Religious Order Tries to Revive Its Winery : Christian Brothers Recasts Its Product Line, Putting Major Emphasis on Quality
The view from Dick Maher’s home spans Napa Valley vineyards west to the picturesque hulk of Greystone Cellars, built just north of here in 1889 of hand-hewn volcanic rock. Maher was among those who urged Greystone’s owner, the even older Christian Brothers Winery, to rehabilitate the venerable structure, which was vacated three years ago after engineers expressed doubt that it could survive a major earthquake.
What Richard L. Maher sees now as he gazes at Greystone through its temporary mask of scaffolding is more than another fine old building saved.
Crowning Touch
As the new president of Christian Brothers Sales Co., the winery’s distribution subsidiary, he views its restoration as a symbol of what he hopes for the winery operation itself.
Greystone’s scheduled rededication on June 19 as Christian Brothers’ visitors center will put the crowning touch on a massive, five-year corporate reorganization of a troubled but unique winery operation.
Run as a tax-paying, privately owned corporation affiliated with a Roman Catholic teaching order, Christian Brothers Winery has used its profits to support a dozen parochial schools in California, including Los Angeles’ Cathedral High, and one in Oregon.
During the past decade, however, those profits--derived from annual wholesale sales estimated at $110 million--have dwindled. Wine sales remained flat, at best, while Christian Brothers’ most profitable product, brandy, lost ground to competitors.
Overall, the brand seemed to lose favor with younger wine drinkers who were more attracted to the scores of smaller and more stylish wineries that have sprung up around Christian Brothers in the Napa Valley and in other California wine regions.
In the midst of these difficulties came Greystone Cellars’ structural problems. Given the winery’s financial straits, the building’s demise seemed to many, including Maher, a distinct possibility.
But today, optimism abounds. And much of that--and the hiring of Maher--is the work of David Brennan, who launched a major overhaul of the beleaguered company soon after being named president and chief executive in July, 1982.
Founded in Champagne
Brennan--or Brother David, as he is more commonly known--is a lay member of the Brothers of the Christian Schools, a teaching order founded in the Champagne area of France in 1680 (and the formal name of the Christian Brothers).
The brothers brought him in to shore up the winery’s profitability--and hence its ability to continue supporting the schools operated by the De La Salle Institute, the Christian Brothers’ educational and religious arm.
Before taking his current job, Brennan was the institute’s chief financial officer. “I was on the receiving end of the money and dispersing the funds to the schools,” Brennan recalled in a recent interview in his office, which looks out onto budding vineyards.
To make sure that the money would keep flowing, Brennan decided on a series of major changes for the winery operation. Those moves included:
- Replanting much of the winery’s choice 1,200 acres of Napa Valley vineyards with such premium varietal grapes as Cabernet Sauvignon, Chardonnay and Sauvignon blanc, replacing cheaper varieties.
- Upgrading the winery’s equipment, improving quality controls and installing a computer system to coordinate operations.
- Buying Christian Brothers’ longtime distributor, Fromm & Sichel, from Seagram (and hiring Maher, then president of Seagram’s wine operations, to head the new unit).
- Consolidating operations by leasing the historic headquarters site atop Mont La Salle in Napa to Hess Vineyard, and moving management and most winery and warehouse operations into three sprawling new buildings on the southern edge of St. Helena. (Brandy and dessert wines continue to be made in the San Joaquin Valley town of Reedley.)
- Hiring a new production executive, chief financial officer and wine maker.
“The team is in place,” Brennan said. “We’re ready to move, and the key word is quality .”
Still, a successful outcome is hardly assured, according to some close observers. “I hope they make it, but I’m not sure they will,” said Gary B. Heck, president of Korbel Champagne & Brandy in neighboring Sonoma County. “But in Dick Maher, they have the best salesperson in the business.”
Now that Christian Brothers controls its operations from vineyards to sales, Brennan said, it at last has the means to manage its destiny.
