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The Business of Wine

Three books highlight the reality behind the romance

Daniel Sogg
Posted: July 20, 2004

  Wine Books
Three books highlight the reality of the wine business

Vintners and wine drinkers often focus on the romantic side of wine: the expression of terroir, the craft and creativity, the mysterious alchemy of aging. But these idealized notions don't secure success in a competitive industry. Wine is a business, and it is only when passion and romance are harnessed to the hardheaded fields of finance and marketing that wineries survive and grow.

Three recently published books describe how three California wineries responded to the complex challenge of building a viable business. All were founded by individuals with a vision, and all have transformed themselves in order to survive. Chalone started in Monterey as an artisanal producer of Pinot Noir and Chardonnay and is now a publicly traded company encompassing diverse wineries. Sutter Home, once a struggling jug-wine producer in Napa, stormed to success through mass-market appeal and innovation. Fetzer, a family winery in Mendocino devoted to sustainable farming, was sold to a large spirits company that embraced its vision.

The Chalone Wine Group is a Napa-based company that owns or has an interest in 12 wineries in California, Washington and Bordeaux. But its beginnings were anything but corporate. In the summer of 1964, Richard Graff, a Harvard music major fresh from a stint in the Navy, drove his 1951 Chevrolet up to a rugged property in the Gavilan Mountains and fell in love with the isolated site.

Chalone: A Journey on the Wine Frontier relates the transformation from hardscrabble operation to public company. Graff, who died in a 1998 plane crash, brought the perspective of an impassioned wine lover. For better and for worse that never changed, and Chalone struggled for solvency for much of its first 20 years. With the arrival in 1972 of Deloitte & Touche executive W. Philip Woodward, who coauthored the book with Gregory S. Walters, the business started toward fiscal viability.

The defining moment came in 1984, when investment banker William Hambrecht, cofounder of Hambrecht & Quist, convinced the Chalone board to take the company public. It was the first premium winery in the world to do so, and the decision took it far beyond the initial focus on Pinot Noir and Chardonnay.

Woodward came to recognize that going public was an efficient method to meet the winery's need for ready cash. There was a price, however-the obligations that come with being a public company strained his relationship with Graff.

Personality profoundly influenced the character of Chalone, and the same is true of Sutter Home. Harvesting the Dream: The Rags-to-Riches Tale of the Sutter Home Winery, by Kate Heyhoe and Stanley Hock, recounts the story of the Trinchero family, who moved from New York in 1948 to the then-backwater of St. Helena.

Mario Trinchero was a hotel bartender in Manhattan, but he wanted to be self-employed. He had bootlegged wine during Prohibition and was willing to take a chance with his brother and buy a rundown winery in Napa Valley. The transition was painful for Mario's wife, Mary, and their three children, Bob, Vera and Roger. The family scraped by making generic jug-wines. In the 1950s they produced 52 different labels, but the joke among locals was that the Trincheros only made one red and one white.

By 1968, elder son Bob oversaw production. Disheartened by the high cost of Napa grapes, he bought cheaper Amador County Zinfandel. In 1972, he drew off juice from the Zinfandel skins, hoping to increase the wine's richness. The technique (called a saignée in French, or bleed) worked, and Bob fermented and bottled the remaining "white" juice separately.

Then serendipity struck. In 1975, the white bleed juice wouldn't finish fermentation and contained 2 percent residual sugar at bottling. People loved it, and it quickly sold out. Seizing the opportunity, the Trincheros increased white Zinfandel production from 25,000 cases in 1981 to 1.3 million in 1986. The company, now called Trinchero Family Estates, currently produces about 10 million cases a year, and Sutter Home White Zinfandel makes up 45 percent of sales.

Mario and Mary died in 1981 and 1999, respectively, so the book primarily relates the perspectives of their children and the winery's current employees. The children, who take pride in a tradition of innovative marketing, have expanded into higher-end Napa bottlings under the Trinchero label. But it's clear the family that rode to success on white Zinfandel feels out of step with the upscale tone of modern-day Napa.

Like Richard Graff, lumberman Barney Fetzer started his winery after falling in love with a piece of land. And like Sutter Home, Fetzer is a large operation-making 4 million cases per year-that focuses on inexpensive wines.

But Fetzer also has another focus: sustainable farming. Its 2,000 acres of estate vineyards are farmed organically, with its growers' 9,000 acres slated to shift to organic techniques by 2010. True to Our Roots: Fermenting a Business Revolution is less a history of the company than a call to arms by longtime Fetzer executive Paul Dolan, encouraging sustainable practices in all businesses.

As Fetzer's winemaker, Dolan started experimenting with organic farming in 1986. The next year, while sampling Sauvignon Blanc in one vineyard, he discovered that grapes from an organically farmed block tasted more flavorful than grapes from a nearby block that had been treated with chemicals.

Creating a sustainable business became a personal and professional mission for Dolan, who was appointed winery president in 1992 after the Fetzer family sold to the Brown-Forman Corp. Citing Fetzer's tremendous growth throughout the '90s, Dolan makes a case that sustainability can be a competitive advantage. A company integrated with the local and global communities inspires employees, he explains, and that boosts productivity.

Published last year, True to Our Roots now has an unspoken backdrop; in February, Brown-Forman laid off 47 people and made management changes at its California wineries. Dolan, who had previously been reassigned to a new job, left in April to attend to new projects: Sauvignon Republic will focus on food-friendly Sauvignon Blancs from organically and biodynamically farmed grapes; he is also buying Mendocino's Parducci Wine Cellars with partners.

That illustrates perhaps the most trenchant theme uniting these three books-that the wine industry is unpredictable and producers must adapt. Rarely do they hold fast to the route initially envisioned.

Chalone: A Journey on the Wine Frontier, by Gregory S. Walter and W. Philip Woodward (Carneros Press, $20, 222 pages, paperback)

Harvesting the Dream; The Rags-to-Riches Tale of the Sutter Home Winery, by Kate Heyhoe and Stanley Hock (John Wiley & Sons, $24.95, 235 pages)

True to Our Roots: Fermenting a Business Revolution, by Paul Dolan with Thom Elkjer (Bloomberg Press, $27.95, 240 pages)

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