GO
Loading...

Donald's Wine Deal Isn't Traditional Sponsorship

On the surface, it looks like just another bottle of wine with a label thrown on it to try to get it to sell. But the Luke Donald Collection, named after the world's number one golfer, is anything but.

The truth is that Donald knows exactly where the grapes in Napa Valley that are used for his wine come from and he knows the exact blend that makes up its flavor.

Luke Donald Collection Wine
Credit: Terlato Wines
Luke Donald Collection Wine

The deal that paired the British golfer with a wine company is hardly a traditional endorsement deal.

Bill Terlato of Terlato Wines International, which makes the wine, met Donald while he was at Northwestern University. Donald's coach Pat Goss was giving lessons to Terlato.

As Donald vaulted into the professional ranks, the two became friends, which led Donald to approaching Terlato about having his own wine label.

"We don't just slap a label on a bottle of wine," Terlato said.

And Donald didn't want to do that type of deal, either.

"He tasted wines from more than sixty vineyards," Terlato said. "We did it for several days, with and without food."

In the end, Donald picked a combination of Merlot, Cabernet and Cabernet Franc grapes to make up his Claret blend, named after the trophy given to the winner of the Open Championship. The winery later added a Chardonnay.

The wines are not cheap. The Claret retails for $40, the Chardonnay prices out closer to $30. But Terlato says that's exactly the place to be in the wine world these days.

While wines that retail for more than $15 only makes up five percent of sales, it's the fastest growing segment, thanks to millennials, the 70 million people aged 21 to 31 who value the qualities associated with more premium brands.

Only 1 out of every 20 bottles of wine are purchased for at least $15, but it's double that for millennial's. Donald, 33, is appealing to that demographic simply because he's just outside that age bracket.

Most brands who are associated with Donald are expected to do what capitalists do, capitalize. The odds of companies who have deals with Donald, including Mizuno, Ralph Lauren, Tittles and BC, using him more now that he is on top of the world is natural.

Funny thing is, Terlato could care less about making a buck off his friend.

In the four years Donald's brand has been on the market, Terlato's company has never made more than 3,000 cases of his wine. And he doesn't see that changing. Terlato is content with Donald's brand selling out every year to keep the fans coming back.

There's also no advertising push other than a congratulatory ad here and there on Uncorked.com, a direct-to-consumer wine retailer.

What's unique about this deal is that neither of them need each other.

Donald earning millions as the current money leader of the European Tour and the PGA Tour. Terlato sells more than 18 million bottles of wine every year, owns 10 percent of the $15 and over US business and oversees 60 brands in 11 countries, including Chimney Rock and Rutherford Hill.

"In the end our friendship is bigger than the business," Terlato said.

"What Luke's wine is, is a great wine and it just happens to be associated with a great golfer."

Questions? Comments? SportsBiz@cnbc.com

Featured