Situated on the rolling hills of Lake County, Calif., Shannon Ridge Vineyards & Winery takes a no-nonsense approach to developing its wine business. By Brooke Knudson

Shannon Ridge Vineyards & Winery’s Lake County property abounds with shallow and gravelly volcanic soils that help grapes thrive because of their ability to quickly drain water.

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When you’re a part of an industry that contributes more than $52 billion to the state’s economy, it takes more than a fancy bottle to maintain a competitive edge. Fortunately for Clay and Margarita Shannon, owners of Shannon Ridge Vineyards & Winery, their 20 years of experience in the industry has taught them a few things about what it takes to build a winery business in California.

But the husband-and-wife duo didn’t come into the business looking only to gain the upper-hand on the competition. Their story also has hints of innovative thinking and a few notes of good luck.

The Shannons hatched the idea to launch a vineyard management and development company in Lake County, Calif. They had worked several years for mega-producer Sutter Home, which used wine grapes grown locally in its various blends.

“We worked for Sutter Home for 10 years, and in 1993, we decided it was time to leave and invest in ourselves and do our own thing,” Shannon says. “We wanted to go out on our own and start in the vineyard management and development business. We were all about hard work and forming customer relationships.”

In 1995, the Shannons started their business with 400 acres they had purchased in the High Valley region of Lake County. The property abounds with shallow and gravelly volcanic soils that help grapes thrive because of their ability to quickly drain water. Shannon notes it was also considerably less expensive than land just 35 miles south in Napa County. In 2004, the two released their own wine under the Shannon Ridge brand.

The winery sells 2006 varieties of red and white wine, including Barbera, Cabernet Sauvignon, Chardonnay, Grenache, Sauvignon Blanc, Syrah, Viognier, Wrangler Red, Zinfandel and Petite Sirah. Prices range from $14 and $19 per bottle. The company will soon sell 2007 varieties of white wine.

In addition, Shannon Ridge supplies grapes to 50 wineries, including Beringer, Kendall-Jackson, Korbel and Mondavi. In some cases, Shannon Ridge sells as much as one-ton lots of fruit to its clients. Annually, the company grow more than 2,000 tons of grapes. About one-third of product grown goes into the Shannon Ridge brand and two-thirds is sold to other wineries, which use the juice of the grapes in their own blends. Shannon says the goal for the future is to have this trend reverse, as its own brand grows in popularity.

Of the 1,000 acres Shannon now owns, only about 40 percent are converted to vineyards in order to maintain the ecosystem. Varietals, rootstocks, clones, vine spacing and row direction are matched to the soil composition and sun exposures. Because of the jagged characteristics of the mountain slopes, most of the vineyard blocks are small, averaging less than three acres each.

Humble Approach
When you talk to Clay Shannon about his vineyard and winery, he doesn’t make you feel like an outsider in an insider’s club. His approach to the business is not that of an elitist, a title which some people associate with a wine connoisseur.

And although he has the knowledge and experience that ranks him up there with some of the big hitters in the industry, Shannon is decidedly humble in his business approach: Maintain a connection with the land, work hard and produce a quality wine that people can enjoy.

“We’re able to compete with the big players – both the imports and domestics – because we are able to maintain a cost of goods and we own our own vineyards,” Shannon asserts. “About 95 percent of our grapes are estate grown and we farm them ourselves. We don’t have a vineyard management company – we are that company. We have all of our own labor and trucks.”

Shannon Ridge employs knowledgeable staff, including two winemakers, a vineyard manager and three regional sales managers. “Most of the best people are never the people you have to search for – it just happens,” he asserts.

The wine grape growing business is a tough one, burdened by steep overhead costs, stiff competition and labor-intensive work. “What we are learning is that there is no significant money to be made in the business, but we are moving product and building volume doing something we enjoy,” he says.

Aware that success comes from patience, Shannon says the company has established incremental sales goals. “Our 10-year goal was to [sell] 100,000 cases, and now that’s our five-year goal,” he says. “There’s a lot of luck to this, but I believe the definition of luck is hard work and grabbing an opportunity when it comes along.”

