Michael Mondavi on Challenges vs. Opportunities

Apr 27, 2015

(Wines&Vines) - The North Bay Business Journal’s 15th annual Wine Industry Conference on April 24 attracted 470 attendees to the Hyatt hotel in Santa Rosa to hear about wine sales trends from experts.

The keynote speaker was Michael Mondavi, son of industry legend Robert Mondavi and co-founder of the Robert Mondavi Winery in 1966.

Mondavi chose to speak of the challenges that turned into opportunities for the industry and his family: Prohibition, for example, opened the door to grape sales to heads of families, leading the Mondavis to move from Minnesota to California, ready to get into the wine business when Prohibition ended in 1933.

Then government price controls during World War II led wineries to shift from wine shipped in bulk to local bottlers as a commodity to unregulated bottled wine. If wine were still bottled regionally like sodas, today’s wine business would be far different.

Robert Mondavi, his brother Peter Mondavi and parents Cesare and Rosa Mondavi bought Charles Krug Winery in 1943, and began bottling branded Napa Valley Cabernet Sauvignon at higher prices, as well as selling it in bulk, then in jugs as CK Mondavi. Of course, 100-year-old Peter Mondavi Sr. and his sons Marc and Peter Jr. still own and run the 150-year-old Krug winery.

Likewise, a glut of wine in 1974 led Mondavi to bottle its excess in 1.5-liter Burgundy bottles, not the jugs common for such wines. This led to Woodbridge, a successful second label.

“That changed the way wine was made and sold in America,” Michael Mondavi said, adding, “Some of the laws today are challenging, but they may create opportunities.”

The family winery was sold in 2004, but Mondavi bought a vineyard in the Atlas Peak AVA in 1999 and started Michael Mondavi Family Estate. The family created Folio wine partners to import wine from respected families overseas. They also make wine in Napa Valley.

The recession of 2008-09 hit the business, but he responded by hiring new sales representatives, minimizing lost sales and readying the company when the market returned in 2010. The company sold its winery and tasting room facility in the Carneros district of Napa last year to Kieu Hoang Winery and are planning a smaller dedicated facility.

Mondavi concluded his talk by pleading with local residents and governments that are calling for more regulation of wineries to consider the changing wine market. “We have to build relationships with customers to succeed in today’s market,” and visiting wineries is an important part of that process.


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