But first, the company must end its sliding sales. These were brought down further by the years of reorganization and replanting, he acknowledged. Production and sales volume fell as slow-selling products were dropped even before the upgraded vineyards and modernized equipment could begin providing improved replacements.
Now, Christian Brothers has on the market, among other premium wines, a Chardonnay as well as a Sauvignon Blanc and a Zinfandel, with its Cabernet Sauvignon to debut next year, Brennan said. It brought out a port wine made from Zinfandel grapes. And it also introduced its first entrants in the youth-oriented blush wine market--white wines made from red-skinned grapes--including a generic version with the racy (for Christian Brothers) proprietary name of First Blush.
Lagging wine sales were only part of the problem, however.
Even more significantly, sales of Christian Brothers Brandy--which Maher called “the backbone of the company”--also slumped. For years the nation’s leading domestic brand, Christian Brothers Brandy was overtaken in 1985 by Modesto-based Gallo Winery’s handsomely repackaged and richly promoted E & J Brandy.
At a time when brandy sales nationally remained flat, Maher said, sales of Christian Brothers Brandy fell significantly, from a high of more than 1.48 million 9-liter cases in 1984 to barely 1.2 million cases last year, off 19%. In contrast, sales of E & J climbed more than 13%, and those of third-ranked Korbel rose 3%.
Clearly, those gains came at the expense of Christian Brothers--whose shipments have declined, Maher estimated, by about one-fourth.
“That’s really a case of marketing,” said Eileen Fredrikson of the San Francisco wine consulting firm of Gomberg-Fredrikson & Associates. “Here you have a strong and aggressive person (Gallo) just absolutely grabbing market share in a static marketplace. That was time to bring in Dick Maher--or something.”
Maher’s reputation extends from top-executive experience not only with Seagram’s wine operation but with Heublein and E & J Gallo Winery (which is sometimes called the “Gallo University” after its distinguished alumni). While president of Beringer Vineyards, whose Victorian-style headquarters is a stone’s throw from Greystone Cellars, the 54-year-old Maher was credited with helping turn around that pioneer winery.
He said his first priority now is to end the slide in brandy sales and mount a marketing effort to promote the new Christian Brothers premium varietals. His strategy, he said, is to lighten Christian Brothers’ image and broaden a loyal but aging customer base.
The company’s current ad campaign, for example, features puns on the winery’s initials, such as billboards featuring the “See Bee Stinger.” They show a huge picture of a bee with stinger exposed and advise that 1 1/2 ounces of “C. B. Brandy” and 1/2 ounce of schnapps make “a honey of a stinger.”
The stinger ad will be joined soon, Maher said, by the playfully named “Fuzzy Brother”--C. B. Brandy, orange juice and the currently voguish peach schnapps.
“We want to get brandy in more drinks,” he explained.
The billboard ads feature both Christian Brothers Brandy and a branded mixer, such as Coca-Cola or Seven-Up--tie-ins calculated to help distributors win scarce shelf space in the intensely competitive retail market by riding the coattails of the strong-selling mixers. To make his product line more attractive to wholesalers, Maher recently took on distribution of Otard Cognac and Jacquart Champagne from France.
Even after pruning its offerings, however, Christian Brothers still markets a daunting range of 30 products, one of the industry’s most extensive lines. To help consumers sort them out, Maher said he intends to capitalize on the restoration of Greystone Cellars: The premium varietals and new “classic” Napa Valley blends will sport labels bearing a gold-printed image of Greystone tucked under the name Christian Brothers; the mass-priced generics, on the other hand, will be sold under a La Salle Vineyards label (much as neighboring Beringer uses the Los Hermanos brand for its jug wines).
Maher said he finds it refreshing, after years of working for public companies with their close attention to the bottom line, to work for the education-oriented brothers with their emphasis on long-term results and willingness to go along with the painful and costly restructuring and replanting--not to mention spending the millions of dollars needed, in the face of falling sales, to bring back Greystone.
“It helps when you don’t have to march to the drum of Wall Street,” Maher acknowledged. “We don’t have any shareholders--only some angels, maybe.”
