It was, indeed, a night to remember.
Guests chatted as they passed through the famous arch of the Robert Mondavi Winery in Oakville, Napa Valley, just as they had for half a century, full of expectations and enjoying the warmth of late April. Green aromas wafted from the iconic To Kalon Vineyard that enfolds the winery, a reminder that vintage 2016 was now well underway.
Inside the Vineyard Room where she and Robert had hosted so many festive events, Margrit Biever Mondavi held court, still feisty at 91, correcting the memories of friends and former employees who stepped forward to pay tribute to the memory of Robert, gone eight years now.
Where other people dreamed, Mondavi acted – a trait that would help him propel his eponymous winery to international fame. Yet it was this same restlessness that lured him into divisive and long-lasting family disputes, and, more damaging, a hubristic over-reach which eventually saw him, in 2004, lose the winery that proudly bore his name.
The beginnings
From the beginning, Robert Mondavi and his winery seemed to feed on drama, marked by headline-catching conquests and controversy. Robert’s immigrant parents, Cesare and Rosa Mondavi, left Minnesota, where they landed, and became grape growers in Lodi in California’s Central Valley. In 1943, the then 30-year-old Robert convinced them to buy the well-respected Charles Krug Winery in Napa Valley. For the next two decades, Robert and younger brother Peter worked together at Charles Krug, but their different personalities – Peter the conservative winemaker, Robert the ambitious manager and PR man – constantly caused friction.
Peter complained about Robert’s travel expenses as he marketed the wines, and specifically the purchase of a fur coat for his wife Marjorie for a planned dinner at the Kennedy White House that never took place. The fist fight that ensued got Robert kicked out of both the house and the family business by his mother, Rosa. In 1965, with his sons Michael and Tim and daughter Marcia, the spirited Robert decided to build his own dream winery at the age of 53.
Thanks to the investment of a couple of Napa valley vineyard owners called Ivan Schoch and Fred Holmes, he built the still-sleepy valley’s first new winery since 1934 – one that was unique in its openness and modern design. Owners of the established wineries farther up valley admired Robert’s creation whenever they drove along the St Helena Highway to or from San Francisco.
Mondavi’s innovative philosophy extended beyond architecture, however. He pioneered the use in Napa of stainless steel and temperature control for fermentation, drove the trend to wine labeling based on European varietals – rather than Claret and Burgundy – and championed maturing in new French oak. In the 1960s, California Sauvignon Blanc was cheap, simple and sweet. Mondavi fermented his example of this grape until it was dry, aged it in oak barrels, and christened it Fumé Blanc in a nod towards France’s Pouilly-Fumé.
By 1968, despite the favourable reaction from critics, it was clear that sales revenue would not cover Mondavi’s spending, and Schoch and Holmes sold their majority stake in the winery to a Seattle brewery called Rainier which had just pocketed $2.8m from the sale of the Seattle Rainiers baseball team. It was thanks to Rainier that Mondavi was able to buy the To Kalon Vineyard surrounding the winery, and arguably it was the brewer’s expertise that laid the early foundations of a young business that was doing well enough by 1978 for him to buy them out.
Acquisitions and alliances
Within the Napa Valley, Mondavi became known for the generous help and encouragement he gave to his neighbours, but he also offered fuel for gossip. He was notoriously rough on Michael and Tim whenever they failed his exacting standards. Then there was his affair with Margrit Biever, who was first hired to conduct winery tours, and whom he married in 1980 when he was 68 and she was 55.
Local eyebrows were raised for other reasons in 1979 when the company ventured outside Napa and premium wine by establishing a less-expensive Robert Mondavi Woodbridge line. In the 1980s, a Coastal line of wines was also added, and Vichon and Byron wineries were acquired.
But Mondavi’s name became known to a wider public and featured on the evening news when he began forging international alliances. In 1978, he astonished longer-established California wineries when he persuaded Baron Philippe de Rothschild to bring the prestige of his Château Mouton Rothschild into a Napa joint venture to be called Opus One. The brand was chosen after it was pointed out that the previously preferred option, Gemini, was the name of a successful San Francisco magazine for the gay market.
