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Exclusive: Seghesio Family Sells Historic Winery

Wine Spectator has learned Crimson Wine Group will buy historic Sonoma producer

Tim Fish
Posted: May 31, 2011

Seghesio Vineyards, an historic Sonoma winery that transformed itself from a jug-wine factory into one of California’s elite Zinfandel specialists, is being sold by the Seghesio family to the Napa-based Crimson Wine Group, part of the financial conglomerate Leucadia National, sources close to the sale tell Wine Spectator. The sale price was not disclosed, but the purchase includes the Healdsburg winery, 300 acres of vineyards, the Seghesio brand and current wine inventory. Most of the family members involved with the winery will stay on board.

“It’s an incredible offer but it was still a difficult decision, a bittersweet decision,” said CEO Pete Seghesio. “Every Italian family gets into fights and we don’t want to be one of those families. The family is united on this. It has been an incredible ride but we want to go out on top.”

Seghesio is best known for five Zinfandels: Sonoma County Old Vine; its three single-vineyard wines Home Ranch, San Lorenzo and Cortina; and its regular Sonoma County bottling. The 2007 Sonoma County Zinfandel was number 10 in Wine Spectator's Top 100 Wines of 2008. Seghesio produces about 100,000 cases annually and also makes Pinot Noir, Petite Sirah and Italian varietals such as Sangiovese, Barbera and Pinot Grigio. Of the 92 wines Wine Spectator has reviewed in the past 15 vintages, 30 were rated 90 points or above.

“We kicked the tires on some very high quality niche wine producers,” said Earl Martin, Crimson CEO. “And the fit with Seghesio was perfectly seamless. What they have been able to do qualitatively and on their scale is almost without peer.” Crimson also owns Pine Ridge Vineyards in Napa’s Stags Leap District, Chamisal Vineyards in Edna Valley and Archery Summit in Oregon’s Willamette Valley.

The sale is part of a growing trend in Northern California, as longtime winemaking families increasingly opt to sell the business in the face of global competition, increased consolidation of distribution channels and the strain of succession issues and inheritance taxes. Those are among the concerns that led to the sales of the Sebastiani family's winery in 2008, Stag’s Leap Wine Cellars and Duckhorn in 2007 and Robert Mondavi's winery in 2004.

The Seghesios weathered Prohibition, the Great Depression, drought, floods and even a 1996 blaze that scorched the winery, but Pete said the challenges ahead are daunting. “We’re looking at this as a decision not for today but one for the next 20 to 30 years,” he said. “I think it will be more and more difficult for mid-sized brands like us in the future.” Seghesio will remain in his current role, along with winemaker and cousin Ted Seghesio. Pete retains ownership of San Lorenzo Vineyard, while Ed and Ray Seghesio keep Cortina Vineyard.

The Seghesios are second only to the Foppianos as the oldest winemaking family in Sonoma County. Four generations of Seghesios have been growing grapes and making wine from the Alexander and Dry Creek valleys in northern Sonoma County. Edoardo Seghesio immigrated to Sonoma County from his native Piedmont, Italy, in 1886 and became a winemaker at the old Italian Swiss Colony. Edoardo and his wife, Angela, planted their first vineyard, Home Ranch, in Northern Alexander Valley in 1895 and made their first wines in 1902.

By the mid-1970s, the winery was processing more than one fourth of the grapes grown in Sonoma County, but it wasn’t until 1983 that the family bottled its first wine under the Seghesio label. The quality was only marginally better than the day’s jug wines. The second generation was trapped in the past: maximum output in the vineyards, with wine fermented in concrete vats and aged in massive redwood tanks. “When the kids took over in 1995, this place wasn’t worth much,” Pete said. When the IRS delivered a $4 million bill for back taxes, the turning point arrived.

Ted and Pete believed the family’s future lay in its hundreds of acres of old Zinfandel vineyards and taking the winery upscale. The winery enjoyed good times for a decade, but now the family will step back.

Despite the new corporate ownership, Crimson CEO Martin said his company has no plans to change Seghesio or expand production. “Will there be a California appellation Zinfandel in the future? No!"

Michael Henderson
Martinez, CA —  May 31, 2011 11:37pm ET
One more independent gone! Before long it will be impossible to buy a family owned wine. No matter what they say the wine will not be the same in a couple of years. The bean counters always win.

