Shift at Almaden : Heublein to Sell San Jose Facility
Two days after wrapping up its purchase of Almaden Vineyards, Heublein Inc. said Wednesday that it will dismantle much of the company and sell Almaden’s historic San Jose facilities.
Heublein said that it will transfer production at San Jose to its modern winery at Madera in the San Joaquin Valley and will move all of Almaden’s administrative operations to Heublein’s Farmington, Conn., headquarters.
Eugene B. Scialdone, a Heublein spokesman, said that the company also is considering selling or leasing other Almaden operations. In all, more than 300 jobs will be eliminated.
The actions are “a logical conclusion to a strategy we have pursued to strengthen our overall competitive position in the wine business,” said Heublein Chairman John A. Powers in a prepared statement.
“The moves are consistent with Heublein’s strategy of greater production efficiency in our wine operations and will greatly increase the marketing and sales effectiveness needed to continue to build this historic brand and its franchise,” Powers said.
Oldest Producing Winery
Almaden Vineyards, probably the nation’s oldest producing winery, was founded in 1852 by Frenchmen Charles Lefranc and Etienne Thee, who were drawn to California by the Gold Rush. They named their winery New Almaden after a nearby quicksilver mine.
Almaden’s San Jose operations include historic buildings dating back to the 1860s and 1870s that are used as wine cellars, a tourist center and a tasting room. The buildings also include an administrative headquarters and a bottling and finishing operation. The San Jose phase-out is expected to be completed by late summer, the company said.
Most of Almaden’s wine-making is done at the Paicines winery in San Benito County, which Almaden will continue to operate, Scialdone said. A smaller operation in San Benito County, the Cienega winery, may be leased or sold, he said. Two other wineries, at Kingsburg and McFarland, also are for sale, Scialdone said.
In addition, Heublein plans to sell or lease all of its 3,275 acres of vineyards in San Benito and Monterey counties, Scialdone said.
“Heublein is not in the farming business. We buy our grapes,” he said.
Before its Almaden purchase, Heublein already owned the prestigious Beaulieu and Inglenook wineries in Napa Valley. At the Madera plant, Heublein produces Inglenook Navalle wine.
Heublein’s moves will eliminate more than half of Almaden’s 575 jobs. Between 85 and 90 of the current 275 salaried workers will be offered sales and administrative positions, Scialdone said. More than 150 jobs will be added at Madera although not all of those will go to Almaden employees from San Jose, he said.
“There is a heartstring tug for everyone in the industry, not least of which for Heublein, when you think of those wonderful old buildings,” said Eileen Fredrikson, executive vice president and a partner in Gomberg-Fredrikson Associates, a San Francisco consulting firm. “From a purely practical standpoint, they can make very good wines in that facility in Madera and the remaining facilities they intend to keep.”
“It sounds like a bigger deal than it is in terms of the wine business,” since most of Almaden’s wine-making operation will remain intact, said Paul Gillette, editor and publisher of The Wine Investor, an industry newsletter. However, Gillette said he was surprised by Heublein’s plan to sell or lease Almaden’s vineyards.
The valuable San Jose property was part of Almaden’s appeal, and its sale--probably to real estate developers--will continue the exodus of wine-making operations from the San Jose area, Gillette said.