Shannon Ridge’s mantra is also different from the industry giants. “There’s a lot of relationship-building and focus on the old ways that America used to do business,” he says. “We remember to say ‘thank you.’ We run this as a family operation. There are times when I’m the first to answer the phone. I don’t think big companies can compete with that.

“When you compete with corporate giants, you can still be real,” he maintains. “What’s wrong with people just making a living? We don’t need to be driven by stocks.”

Beyond the Tasting Room
Although Shannon Ridge has managed to hit its stride in the marketplace, Shannon is not content to sit and watch his vineyards grow. He is experimenting with various growing methods in an attempt to enhance the fruit. “We are changing our viticulture strategies, like ripening the fruit at lower Brix levels,” he says.

A team of employees at Shannon Ridge designed a trellis system that reduces the sun exposure on the grapes. “We’re giving the plants natural sunscreen,” he notes. The cooler temperatures ripen fruit at a lower Brix level, which refers to the amount of sugar produced in the grape. Since the majority of the sugar is converted into alcohol, lower Brix levels allow Shannon to produce a wine with lower alcohol content – a fact that Shannon says he’s proud of.

“I think our brand is a relief – it’s something you can relax with and have fun drinking,” he maintains.

Part of the Club
Although Shannon says his approach is to “keep it simple,” the wines he creates are anything but. In the past five years, the vintner has received several accolades from wine-trade publications, including Wine Business Monthly’s 10 hottest small brands of 2006, Lake County’s 2005 wine grape grower of the year and several other “Best of” awards in individual wine competitions. More importantly, Shannon Ridge has a strong local following and good word-of-mouth. “I cannot say this of a lot of vineyards around here, but I have never had a bad glass of wine from Shannon Ridge,” says Lake County resident and Shannon Ridge wine club member Suna Flores. For a small membership fee, Flores is among the first to receive newly released and award-winning vintages.

“To me, it’s not just the wine,” Flores adds. “It’s the fact that it is a part of the community and we know the people in the tasting room. It feels good to be a part of our community and a part of the marketplace.”

New Elevations

When the average wine consumers is asked to describe the top domestic wine grape growing region, more than likely they think of California's Napa and Sonoma valleys. While these regions might have earned their rank at the top of the list, one of the state's hottest grape growing regions is emerging in Lake County.

The first vineyards were planted in the region in the 1870s, and soon thereafter, Lake County wines were winning international awards. But in 1920, prohibition changed the terrain of the county, and vineyards were replaced with other crops. Then, in the early 1960s, a few growers rediscovered the area's potential and new vineyards were planted. Since then, grapes have largely been sold to other wineries to produce a blended wine. Today, the county boasts 145 growers, several of which are a mix between large and small acreage family owned and operated establishments.

"We're a reemerging region for wine grape growing, and one of the things that has happened in the last 15 years is that we have become the blend for other wines," says Shannon Gunier, executive director of the Lake County Winegrape Commission. "About 80 percent of the grapes we grow go into wines in Napa and Sonoma and to other parts of the United States."

A $40 million industry for the county, wine grape growing is becoming a larger part of the state's wine industry, and growers have the climate and soil to thank for it. More than 8,800 acres of vineyard in the county boarder the state's top viticulture regions, situated just 35 miles north of Napa and east of Sonoma and Mendocino counties. Unique microclimates, red and rocky soil types, clean air and proximity to Clear Lake, the largest freshwater lake in the state, has helped make the region ideal for wine grape growing.

"We have very mountainous vineyards, the lowest of which is around 1,400 feet. We have the highest concentration of vineyards in Northern California," she says. "There's a belief that mountain fruit is of a higher quality."

Although geographically beneficial, Gunier admits that Lake County would not be the successful wine region that it is today without its growers.

"We have been lucky in that sense," Gunier says. "Napa is crowded now. We have a lot more growers who are coming up here who grew grapes in other places, [such as Clay Shannon] and brought with them the state-of-the-art equipment and were savvy growers before they got here.”