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San Francisco Chronicle
6 days ago
- Business
- San Francisco Chronicle
How a California wine company created the nation's bestselling spirit
It's America's unofficial beverage of beach days, tailgates, frat parties and music festivals. Its tagline is simple: 'real vodka + real juice.' But this slender can of High Noon, with its cheery yellow sun set against a blue sky, is the surprising growth vehicle for the largest wine company in the country, a product that's rewritten the rules of the alcohol industry. Launched by wine giant Gallo in 2019, High Noon had by 2022 become the top-selling U.S. spirit by volume, dethroning vodka powerhouse Tito's. High Noon — 'Nooners' to its most avid followers — has expanded to 14 flavors, plus a line of tequila seltzers and hard iced teas. Last year, its production grew 13.5% to just under 25 million cases a year, according to alcohol industry publication Shanken News Daily. High Noon's meteoric rise may seem remarkable for a wine company, but it speaks to a calculated strategy developed over decades. The winery that the Gallo brothers started in Modesto in 1933 has diversified in recent years and quietly grown into a spirits behemoth. Fueled by the success of High Noon and New Amsterdam vodka, which Gallo founded in 2008, it's now the second-largest spirits producer in the U.S. That shift has proven useful, since spirits, driven largely by canned drinks, is the only type of alcohol whose consumption is growing. As the wine industry continues to flounder — per capita wine drinking in California hit a 30-year low during the last fiscal year, according to state data — High Noon could be Gallo's ticket to riding out a global downturn. Make it vodka High Noon did not start as a hard seltzer. But in 2018, as Gallo executives watched the exploding popularity of seltzers White Claw and Truly, they wanted to get their own product to market quickly. It was October, and Gallo chief commercial officer Britt West set an ambitious goal of launching something by Memorial Day. But creating a new brand and trademark would take longer than that, and West didn't want to simply lob the product onto an existing brand, as had been done by breweries like Corona, with its Corona Hard Seltzer. Luckily, Gallo already had a brand at the ready. The company was market testing a traditional vodka called High Noon. 'We said, 'That's the perfect name,' said West, 'so let's stop doing that test.'' What set High Noon apart from the rapidly growing competition was that it was made with vodka. White Claw and other hard seltzers get their alcohol from malt, making them more similar to beer than to a cocktail. 'Consumers didn't really understand what the alcohol type was, what the base was,' said West of hard seltzers. When he was out at bars, he'd ask seltzer drinkers what they thought the alcohol was. Most of the time, they'd say, 'Vodka, right?' There seemed to be a notable lack of transparency. 'The insight (was) really very simple,' West said. 'If people think it's vodka, why don't we make one that actually is vodka?' That decision looked like 'a risky move' to Ron Alvarado, founder of the San Francisco hard seltzer brand Ficks. Being spirits-based meant that High Noon couldn't be sold in certain retail environments, like any grocery store or gas station in Texas. And because a vodka-based drink would be taxed higher than a malt-based one, High Noon would be meaningfully more expensive than its competitors: A 12-pack costs $25.99, as opposed to $20.99 for a 12-pack of Truly and $17.49 for White Claw. 'But the way the category has changed, it's been a smart bet for them,' Alvarado said. Vodka sounds more 'premium' than malt liquor. 'They've clearly carved out this niche as a higher-quality product.' That first summer, High Noon took off in popular destinations like the Jersey Shore and the Michigan lakes. West had been wise to rush: Within a year, the COVID-19 pandemic hit, and the hard seltzer category boomed. Retail sales jumped 160% between 2019 and 2020, according to NielsenIQ data. By 2021, roughly two to three new hard seltzer products were launched each day in the U.S., said Marten Lodewijks, president of alcohol beverage data analyst IWRS Americas. The pandemic presented problems, too: West recalled having to air-freight cans from Malaysia during the because of an aluminum shortage in the U.S. But High Noon was 'the right beverage for the right time in that scenario,' he said, perfect as people spent time outdoors hiking, golfing and picnicking. In the summer of 2021, High Noon's sales were up over 300% from the previous year. In 2022, they surpassed $1 billion. Targeting the tailgate In June 2023, an old-timey sailboat pulled into the Boston Harbor flying a High Noon flag. Onboard were 342 cases of the company's newest product — vodka iced tea — an homage to the 1773 Boston Tea Party, in which protesters tossed 342 chests of British tea into the harbor. Cheeky marketing stunts like this one — a stark departure from the wine industry's often stodgy approach — have been a cornerstone of High Noon's success, especially among younger generations. Last year, a 'Baywatch' spoof featured a buff, shirtless and heavily oiled High Noon 'Lifestyle Guard,' whose job is to rescue not lives, but parties. Arguably the brand's most powerful marketing engine is a strategic partnership forged in its early days. In 2020, High Noon initiated a sponsorship with Barstool Sports, one of America's largest sports media companies. 'We started thinking, where do spirits have a hard time going?' West said. The answer: 'Tailgating. You need ice, you need a cup, you need glass, which isn't convenient and it's heavy, and you need mixers.' He wanted to target venues where 'beer really, really wins,' he said, converting dedicated sports-fan beer drinkers to High Noon drinkers. Barstool has a core audience of 21 to 30 year olds, said West, and does an annual college tour centered on tailgating. 'As a young brand, we felt we didn't have quite the money and the budget to immediately be highly relevant,' he said. 