Maybe it's time to start buying micro brews from small producers. They seem to be increasing in numbers.
Terrance Rooney
San Francisco, CA —  June 1, 2011 12:35am ET
Ridge, Ravenswood, Rosenblum, and now Seghesio. Most of the best producers are gone to the corporate world. So it goes.
Mercer Island, WA. —  June 1, 2011 1:31am ET
Ridge sold in 1985 to one Japanese individual, not a Corporation. I'm told he comes in once a year, tastes the wines and basically says keep up the good work. I think the product speaks for itself.
Terrance Rooney
San Francisco, CA —  June 1, 2011 2:14am ET
Published: January 07, 1987

RIDGE Vineyards, for more than 20 years one of California's outstanding wineries, has been sold to a Japanese pharmaceutical company. Terms of the transaction were not disclosed, but the wine maker and managing partner, Paul Draper, said nothing about the winery would change but its ownership.

The new owner is Otsuka U.S., a subsidiary of the Otsuka Pharmaceutical Company, a producer of nutritional drinks and other pharmaceutical products. Otsuka operates an experimental wine-making center near Fuji, in Japan.
Terrance Rooney
San Francisco, CA —  June 1, 2011 2:24am ET
Otsuka Pharma still owns Ridge, according to 2010 Jancis Robinson article.
Thomas Cannon
Fairfax, VA, USA —  June 1, 2011 8:56am ET
Very sad to hear this news. Better stock up on the 2009's and 2010's because quality will certainly go down the way Duckhorn and Rosemblum did.
Jon Bjork
Lodi, CA USA —  June 1, 2011 10:46am ET
I agree this is a shocker, but up from the ashes can come even better family-owned wineries. Once they fulfill their non-compete sales contractual obligations, they are free to take all they've learned (and all that money) and build something potentially better than they started with. (And they'll probably make fewer mistakes the second time.) Just too bad they can't take their name with them. That's why I'm reserving my family name for the last venture I'll start before I pass on...
Eric Olson
Salem, Ma —  June 1, 2011 11:35am ET
Most likely the center of my California wine experiences. Many good times, many good people and many good memories at the Seghesio winery. California wine country the way it should be. We will all miss the independent owners and wineries around the world and this is just one more unfortunate end. Good luck all. It was a classy run.
Bill Belkin
Minneapolis, MN —  June 1, 2011 11:49am ET
I am both amused and saddened that the early "band wagon bloggers" and alleged wine people, can push the Crimson Wine Group led Seghesio into a category with Diageo and Constellation. Am I missing something here? Have they not tasted the lasted vintages of Archery Summit? Is the Pine Ridge Cabernet from 2007 not up to your standards? And although she had moved on now, Stacy Clark (ex-Pine Ridge) was one of the longest tenured winemakers in the business. Must have been doing something right all these years of "corporate ownership..." Be careful before espousing these narrow views. Great wines comes from great vineyards and great winemakers and I can't see any reason, especially with this trophy, why CWG would not want to perpetuate that. They see the mistakes that have been made and will not repeat them. They are too smart and too well run to think the public will sit for doubling case productions from these classic vines... My opinion...
Gregory Thomas Day
Los Angeles, CA, USA —  June 1, 2011 12:31pm ET
I have known the Seghesio's for nearly 15 years, and consider Pete & Cathy dear friends. While it is easy to condem the sale of arguably one of the great family winery's in the U.S., let us all remember that this family has done a great deal for California winemaking and, specifically Zinfandel. Although I too am sad, wineries are a business, and businesses get sold. Knowing this family as I do, they will be heavily involved in the oversight for many years to come. Congratulations and thank you to the Seghesio's from
Gregory & Angela.
Terrance Rooney
San Francisco, CA —  June 1, 2011 12:43pm ET
Well, I hope it works and if the Seghesio family stays involved perhaps it will. Otsuka has not changed Ridge much, if at all. Ravenswood seems somewhat on track although WS did not like recent wines much.

