Wine Talk

Snooth User: outthere

Seghesio Family sells their historic Winery to Napa based Crimson Wine Group

Posted by outthere, Jun 1, 2011.

Article was posted in Wine Spectator online yesterday. What a surprise. Happy to see Pete and Ted are staying on. Hope that doesn't end anytime soon as they are one of my favorite local producers for daily drinkers.

 

 

Replies

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Reply by dmcker, Jun 1, 2011.

Exit strategies, exit strategies. 

Having always wondered about that level of commitment when founders stay on....

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Reply by GregT, Jun 1, 2011.

Depends on the level of control I guess.  It's not like they started the business with an eye towards cashing out like a lot of the dot-com businesses.  They were real time farmers - very different outlook.  Still, someone comes in, says he'll give you x million dollars cash, you think about it.  Then you wonder what you'll do.  So if you still have the energy, you negotiate for a seat at the board and some executive control.  Pretty much doing what you always were doing but you have a lot more cash in the bank. 

But I don't know them so it's obviously speculation.

What I did find interesting tho, was their contention that life is likely to be harder for mid-size wineries like them in the future. I'd think it's quite the opposite.  That may come from their unique vantage in the wine industry, having been "mass producers" before wine got so popular.

But the small producer putting out a few bottles as little more than a one-man show, that's it's own category and I don't see many people getting rich that way.  The big producers putting stuff on all the grocery stores - they can't make a unique product because their distribution chain doesn't have a way to deal with non-standard stuff.  They can make money but whether it's wine or sneakers doesn't matter. 


The middle-tier guy, who can't appear in every supermarket, but who's distributed relatively well can develop a reputation and a following. Seems like that's the future of wine.  Enough people can try it to give it some cachet, but not enough that it's over familiar, and yet it's "real" wine. BTW, the company has a decent group of brands like that - Chamisal, Argyle, etc.

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Reply by dmcker, Jun 1, 2011.

I don't know any of the principals involved, but would guess having the Seghesio family stay on during a transition would be even more in Crimson's interest than in the family's (assuming they received a big enough no-strings upfront payment). 

Pine Ridge and Archery Summit were founded by Gary Andrus, who died at the end of last decade. Obviously Crimson picked them up together. I remember first encountering the PR wines during visits to Napa in the mid-to-late '80s. Pleasant surprise. Ditto the Archery Summit wines I encountered in the '90s. The culture at PR has changed a bit, and I don't often buy their wines any more. Haven't visited AR recently so can't comment, though I do buy their wines from time to time when I can find them. 

Will be interesting to see how Seghesio evolves into its new life. Hopefully not as in the Chinese curse. Perhaps it can be as much of a relatively-happy compromise as in the Ravenswood case.

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Reply by napagirl68, Jun 2, 2011.

RIP

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Reply by GregT, Jun 2, 2011.

D - do you know anything about Crimson?  I don't. Maybe they're not going to be all that bad.  They're not Diageo or Heublein or one of those.

Of course, maybe it's all just wishful thinking.  If Sonoma goes the way of Napa, the new frontiers will be Idaho, Colorado, Arizona, Michigan. 

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Reply by dmcker, Jun 2, 2011.

I'm thinking Idaho before Arizona. Ah yes, grapes among the sugarbeets. Do love the smell of those processing plants.  ;-(

Don't know anyone at Crimson, and it is a lot smaller than Diageo (not sure if they ruined Chalone or if Chalone was already far enough on the downslope that they just put the seal on it) or Heublein or Constellation (who bought Ravenswood and Mondavi and others). I do know Pine Ridge is not the winery it was a couple decades ago. The jury for me is still out on Archery Summit.

I'll repeat what I've said before. I don't know a single winery that's improved when a larger corporation has bought out the founders (other than bottom line for its investors, that is). Ridge is about the only one I know that's held the line in face of large new investors, and that was a while ago and the investors were foreign and extremely handsoff and the founder was still in control. However I'm not on the ground in NorCal right now, so would be happy to be educated by you, Greg, or OutThere, or someone else....

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Reply by dmcker, Jun 2, 2011.

It's very simple. The new investors almost always have very different priorities from the founders, regardless of whatever form of lipservice they give to keeping things the way they have been....


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