Fallbrook Winery a Vintage Success Story : Risky Business Pays Off With Profits, Praise

John Culbertson admits that he likes risky businesses.

As a Navy officer, he specialized in bomb disposal. Later he worked as a commercial diver, and now he is president of Martech International, an underwater contracting firm that does work for the oil industry in places such as Alaska, at depths reaching 1,000 feet.

But a few years ago Culbertson decided to start one of the riskiest businesses of all--a winery. As if that wasn’t difficult enough (there are 670 other wineries in California alone), he located it in Fallbrook, a place known for avocados, not grapes. And he was determined to make only top-quality champagne.

It was enough to make a wine aficionado weep with laughter. This guy Culbertson went bankrupt, right?

Wrong. Culbertson Winery turned a profit for the first time last year. Wine buyers and restaurateurs praise Culbertson’s sparkling blends; panels of experts have awarded his wines more than 30 medals in competitions throughout California. Culbertson champagne has even been served at the White House.

The odds against success for any winery are phenomenal, particularly in Southern California, which is not considered one of the great wine-producing regions of the world. Location is part of a winery’s image, and image is of utmost importance in the wine business.

In addition, grapes have been over-planted in California, leading to a glut of wines on the market, fierce competition and low prices. The San Pasqual Winery in Escondido, which was gaining statewide recognition for its premium wines, filed for protection under federal bankruptcy laws in January; among the problems cited by the winery’s owners were competition from foreign wines and a slowdown in the state’s wine industry. In addition, the small but well-received Point Loma Winery ceased operating this year when its two partners decided they were too busy with other projects to continue.

But at a time when the wine industry is slumping, Culbertson and another local wine maker, Mike Menghini of Menghini Winery in Julian, have not only entered the business but are both having some success--for far different reasons. And in a business increasingly dominated by highly trained scientists, Menghini and Culbertson learned wine making primarily through personal experience, not classroom studies.

Culbertson, a stocky, well-tanned man of 51, first became interested in wine while he was living in Australia 19 years ago.

“I fell in love with the wines there, but then we moved to Singapore, and I couldn’t get the Australian wines I was used to,” he recalled. “So we switched to French wines” and gradually learned more and more about the complex process of making wine.

In 1972, Culbertson and his wife, Martha, moved to Houston, a city that became the headquarters for Martech International, Culbertson’s underwater contracting business. Martech’s divers “work all over the Gulf Coast, California and Alaska, and sometimes dive through ice,” he said. They install, repair and inspect oil pipelines, offshore platforms and other industry equipment. “It’s an interesting business,” he said, “but wine making is more interesting.”

While in Houston, Culbertson made his first wine at home--a sweet berry wine that was less than perfect. “I threw it out,” he said, “and it wasn’t the last one I threw out, either. I’ve made some real junk wines.” But he continued to read books on wine making and attended several weekend seminars on the subject at UC Davis.

In 1976, Culbertson and his wife, both graduates of San Diego State University, bought and moved to a 78-acre avocado ranch in Fallbrook. While Martha Culbertson expanded her knowledge of gourmet cooking--she has studied under Julia Child and Jaques Pepin--her husband commuted to Houston during the week.

On the weekends, though, Culbertson began experimenting with making champagne, probably the most difficult wine of all to make. It ferments twice, the second time after it has already been bottled, and the yeasty sediment trapped inside the bottles must be removed without losing the pressurized carbon dioxide that gives champagne its bubbles.

“Its an extremely time-consuming, precision job,” said Dan Berger, a former San Diego journalist who writes a semimonthly wine column syndicated by the New York Times.

Berger still recalls tasting the champagne that Culbertson entered in a homemade wine competition at the Del Mar Fair in 1979.

“The stuff was unbelievable--it had the stamp of care all over it,” Berger said. “He’s very dedicated to absolute quality, and it doesn’t matter what it costs.”

Knew It Would be Risky

Culbertson joked that he decided to make champagne “because it’s a challenge, and besides, my wife loves it. I thought maybe I could cut out the middleman.” But, he added, once he had made champagne successfully, he began to think of opening a commercial winery.

“I knew it would be risky, but few people in California were making champagne, and no one in Southern California was,” he said.

“I also thought for a long time about what grapes to use, and how to blend them to get the taste I wanted. Wine making in general is a lot of science now, but champagne making is an art--the art of blending” different grapes.

Culbertson Winery opened in 1981, after its owner converted a couple of old buildings on his Fallbrook ranch into offices and a production area, complete with underground storage vaults. He bought grapes from vineyards near San Luis Obispo and eventually bottled two different types of champagne with the aid of his neighbors and friends.

Samples of the wine were shipped to every wine competition Culbertson could find an address for, and his Culbertson Natural--a dry champagne--became the top award-winning sparkling wine in the United States that year. Along with the prestige of the medals came recognition and, more importantly, orders.