Joel Peterson's son is doing very well at Bedrock, and Kent Rosenblum's daughter is doing okay at Rock Wall. So perhaps we will be able to find good Seghesio wines in five years.
Thad Cox
Knoxville, TN. —  June 1, 2011 12:46pm ET
The Seghesios are great people and if they are happy, then I am too.They make some of the greatest Zins in the world and I have visited their winery and vineyard sites. I am in a little bit of shock but if they are staying on board then hopefully we won't see much change.
Pete Seghesio
Healdsburg —  June 1, 2011 2:03pm ET
All - thank you all for the kind comments. This is a happy day for my family....it's an American Dream. This is the right thing for our family and at the right time. We passionately built a great company and are honored that our partners share that passion. I am looking out from my office over a lot of still great Seghesio wine aging in both bottle and barrels. I'm on board for some time along with my cousin, so the grapes and the winemaking team are staying the same. We are already planning on additional investment for quality improvements that I have wanted for years.

Watch out for Seghesio's second act!
Brian Burkhard
Cleveland, OH —  June 1, 2011 2:04pm ET
Business is business and they're certainly entitled to execute a business transaction, albeit a surprise to those of us that follow, have visited and purchase from Seghesio regularly.

...but there is "romance" in their zin that comes from that "family feel" in every bottle...hope they don't lose it!! Keep the romance!!
Pete Seghesio
Healdsburg —  June 1, 2011 2:46pm ET
Thad, Thank you for your kind words! Right back at ya!

Yes Brian - we will keep that family feel and all the romance you love in tact. My family, including my sons Joey & Will will be at most events just like in the past. Sausage day, summer BBQ (with Chris Lilly this year), pizza making, ravioli making, same traditions as before... thank you for supporting us. We strive to keep you happy!
Brian Burkhard
Cleveland, OH —  June 1, 2011 3:16pm ET
Great to hear Pete...thanks!

During our last visit, Rachel Ann (rest in peace) told stories in our private tasting...as I'm sure she did for hundreds if not thousands over the years. Nonetheless, she (and everyone else we met including Ted's daughter in the tasting room) made my wife and I feel as if we were the only people visiting the winery that day! We haven't opened a bottle since (and there have been plenty!!) without talking about that visit. We "own" that memory regardless of who owns the winery...

...and we'll be back this November for more!! See ya then!
Cathy Seghesio
Healdsburg —  June 1, 2011 3:37pm ET
To Eric and Gregory,
Love this industry because it gives us friends and role models like you! Salute!

Jon and Bill, thanks for not counting us out! We're not and we intend on allowing you to say, "I told you..."
Lisa Mattson
for John Jordan, Healdsburg, CA  —  June 1, 2011 3:38pm ET
Everyone at Jordan is saddened by today's news. It's unfortunate that Jordan is a member of an ever-shrinking club of mid-sized, family wineries. All of us in the wine business have had nothing but respect for what the Seghesio family has achieved. While I admire the Seghesios and know that they made the best decision for them, I'm of the opinion that independent wineries can effectively compete in the wine business as it exists in the 21st century.
John Jordan
Jordan Vineyard & Winery
Terrance Rooney
San Francisco, CA —  June 1, 2011 4:26pm ET
It helps you to compete if you start with millions of dollars, as in the case of Jordan who made its money elsewhere.

Joel Peterson, Kent Rosenblum, and the Seghesio family got where they are by boot-strapping from the ground up. It's not quite the same.
Tad Eickman
Wilber, NE —  June 1, 2011 5:31pm ET
My wife and I have long loved the great Seghesio zins. We always look forward to our club shipments. Will the "table tastings" still go on? We had a great time at one of those with friends we introduced to the Winery last fall. It was a great time for us.
Here's hoping the great quality of the Seghesio family name will continue.
Gerry Ansel
Fullerton, Calif —  June 1, 2011 6:19pm ET
Building up a winery's brand then selling it is the name of the game, I'm afraid. Wine is a low-margin business. The payoff doesn't come until you sell off. We can only hope Crimson respects this producer's values and will continue to make wine in the traditions laid down by the original owners.
Thomas Matthews
New York City —  June 1, 2011 6:22pm ET
Bill Belkin made an important point. Let's taste the new vintages before we pass judgment. And let's hope the Sehesios stay deeply involved in Sonoma wine.
Rick Evans
Oswego, IL —  June 1, 2011 7:14pm ET
As a long time fan and wine club member of both Seghesio and Pine Ridge, I agree with the earlier comment that an acquisition does not necessarily sound the death knell of quality.

Maybe...just maybe a loyal following of the brand might actually mean something.

