| Summary: | ARA Estates Winery (name disguised at company's request) was a well-known Napa, California Cabernet Sauvignon producer, located in the prestigious Howell Mountain wine-growing region. Established in the early 1990s, ARA Estates Winery went through several years of challenges before finding its niche. After hiring a reputable winemaker and cleaning up some of its production and marketing blunders, ARA Estates’ Accession label reached new heights with its 2007 vintage receiving a 97 score from Robert Parker. Looking to further enhance the label’s reputation, ARA Estates Winery’s management considered a price increase for the 2013 vintage from USD 55/bottle to USD 75/bottle, with plans to increase the price again to USD 90/bottle with the 2015 vintage. Although research suggested that the 25 percent of sales through the restaurant channel would not be impacted by the price increase, considerable concern was felt regarding how the more lucrative direct-to-consumer (DTC) base (about 50 percent of sales between the tasting room and the wine club) would react. To support the increase in prices and the lower-yield/ higher-cost move to estate-grown fruit, Accession’s case production was dropped from 6,500 to 4,000 cases. Risky Business ends at a crucial point where the CEO, Ethan Dorsey, needed to make a final decision concerning the pricing and brand positioning of the Accession label.
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