'Beer advertising dollars are big dollars. We didn't have the money to go head-to-head with those Super Bowl sponsorships, so we had to be clever about it.' The partnership exploded in visibility, fueled by personal endorsements from Barstool founder Dave Portnoy, who has regularly claimed to be 'the face of High Noon.' The company has its own 'El Pres' High Noon variety pack, a reference to Portnoy, plus a Nooners merchandise collection of T-shirts, hats, swim trunks and can coolers. Last month, High Noon launched a spin-off product, Lucky One Vodka Lemonade, a reference to Portnoy's dog. More recently, High Noon has found a surprising new market: golfers. In 2024, it became the official spirits-based hard seltzer of the PGA of America and the PGA Championship, one of the sport's four majors. The partnership, which includes a High Noon clubhouse on the tournament course, came just as golf is experiencing a major revival, largely due to the popular Netflix docuseries 'Full Swing.' High Noon also launched a giveaway with NBA player-turned-golf podcaster J.R. Smith and a collaboration with trendy golf apparel company TravisMathew. 'Golf is traditionally associated with an older audience, but it's continued to get more diverse in people who play and watch,' said Luke Reissman, PGA of America's senior director of global partnerships. 'It's gotten younger, it's become cooler and there are more content creators and influencers than ever. High Noon has a younger following and an energetic marketing vibe, so when they reached out to us, it was a pretty easy thing for us to get excited about.' At Bay Area golf courses, High Noon has largely replaced the light beers that golfers would previously have toted through the course. It's the most popular drink order at Lake Merced Golf Club in Daly City, said clubhouse manager Bob Mazer, outselling the most popular beer almost two to one. He attributes its success to the fact that High Noon seems to have transcended other seltzer brands' associations with specific demographics. 'Hard seltzer used to be a woman's beverage, a college kid's drink,' Mazer said. But with High Noon, people — even middle-aged male golfers — 'aren't embarrassed to drink it.' Just another fad? Despite High Noon's success so far, history is not on its side. While the hard seltzer category is relatively new, the concept of 'ready to drink' (RTD), industry lingo for pre-packaged mixed drinks, 'has been around for decades,' said IWSR's Lodewijks, pointing to past fads like Mike's Hard Lemonade, Smirnoff Ice and Gallo's Bartles & Jaymes wine cooler. 'They would spike for a short period and then come back down,' he said. 'There's a general concern that RTDs may do the same thing.' Zima, a malt-based drink whose meteoric rise in the 1990s mirrors that of High Noon, provides one of the most sobering history lessons. MillerCoors grew the clear beverage to 1.3 million barrels at its peak, only to fall two years later to around 400,000, undone apparently by its women-centric marketing approach. It was the highest-profile casualty of what came to be known as the decade's 'clear craze,' a trend that bears several similarities to hard seltzer. West is acutely aware that the wave High Noon has been riding may not last forever. With new product types 'it's like a gold rush, everybody jumps in,' he said, 'and then at the end of the day, the top one, two, maybe three brands survive.' The shakeout has already begun. Ficks, for one, discontinued its hard seltzer brand last year due to increased competition, now focusing solely on its cocktail mixers. But if any hard seltzer brand is likely to survive, High Noon is surely one of them, and Gallo is going all in. Although it has produced spirits since 1975, when it introduced E&J Brandy, it's High Noon that has transformed the nation's largest winery into its second-largest spirits producer. Since creating High Noon, Gallo has made other spirits investments, like acquiring the RumChata brand in 2021, and while Gallo is certainly not divesting from wine — the company produces an estimated 25 million cases of High Noon and 94 million cases of wine — the spirits focus has put it in a much stronger position as wine consumption declines. Gallo's strategy looks somewhat similar to that of wine conglomerate Constellation, which in April sold off many of its lower-priced wine brands as it shifts its focus to beer, the one category in which the company is experiencing growth. Lodewijks believes hard seltzer is more likely to have staying power than the fads that came before it. RTDs now represent 8% of all alcoholic beverage servings, he said, and spirits-based RTDs like High Noon are the fastest-growing segment within it, up 16% from 2023 to 2024. (Malt-based RTDs were down 3%.) If part of Zima's downfall was the fact that nobody knew exactly what the product was made of — its motto, 'zomething different,' seemed only to exacerbate this confusion — High Noon has the advantage of a clear message. It's vodka and soda. When choosing an RTD, Lodewijks said the flavor, not the brand, is what matters most to consumers, and the general consensus seems to be that High Noon tastes better than the alternatives. Most of the hard seltzers out there 'are overly sweet and kinda miss the mark,' said Brett Frost, owner of the San Francisco bars the Summer Place, Wizards & Wands and Moez Tavern. 'High Noon in my opinion has the best balance.' Some Bay Area bars have stopped carrying any hard seltzer other than High Noon. Lake Merced Golf Club discontinued White Claw; Marina Lounge in San Francisco did away with Truly. Now, Marina Lounge owner Kevin 'Sully' Sullivan said he goes through six to seven High Noon cases a week. 'The younger crowd, they're definitely enjoying it,' said Sullivan, who is in his 60s. 'But the older folks are catching on too.' As he spoke on the phone to the Chronicle for this story, he admitted he had cracked open a High Noon vodka iced tea. 'Do I think it will last forever? Probably not,' said Frost. 'However, people seem to love it at the moment, so we have to adapt with the times.'
