodynamic growing technique for its winery. The winery used healthy, living soils and health living plants that resisted any disease. Frog’s Leap believed in producing better quality wine. Later Frog’s Leap began to move toward using energy sufficiency by investing in geothermal and solar energy. The solar system did cost around 1.2 million. However, the winery was able to receive a cash rebate from the local power utility company in the amount of 600k. Frog’s Leap managed to remain profitable during the recession is 2009 and 2010. In 2012, Frog’s Leap produced its first Estate Grown Cabernet Sauvignon. Frog’s Leap has become a leader in the winery business for over 2 decades.

Recommendation

Frog’s Leap must continue to focus on strengthening their distribution channels, marketing and sales. The winery must focus on expanding online selections and working with restaurants and distributors and organic vineyards. Frog’s Leap must pursue economic growth projects in the short-term. They must expand out the direct-to consumer sales channels. The winery should also expand its export