I sincerely hope so!
Keller Ford
Cape Girardeau, MO —  June 1, 2011 7:22pm ET
San Lorenzo and Cortina are in my opinion two of the best Zinfandel bottlings in California. Great sites, great wines!
David W Darche
Boston, Mass. —  June 1, 2011 7:37pm ET
We will be visiting the winery this Friday for the first time, and are really looking forward to the experience.

Great wines will always speak for themselves, and I remain optimistic that the Seghesio brand will continue to produce wine worthy of their fine name!
Gerald Schroeder
Orange, CA. USA —  June 1, 2011 7:54pm ET
I discovered Seghesio as I'd drive by the winery on my way downtown each time I came to Healdsburg to wine taste and stay at a motel near the 101. I finally stopped in after several years and was blown away by the quality of the wines and the incredible atmosphere in the tasting room. Later, I brought my family and friends with me, who all are big fans, and now our tradition is, as we see the winery, we raise our hands in the air and all shout "SEGHESIO". We also shout it out as we sit around our table drinking one of your zins at festive occasions. Thanks for past pleasures, and here's to the future and continued success.
Bob Wyckoff
Denver, Colorado  —  June 1, 2011 10:10pm ET
Wow, I'm stunned. Im actually drinking an 08 Sonoma County zin while reading this. Such sad news. My wife and I love the Seghesio's and are planning an August trip to visit. I'll keep my fingers crossed that they stay at the helm. Like a punch in the gut, but I wish them the best!
William B Lowblad
Banks, Oregon  —  June 1, 2011 11:31pm ET
My wife and I joined both the Pine Ridge and Seghesio wine clubs over 15 years ago. We're still highly pleased with the Crimson owned Pine Ridge shipments and am sure that as long as they're around Pete and Ted will never let a bad bottle out of the best Zin house around. Congrats.
Sonoma, CA —  June 2, 2011 12:23pm ET
Founded in 1858, Gundlach Bundschu is in fact the oldest family-owned winery in Sonoma (and California). As such, we are of course sad to see another of California's pioneering wine families sell, as we believe the distinctive wines and voices of independent wineries, and particularly farming families, are vital to the health and soul of our industry. But we have tremendous respect for the Seghesio family, their excellent wines, and their decision to do what they feel is best for their family and business. We wish them the very best.

Susan Sueiro, Marketing Director
Gundlach Bundschu Winery
Amber Mihna
appleton wi —  June 3, 2011 1:01am ET
i have been selling seghesio for 10 years and used to buy seghesio for a country club I worked for the 3 years before that. I will tell you this wine is the wine that changed my life. I can remember the way that first taste was like velvet. It lingered when I swallowed and I remember thinking - I could drink this the rest of my life. And I have been. I hold more memories from the sonoma zin than any other bottle. Almost all good, and when I hit the 4 glass mark in a night, sometimes not the best :)
I have been to the winery dozens of times. I have met you, the family. I meet people all the time and feel connected because of this one love we all hold together - Seghesio Zinfandel. I have fell in and out and back in love, and there is seghesio zinfandel in the background, watching. I drink it with friends and do ridiculous things and laugh for hours. i open a half bottle when Im alone and it helps me forget about a bad day. I put it in wine dinners and tastings I speak at so I can drink it. I love all of the wines from Arneis to Barbera and sangioves to venom, all the zins and omaggio...I have a special 750 of port that Edd gave me from soo many years ago. Im gushy and just want you to realize one thing Seghesio family, you have made a mark in my life that will never go away- those memories will be cherished forever.
my website talks about my first love of wine - seghesio - the website is in its first stages but check it out - www.vinodivasworld.com
John Kozubal
Healdsburg, CA —  June 3, 2011 5:11am ET
Living in Healdsburg and working in the wine industry I have had the pleasure of getting to know both companies and some of the great people who work for them. I think it is a great match. Congratulations to both the Seghesio Family and Crimson. I look forward to drinking many more bottles of amazing Seghesio wines for years to come!
Jason Carey
willow, ny usa —  June 5, 2011 11:15pm ET
I love all the Seghesio wines, especially the Cortina.
I wish them well.. .but its perfectly clear they would have done fine as a mid sized independent.. there was just probably too much lure in the money.. I hope they stay excellent.

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