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The Chappellet Way: Talking About a Shared Vision

Photo by: Greg Gorman

Posted: May 8, 2008 2:35pm ET

Wineries hoping to keep their business in the family can’t start planning too soon, says Carissa Chappellet. Communication is crucial. “Once you start having the discussions, you’ve only begun,” she explained, and “when you think you’ve talked it out, even in the abstract, you’re only at the stage when you’re starting.”

Chappellet grew up in Napa at the winery and has been overseeing her family’s long-term plans for Chappellet Vineyards, a 30,000-case winery in Napa's Pritchard Hill area, in the foothills east of St. Helena and overlooking Lake Hennessy.

Founded by her parents, Donn and Molly Chappellet, in 1967, the business planning now involves her parents, an aunt and her siblings, a total of nine who are most closely tied to the business; then there are spouses and their children.

It’s been a complex but beneficial process, she says, where she and family members have worked to define their goals and set forth a vision. Her parents are in their 70s and in good health. But they’re interested in having Chappellet remain a family-owned winery.

Once the Chappellets started discussions “we realized we had common ground,” said Carissa, who is 48, an attorney and in charge of the winery’s legal affairs. “Everyone wanted this [vineyard and winery] to continue in our family.”

The juggling act includes defining roles, what the business is about and how it runs, and making allowances for deaths, divorces and buyouts. For example, one family member could be a brother, a son, head of sales and marketing and a part owner. The winery’s goals—Chappellet intends for now to maintain its present status as a Napa Valley winery at about the current production volume—and vision are things that evolve with time, said Chappellet, something the winery typically revisits at its annual meeting.

Communication among family members is perhaps the most vital tool for success, she said, as is learning to have the winery speak with one voice.

So is assessing expectations. Do family members expect to have a job with the winery? Are they entitled to special privileges when it comes to job opportunities? Do they expect dividends? And what kinds of financial gains?

One thing the Chappellets have done, Carissa said, is offer younger family members intern opportunities to learn about how the business operates.

It’s also important to back away from business. “A family business can be all consuming,” she said, and there are many times during family get-togethers when it’s tempting to talk business. Carissa said she and her family have learned to agree there are times when talk about the business is off limits. “We’ll say, OK, we’re not going to talk about work and just have some fun.”

Ryan Wilhite
May 8, 2008 6:30pm ET
Great story about a great winery. I would highly recommend visiting them. The winery is fantastic and in a great setting. There is also a great story about the red triangle symbol on the top of their foil caps and the winery.I was happy to sign up for their wine club, which is great because they have certain wines only available through club membership. I have yet to find a red wine from them that I have not enjoyed.
Lee Hammack
Virginia —  May 8, 2008 11:00pm ET
It would be great to see Chappellet continue as a family enterprise. The great success they have enjoyed is a double-edged sword. The greater the success, the more profound the complexity. Vitually every winery starts as a family endeavor. How many are now cogs in some corporate wheel . . . with ultimate allegiance more to stockholders than anyone else?
Dan Murphy
Tampa, FL —  May 9, 2008 10:44am ET
One of my favorite wineries in the Valley since the proverbial Day One. Their wines age tremendously well; the 1979 Cabernet is still drinking fabulously, if you can find any more of it. Also still in great shape are well-stored bottles of the 1974 and 1976. I must confess that I find the Pritchard Hill wines to be a bit of a misguided attempt to make an "international-style blockbuster" more in the style of one of their cult wine neighbors on the Hill, but the Signature Cabernet remains one of the best in Napa, and still a comparative value. A great winery and great people; here's to their continued success.
Sam Chen
The Golden State —  May 9, 2008 12:24pm ET
Jim,Interesting topic. Owning a winery may be a dream to many people, but it is ultimately still a business unless you plan to drink all the wines yourself. As an owner of a family business, I can see many challenges because you do take certain things for granted. For example, I can't imaging having to tell my wife that she is fired because she didn't do a good job. Oh, by the way, my wife doesn't work with me. Thank god.
Powell Yang
Napa, —  May 9, 2008 5:22pm ET
I've had the pleasure of meeting Carissa a few times in the past. She also arranged a tasting for me about a year ago at the winery. I was hosted by two younger family members the day of tasting. Recalling one of them was doing her internship at the winery and the other was visiting during her Spring break from college.

Wonderful family and certainly good wine.
Deborah Steinthal
Napa, California —  May 9, 2008 6:22pm ET
"We are co-authors with Silicon Valley Bank on the study you referred to regarding winery ownership transition planning, and have worked with over 50 winery owners to help them through these types of transitions.Chappellet's commitment to this important process is to be commended; unfortunately not enough family wineries in the same circumstances are taking these steps. I can attest to the fact that few wineries are prepared for their next phase of ownership that will maximize the return on decades of hard work and investment, whether the goal is to pass the baton to the next generation or prepare the business for an ultimate sale to a third party. The industry as a whole is still so young that not enough winery owners have been through ownership transition. This means the practices to successfully do so are not established or even being shared at an industry level. Our report shows a majority have not yet started their planning process even though they are within 5 to 10 years of exiting.As we sit at 'grandma's kitchen table', we often find that many wine families are not clear about they want to do with their business; when they do get clear, this stimulates them to start planning. As business advisors to family wineries, we often start with helping all stakeholders define what success looks like, so we can then help them map out a transition plan that ultimately gets them where they want to go." -Deborah Steinthal - Founding Partner, Scion Advisors.

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