Investments like these, and the growing number of non-profits and charitable organisations in which he and Margrit had become involved, cost money. So, in 1993, with bank debt of $65m, Robert Mondavi became the third wine producer in the US – after Canandaigua and Chalone – to offer its stock to the public. The initial Nasdaq offering was less than a success. Of 3.7 million shares that were offered at $13.50, only 2.5 million sold, and their value at the end of trading fell to $13.125. Over the following nine weeks the shares had dropped to $6.50.
Astonishingly, Robert Mondavi spent some of that period on a long-planned fishing holiday with Margrit. It was Michael and Tim who remained at the business, struggling to calm the investors. When their father returned, he was decisive, asking his long-standing managing director, Cliff Adams, to stand aside to allow Michael to become CEO and Tim head winemaker. The change in management reassured Wall Street and shares rose to $40.00 the following year and $50.00 in 1997.
Despite the flotation, the structure of the shareholding gave the family 85% voting control over the way the company was run. This included a wave of initiatives, such as the charitable promise of $35m to help finance an American wine; a gastronomy and arts centre that would bear Robert Mondavi’s name; the creation of the luxury Luce Brunello di Montalcino brand with the Frescobaldi family, who had been making wine in Tuscany for 700 years; and a minority interest in Lodovico Antinori’s Super-Tuscan, Ornellaia, in 1999.
By 2004, the company had made what the Wall Street Journal described as “a quarter of a billion dollars or so of virtually unproductive capital investments”. Mondavi Winery’s share value had fallen back to $20.00, and joint ventures with the Chadwick family in Chile and Disney had to be dropped.
The company’s outside directors rebelled at the buying spree. They forced the firing of CEO Michael Mondavi in January of that year and threatened to resign en masse if the Mondavi family did not give up its special voting rights and hence control of the company. There was also friction within the family. Tim, like his uncle Peter, was a committed winemaker, while the Harley Davidson-riding Michael was more of a go-getting businessman. Tim and Marcia had opposed the flotation in 1993, and 11 years later they disagreed with Michael, who was ready to cash out. Tim and Marcia still hoped to retain a part of the company, and there had been discussions about splitting it up. At 91, their father was a shell of his former self, shaken by Alzheimer’s disease and risking financial ruin from over-extending his generosity.
The task of holding the family together fell to Margrit.
Corporate rescue
The company that stepped in hardly seemed to fit the profile of an ideal white knight. Constellation Brands was founded in 1945 in upstate New York by Marvin Sands, himself quite an entrepreneur, as Canandaigua Industries. Like many beverage companies, it grew steadily through a series of buying and selling brands. Some of those brands – generally sweet or fortified wines such as Richard’s Wild Irish Rose, Widmer and Manischewitz – were household words among college students.
Marvin’s sons, Robert and Richard Sands, now headed the publicly traded Constellation, and both had been paying attention to the Mondavis for years, even as their firm was busy gobbling up other wine properties worldwide.
“We had been watching the company and saw that in the third quarter of 2002, Robert Mondavi Corporation posted a loss of $1.6m, with a drop in revenues of 12%,” CEO Robert Sands, now 58, recalls. When the situation didn’t improve by the following summer, Chairman Richard Sands, now 65, put in a call to Michael, the CEO, but nothing transpired. However, after Michael was sacked, the Sands brothers decided it was time to make a move, putting into play an unsolicited bid to buy the total company, not just part of it.
After brief negotiations, on 3 November 2004, Constellation became the new owner of the Robert Mondavi Corp. at a purchase price of slightly over a billion dollars. Feeling the sting of failure, the Mondavi family nevertheless walked away with enough cash to salve their pride and be able to start new businesses or make good their debts – Robert a reported $70m, Marcia $107m, Michael $100m and Tim $59m.
Soon after the ink had dried, the Sands travelled to Napa Valley to visit the elderly Mondavi. “We spoke to Robert from our heart and told him how much we admired all that he and Margrit had created,” Robert Sands says, and he promised Constellation would “do everything humanly possible to protect his name, his company and his enormous legacy.”