Eater
21-05-2025
- Entertainment
- Eater
Smash Burgers With a San Francisco Pedigree Are Landing in Downtown Portland
The burger game in Portland is getting another fighter in the ring. PLS on Sixth is opening inside the Hotel Zags, taking over Dave Machado's former Nel Centro space. This is the second PLS restaurant, technically; the first opened in August 2023 inside San Francisco's Hotel Zeppelin, near the city's tourist-friendly Union Square. Like the first restaurant, the main attraction here are smash burgers and 'crazy' shakes, More than just food, the restaurant offers beer, nonalcoholic drinks, and cocktails. The outdoor patio has been revamped, too, with firepits, games including cornhole and tic-tac-toe, and activities for kids such as a playhouse and sandbox. In a press release, representatives said weekend DJ events and happy hours are on deck, too, making this addition to the Cultural District more than just a hotel restaurant. The restaurant's grand opening launch party is on Thursday, May 22 starting at 4 p.m. Taquito food cart/prodigal son returns On Tuesday, May 20, Carlos Mendoza and Anthony La Pietra will bring buzzy food cart Tito's Taquitos back to Multnomah Village as a full-fledged restaurant. Oregon Live reports the two will open in the former Little Big Burger at 7705 S.W. Capitol Highway, just a mile or so from the original food cart's location. This third location will have a full liquor license; this news comes after La Pietra turned the original Tito's into chicken wing and burrito cart, Alita's, meaning no more food carts and just physical spaces for Tito's. Italian deli and bar on East Burnside Street Five years into pizza dominance Dimo's Apizza is taking over its next-door space. Dimo's Italian Specialties is under construction with owner Doug Miriello telling Oregon Live this new space will serve as deli market, bar, and Fridays through Sundays a 'refined white tablecloth supper club.' The planned opening is set for June. NE Fremont Street cocktail bar opens for breakfast With an elephant mascot in tow, Hi-Top Tavern is serving coffee and pastries at 7 a.m. seven days a week. Bridgetown Bites spoke to Ezra Caraeff, one of the owners, about the new offerings. That looks like hometown hero Coava Coffee on bar, Flour Market pastries, breakfast tacos, and lunch offerings. Sign up for our newsletter.
Reuters
29-01-2025
- Business
- Reuters
Iconic Indian nightclub Tito's mulls at least 10% equity sale before IPO
Jan 29 (Reuters) - Tito's Resorts and Hospitalities, which runs an iconic club in the Indian tourist state of Goa, is looking to sell a stake of at least 10% at a $115.6 million valuation before exploring a public offering, co-owner Ricardo D'Souza said on Wednesday. Earlier in the day, local media reported that Tito's was eyeing a valuation of 10 billion rupees through an initial public offering for small and medium enterprises (SME). Public issues by SMEs, defined as companies with an annual turnover of 50 million rupees to 2.5 billion rupees ($577,827.60-$28.9 million), have soared in the last two years. Over 159 SMEs raised 57 billion rupees through such issues in the financial year till Oct. 15, compared with the previous year's record of 60 billion rupees. An IPO, however, is not immediately on D'Souza's mind, who along with his brother David and their family owns Tito's, a key attraction in the beach state of Goa that draws millions of domestic and international tourists every year. "The valuation of Tito's, including the business, land and brand, is 10 billion rupees," Ricardo told Reuters. He declined to share Tito's financials. The firm is already in discussions with interested parties, whose names he did not mention. "Once it (the deal) comes in, the second part will be to possibly look at an IPO," he added. The broader Tito's group, which also has a presence in Thailand and the UAE, is looking to expand into the real estate and software services sectors at a time when Indian tourism is facing competition from global destinations such as Vietnam and Thailand. With Thailand approving a draft law to legalise casinos and gambling, Tito's will also aim to set up casinos in Thailand, D'Souza said, adding that the group will consider entering the casino business in its home turf of Goa. ($1 = 86.5310 Indian rupees)
