My husband, Bob, and I were recently in Napa, Calif., for a celebration to mark the 50th birthday and 10th wedding anniversary of a dear friend in the wine business. The weekend festivities were fantastic, as were the wines. Many vineyards in Napa and Sonoma are owned and operated by families, and most put the family name on the label. How have they managed to sustain their enterprises through multiple generations in this capital- and time-intensive industry?
Rick Walker, CEO and founder of Festival Napa Valley, says the wine industry has a special way of “keeping it in the family.” Some of his festival board members and partners are in the fifth and sixth generation. “The love of winemaking and the industry, combined with their passion for creating poetry in a bottle, is so apparent that the younger generations couldn’t imagine not being involved,” he says.
Family-run wineries enjoy credibility and a perceived commercial advantage in the industry. The family culture is deeply embedded in the “terroir.” According to Peter Mondavi Jr., third-generation co-proprietor of Charles Krug and C. Mondavi & Family, “For those of us who have remained a multigenerational wine family business, unwavering passion for both wine and extending the family legacy drives us. The food and wine lifestyle that comes along with it is one of our rewards!”
Some Napa families have sold their businesses to large corporations, like Beringer (Treasury Wine Estates) and Newton (LVMH), but the new owners are retaining the family feel and name. It is understandable that some families want the liquidity a sale provides, and there is an additional incentive to sell when no family member has been identified as the successor. “This is a highly fragmented business, with much segmentation requiring different skill sets,” Mondavi says. “Keeping the family focused on the right segment can be challenging.” And if there are too many grape crushers in the kitchen, the wine can spoil.
Keeping the business in the family while expanding its horizons takes on new meaning for vintners such as Jean-Charles Boisset, president of the family-owned Boisset Collection (owners of over 10 vineyards in California, including Raymond, DeLoach, JCB and Buena Vista). He and Gina Gallo, a third-generation leader of E. & J. Gallo Winery, united two dynasties when they married in 2009. They are raising their twin daughters with the same passion for the industry that they had as children.
Being family-run, much as making the wine itself, requires wineries to take a long-term outlook by riding out short-term challenges and planning for the future. Many of the wine families I spoke with agreed that sending the NextGen to work outside the family enterprise for a few years gives them valuable outside perspective and experience. They return to their family enterprises as well-trained future leaders.
Everyone knows that few family businesses make it to the third generation, but I was impressed that in the Napa Valley, the number of successful multigenerational winemaking families beats the national average by a ton of barrels!
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