Culbertson has about $3 million invested in his winery, and his production this year will be about 12,000 cases (there are 12 bottles in a case). The winery makes five main wines: a sparkling rose, a sweet dessert champagne and three dry, classic champagnes.

“Commercially, this is a very risky business, but so far everything we’ve done has worked,” he said.

The road to becoming a wine maker was shorter and far different for Mike Menghini of Julian. After graduating from the University of San Diego in 1975 with a degree in biology, he got a job at the San Pasqual Winery. Three years later he became assistant wine maker at the Callaway Winery in Temecula, and in 1980 he became head wine maker at the nearby Filsinger Winery.

“I used to make beers and dandelion wines when I was growing up in Wyoming,” said Menghini, a personable 39-year-old with a mustache and short gray hair. “But most of my real learning came at Callaway. I was lucky--I’m one of the few people to get a job as a wine maker without a degree in enology.”

Menghini also worked for Culbertson in 1982 before opening his own winery in 1983 in a former apple-packing shed in Julian. Other experts have spurned the area as too cold for making wines or growing grapes, but Menghini insisted that “spring frost is the only problem. We did soil tests, and the soils here are wonderful.”

Still, he conceded, “We did kind of go out on a limb. This is an unproven area.” He has planted four acres of grapes, but currently makes his wines with grapes from Temecula and Ramona while he waits for his own vines to mature.

Menghini makes several varieties of wine, including Chardonnay, white Riesling and Sauvignon Blanc. His most popular wine is Julian Blush, a pink wine made from Gamay grapes grown in Ramona.

“Ninety-five percent of our sales are right here at the winery,” said Menghini. “There’s a natural flow of visitors to Julian--in fact, that’s one of the reasons I picked this area for a winery. When I was starting out, someone asked me what my marketing scheme was, and I said, ‘Julian.’ There are enough people passing through here for me to make a living.”

Going Sweeter

That’s not to say he hasn’t had problems. Menghini originally planned to sell much of his wine to stores and restaurants--until he found out there wasn’t much interest in a new and unproven winery. He has gradually moved toward making a somewhat sweeter style of wine, too, “because I quickly found out you can’t make money selling bone-dry wines to the masses.”

Menghini produces only about 1,500 cases a year, but he said he is deliberately expanding production at his one-man winery slowly. He estimated he has invested $300,000 in the venture so far, and added, “It’s basically paying for itself.”

“Mike is a capable, talented wine maker and a real pioneer,” Berger said. “He just has a gut feeling that Julian will be a good area . . . and it does get awfully cool there at night, which is one of the hallmarks of a great wine-producing district. If he wins a few gold medals, his wine will be far more in demand . . . because medals help sell wine.

“Culbertson was lucky that his product won gold medal after gold medal when it first came out. Also, his timing was good--he had a product that filled a need. Menghini has done remarkably well, but he has a particularly difficult chore ahead of him. He has to give local people a good value.”

So far, that’s exactly what Menghini is doing. Most of his wines sell for $5 to $7 a bottle, compared to the $14 to $16 that Culbertson’s champagnes bring. But Culbertson pointed out that his wines “are at the top end of the price scale, and that’s where they have to be. A small winery like mine can’t compete against Gallo.”

The tricky part is to make sure that his wines are worth the price he asks, he said. He’s convinced that they are.

“We were lucky that we won medals out of proportion to the average winery, but it wasn’t just luck, it was a lot of hard work,” Culbertson said. “Without the medals, the whole thing would have been a disaster, but it still wasn’t easy.”

He recalled that, in 1983, the refrigeration units at his winery failed, causing hundreds of bottles of champagne to overheat and explode. More than two-thirds of his entire 1983 bottling turned into a stream that flowed out of the winery and into the surrounding avocado grove.

“You’ve got to have deep pockets in this business,” he said ruefully.

He’s one wine maker who seems to have them. In addition to the winery, 12 acres of young grapevines and 64 acres of avocado trees, Culbertson and his wife have a 10,000-square-foot house on their Fallbrook ranch, with a panoramic view. Martha Culbertson also uses her culinary skills to run the Fallbrook Grocery Cafe, a gourmet restaurant.

Culbertson still commutes to his office in Houston every week, driving to Lindbergh Field to catch a commercial flight every Monday morning and returning to Fallbrook every Friday afternoon. He said that by 1996 he hopes to be making wine full time, but in the meantime he has hired a wine maker, Ron McClendon, to direct the winery’s complicated day-to-day operations.

“The final decisions on the blends are always mine, though,” Culbertson noted.

“It really is a fascinating business. You’re only limited by your imagination. There’s a lot of love that goes into every step, and after all this time I still get great pleasure from drinking my own champagne.”

That’s just one of the benefits of owning your own winery. But before you run out and start crushing grapes, consider what Culbertson added in his next breath:

“Anybody who starts a new winery these days has got to be nuts.”