It’s been the talk to the industry for the past several days, the famous Seghesio Family Winery selling to semi-corporate Crimson Wine Group. Seghesio has been growing and selling grapes as well as making wine for over a century in Sonoma County, California. They are the second oldest winery in Sonoma County, after Foppiano Vineyards, where I started working three months ago. Their successful turnaround has been likened to what Foppiano is trying to do now.
So this kind of hits close to home.
Seghesio made news about ten years ago when the younger generation successfully shed the jug wine image and entered the high end Zinfandel elite. They began producing countless high-scoring, popular wines, so I suppose that’s when the money people started paying attention.
Since I work for a family-owned winery, I can see both sides of this story. It’s really, really tough to remain a family-owned winery these days. Consumers want cheap wine and small wineries don’t have the equipment or the economies of scale to create $10 and under wines. Competition is frickin’ harsh and the players grow almost daily. After the Seghesio story on the Wine Spectator website, plenty of commenters bemoaned the “demise” of Seghesio and the family, but these guys are entering a new phase of life, and now sitting pretty with a boatload of cash. Sure, the Seghesio brand may not ever be the same (although Crimson also owns Pine Ridge and Chamisal and their wine still rocks, so who knows?), but Ted and Pete Seghesio will remain with the winery and maybe pull in a better salary under the new ownership. They’ll be free from the day-to-day drudgery that comes with the stressful, small-profit, fine wine business. It’s not easy work, folks.
But, as a writer, it is painful to watch another family-owned winery sell out due to financial pressure (from the IRS specifically). I’ve written about the money and “exit strategy” difficulties of the little guys countless times over the years (like here, when Rosenblum sold), and I enjoy recounting the sagas of family wineries not because they’re romantic — although there’s something to that — but a long, passionate tradition harks back to an authentic story. The vast majority of California’s voluminous wine production is corporately-produced so the family winery is a dying tradition. You can get corporatized overnight but it takes 100 years and lots of passion to make a single business last that long. So maybe when a family winery sells, it feels like Goliath won.
But this story isn’t all doom and gloom. I assume Ted and Pete Seghesio still feel passionate about their grapes (they stayed, right?), and will continue the family brand well into the future. Here’s hoping.
These are interesting economic and financial times. Aside from our domestic issues, the global wine market is adjusting its competitive focus to suit new markets and to reduce cost. Hopefully the corporate ownership will give them the tools to increase market share and bring themselves out of the red.