The same message was conveyed to employees, some of whom had wept at the news of the sale. Still, everyone was waiting for the inevitable changes, understanding such happy talk is often typical of corporate assurances that nothing will change, only to be followed by an influx of ‘helpers’ from Constellation’s eastern headquarters.
It never happened, and the Sands stayed true to the promises made to Mondavi.
“Robert and Richard both made it clear from day one that our goal was just to continuously get better and better,” says Glenn Workman, now vice president and general manager of Napa Operations. A Mondavi ‘lifer’, Workman laughs that he has had only one job interview in his life, for a position of temporary harvest worker at Mondavi during the vintage of 1975. He never left. Like many people at the winery in the months following the acquisition, both core team and staff, Workman decided to continue doing his job until he was told not to or until another winery dangled a better offer.
Winemaker Geneviève Janssens was quickly asked to stay on after the purchase, seen by Constellation as a key to the brand’s future success by making even better wines as well as a signal to other employees, trade and loyal consumers, that everything was stable at Mondavi. Janssens first worked at Mondavi in the late 1970s, left to get some seasoning, then returned in 1989 to take part in the Mondavi joint venture, Opus One, just across Highway 29. In 1997, she became director of winemaking for Robert Mondavi, reporting to Tim Mondavi.
A new wine cellar just for grapes from the To Kalon Vineyard, a 450-acre spread of which the winery owns about 90 acres, had come on line in 2000 when times were still good. Sixteen years later, it is still striking in concept, scope and architecture. Filled with glittering tanks and solid barrels, steel and oak never looked better together.
But everyone agrees that investment and maintenance money were in short supply in Mondavi’s last few years as a publicly traded corporation. “Our first objective was to get the vines back up,” says Greg Fowler, Constellation’s SVP for Operations for Wine & Spirits and a native of Napa Valley. Most major California wineries have established vineyard renewal programs as vines get older and less productive, often replanting 5% every year. “We had fallen behind at To Kalon,” Fowler says, “but today we’re ahead of schedule.” There were also new laboratory facilities.
The wines
Today the Robert Mondavi Napa Valley brand (Constellation operates both Woodbridge and Robert Mondavi Private Selection within a separate unit) produces around 200,000 cases annually, grouped into three tiers in addition to a ‘sold-only-at-the-winery’ category that allows the winemakers to have some freedom, fun and experimentation.
The top line – the varietal reserves – include Cabernet Sauvignon and Fumé Blanc grown at To Kalon, and Chardonnay and Pinot Noir from the cooler Carneros district, where the Napa River eases into the tidal San Pablo Bay. Prices range from $50.00 for the Fumé to $155.00 for the Cabernet. A step down are the Oakville District varietal wines (generally $40.00 to $100.00), followed by the general Napa Valley varietal wines ($20.00 to $60.00 for Momentum red, the winery’s only non-varietal marketed blend other than a $50.00 Maestro commemorative).
Fowler laughs at the idea that Constellation might be tempted to overproduce wines sold under the Robert Mondavi label. “Just the opposite,” he says. “We want to do everything we can to improve quality to get the prices up even higher.”
Today, Constellation is a world leader in premium wine, the number one beer importer into the US, and the number three beer company in the US, in addition to having recent strong growth in its spirits business. Annual sales are about $5.5 bn.
Although the Robert Mondavi Winery has been given a great deal of support and freedom in its 12 years with Constellation, it of necessity fits within a corporate pecking order and has responsibilities outside the brand. As VP and general manager of Napa Operations, Workman reports to Chris Millard, the chief winemaker at Constellation. In turn, Workman oversees production at its Franciscan and Mount Veeder wineries, although each has a dedicated oenologist.
As a part of Constellation’s luxury ensemble, Fowler says, Robert Mondavi, Franciscan and Mount Veeder have more leeway in their winemaking practices, while the company’s lesser brands are more formula-based. “At Robert Mondavi, we will never hurt quality by cutting costs,” he says. “But we do have a rolling 10-year forecast to give us guidance. After all, we are a for-profit company.”
With Michael, Tim and Marcia now running their own wine businesses, Margrit Biever had become the last family link at Robert Mondavi Winery to what was then and what is now. Four months after her vibrant performance at the 50th anniversary celebration, she died. She was 91.
