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Michael Mondavi Buys Carneros Creek Winery

California facility will be home for his family's new I'M, Oberon and Hangtime brands

Eric Arnold

Posted: Monday, August 21, 2006

Michael Mondavi, son of California wine pioneer Robert Mondavi, has bought Carneros Creek winery in Napa from Francis and Kathleen Mahoney. Mondavi, who now owns Folio Fine Wine Partners with his wife, Isabel, and son, Rob, will produce their recently started I'M, Oberon and Hangtime brands in the facility. For the next three to five years, the Mahoneys will continue to make their Mahoney Vineyards and Fleur de California wines there as well.

"It gives us more credibility," said Mondavi of the purchase, the price of which was not disclosed. "Something I learned very early was when we did Opus One in 1979 with Baron Philippe de Rothschild; he said, 'We can use the Robert Mondavi winery for a few years, but it needs a home. It needs a vineyard and a winery to have credibility in the international wine community.'"

Michael Mondavi resigned as vice chairman of Robert Mondavi Corp. in September 2004, amid the publicly traded company's plans to divest itself of luxury brands such as Opus One and focus more on lower-end brands such as Woodbridge. Later that year, the corporation was acquired by Constellation Brands, the world's largest wine company, for $1.3 billion. By the time of his departure, Michael had already started I'M, and he quickly set up Folio Fine Wine Partners, which has acted as distributor for his own brands and other California producers, as well as the U.S. importer for several brands from Italy (including Marchesi de Frescobaldi, Robert Mondavi's former joint-venture partner), Spain, Austria and New Zealand.

Until now, I'M, Oberon and Hangtime have been produced at various facilities, including Carneros Creek. Oberon encompasses Napa Cabernet, Merlot and Sauvignon Blanc; the Hangtime label covers California Pinot Noir and Chardonnay; and I'M includes a Rosé and Sonoma Chardonnay. The brands range in price from about $13 to $18.

"It was a question of when, not if we would have a winery," said Mondavi. "We were taking our time, and we kicked the tires on probably a dozen wineries and seriously looked at three or four others. The beauty is we'll now be able to consolidate and really focus on everything in one wonderful location. Those wines now have a home." The only exception is the I'M Pinot Noir from Oregon, which will continue to be produced and bottled in the Willamette Valley, and is slated for a 2007 release.

Carneros Creek winery, which the Mahoneys founded in 1972, comes with a tasting room and 5 acres of Cabernet Sauvignon planted around the facility. The deal also includes an option to buy 10 more acres on a neighboring property in 2008, which Mondavi plans to exercise. The Mahoneys, who sold the Carneros Creek brand in 2004 to focus on their other lines, are retaining ownership of 160 acres of vineyards in Carneros.

Folio also plans to use the fruit from its 18-acre vineyard on Atlas Peak for its own brands; Mondavi said that vineyard's Cabernet Sauvignon went into Opus One in the 2002, 2003 and 2004 vintages. Folio also owns a 270-acre property in Pope Valley, of which 110 acres are planted to Cabernet Sauvignon and Sauvignon Blanc. Mondavi said that another 30 acres of that land will be planted over the next few years for the Oberon and I'M brands.

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