A Vintner Rides the Roller Coaster of Success

Rodney Strong settled back in his chair, looked at the ceiling in his office and sighed when the inevitable question was asked about the reincarnation of the winery that bears his name.

“There are a lot of emotional swings in the business of wine,” he said, somewhat abstractly. “It’s all like a game. If you are mature at all, you realize what the score is and go forward. If you are immature, you allow your personality to take over and that ruins you.”

The response was an indication that Rod Strong, 62, a wine maker for three decades and one of the first members of the second generation of Sonoma County wineries, is content to ride yet another bronc in the rodeo known as the corporate winery.

Worth $40 Million

When Rodney Strong Vineyards was sold a year ago to Klein Foods of Stockton in a deal estimated to be worth nearly $40 million, it was the latest chapter in a story that has so many twists and turns it would confuse Nero Wolfe. The sale ended a wrenching two decades of roller-coaster economics that saw the winery borrow heavily, grow successful, offer public stock, wind up nearly destitute and finally end up on the block.

Today, Strong--who says “this place was unwanted and unloved for three regimes”--retains his old office up the wrought-iron circular staircase on the second floor. And he is pleased that the winery he created is now in understanding hands. The wines he pioneered from various regions of Sonoma’s north county soil remain good values and promise to improve when the new owner has time to make his commitment felt.

Yet Strong, a former Folies Bergere dancer and choreographer with a faraway, artistic look in his eyes under a wreath of white locks, is on this midsummer day not as puckish as he once was. The eyes appear a bit more wary. Perhaps the agony of the last few years has left him looking over his shoulder.

Strong and his wife, Charlotte, got into the wine business in 1960 when they opened a tasting room in Tiburon to sell wines bought in Sonoma County.

Within two years, Strong and partner Pete Friedman moved to Windsor, north of Santa Rosa and 65 miles north of the Golden Gate Bridge, and developed a direct-mail marketing division to sell their wines by mail, through phone solicitation.

After a series of private financing deals (that leveraged the place a bit), Windsor Vineyards opened a new $2-million winery in 1970 and an initial public stock offering was completed at $5 a share.

A year later, with the stock at $41 a share, Windsor expanded, and in 1972 a second stock offering, at $28.50 per share, was completed. In 1973, Windsor became the name of the mail-order part of the business and Sonoma Vineyards became the name of the wines marketed to restaurants and retail.

But within two years, an industrywide slump and other complications of business left the company $20 million in debt, leading Strong and Friedman to the decision in 1976 to sell a major portion of the company to Renfield Importers.

Renfield took over management of the company and Friedman soon left. Renfield, which had pumped $4 million into the facility, then began buying up small tool companies in a diversification move that eventually fizzled.

In 1982, the name of the winery was changed to Rodney Strong Vineyards. Despite record revenues in 1982 of $48 million, and then another record $60.4 million in 1983, Sonoma Vineyards’ profits were flat. In 1984, the firm announced that debt had risen to $37 million.

With the stock then trading for $1.63 per share, Renfield took the company private with a $2 per share tender offer. Shortly after, in 1986, Renfield sold the company to Schenley Industries of New York. And less than two years later, Guinness of Great Britain, the world’s largest drinks company, acquired Schenley and announced it was getting out of the wine business. Rodney Strong Vineyards would be sold again.

Referring to the Renfield-Schenley-Guinness periods of his life, Strong says: “No one wanted to put money into it (the winery) because they weren’t in it for the long haul.” Oak barrels and other equipment needed to make fine wine weren’t replaced, and marketing suffered.

At this point in the narrative, Strong reached across the table and poured a glass of his 1986 Fume Blanc ($8). He pushed it toward me and said, “Here, try this. We’ve got to get off the business pages and back onto the wine pages. We’re a winery, not a Wall Street chip.”

The wine was elegant, with a direct, no-oak melon-and-pepper steeliness and a crisp finish.

Establishing a Style

“Our ’87 will be like this. We like to establish a style for a wine and ride that donkey until someone tells us it’s lame.”

Yeah, but what was it like being a public company for 15 years?

“There is a stigma attached to being on the financial pages. Public ownership is a detriment to a winery’s health. You have to be concerned about your earnings per share each quarter when you should be making decisions long-term, not worrying where you’re going to be in 90 days.

“Reporting to the SEC (Securities and Exchange Commission) is a lot different than making wine,” said the man who once taught drama at San Francisco State University and who remains a consummate after-dinner speaker, filled with decades of wine-making memories.

Strong’s latest wine releases are about a year older than some other wineries’ because sales have suffered in recent years. (Shipments were off 10% in 1988, according to one estimate.) I liked the 1984 Cabernet Sauvignon from the famed Alexander’s Crown Vineyard ($13), a fairly rich, dense wine with spice/cedar elements and an anise-clove aftertaste.

Other wines I liked were the rich, gutsy, amply endowed 1981 Zinfandel “Old Vines” from a pre-Prohibition era vineyard ($8), a concentrated, marvelously structured 1985 Johannisberg Riesling Late Harvest ($9 half-bottle), and a smooth, approachable 1985 Merlot from the River West Vineyard ($12) that would be a good choice for restaurants because of early drinkability.

Wine maker for the last few years here has been Rick Sayre, whose name has appeared on a number of special-designation wines under the Windsor label. Now Strong and Sayre will have a chance to show what they can really do.

New owner Tom Klein, a quarter-century Strong’s junior, has spent more than $1 million in the first phase of refurbishing the winery. Strong says, “He’s spiffed the old girl up a bit.” Included in that touch-up is the addition of some $300,000 in new oak barrels in which to age the wine.

“I think present management is interested in premium wine,” Strong said. “Premium wine can be profitable because it enhances the asset value of the brand. Now, instead of being known as a factory, the philosophy here is smaller but better.”

Just two years ago, Rodney Strong and Windsor were closing in on 500,000 cases of production annually. Last year, shipments were just over 400,000 cases, and only about 30% was under the Strong label; the rest was Windsor, sold via a telephone marketing system.

Still, Strong appears slightly hesitant about getting too enthusiastic about his new partners, and one can hardly blame him. Just 18 months ago, after Guinness announced it would sell Rodney Strong Vineyards, Strong put together a financial group and was an eager bidder for the property.

Klein was another bidder, and for a period of time the two factions were financial foes waging a war to win the property. Klein won, and for another period of time it was unclear if Klein would retain Strong. “The transition has been quite amicable,” says Strong.

Klein, in a brief chat at the recent Sonoma County Wine Auction and Showcase, said he was pleased with the way things were going, and that major changes would regain the fame Sonoma Vineyards once had.