For only the second time in its 27-year history, the Robert Mondavi Winery has put out a new wine label--and it did so literally on the day that the winery sought to become the third publicly-held U.S. winery.
To consumers, the new wines are of greater interest than Friday’s other news: That the winery had filed a registration statement to issue 3.7 million shares of stock to the public.
With the word Carneros written boldly across the new white labels, the wines--a 1991 Chardonnay and a 1991 Pinot Noir--proudly proclaim their birthplace. This is no breakthrough, as many wineries have long used grapes from this area. But by designating Carneros on the label, Mondavi puts the weight of its image and marketing acumen behind a region that is emerging as one of the most important wine-growing areas in the country.
Carneros is located in the southern parts of Napa and Sonoma counties. Because of the cool breezes that flow in off San Pablo Bay to the south, it is proving to be a particularly hospitable site for growing Burgundian grape varieties.
Mondavi began making Pinot Noir in the 1960s, but it wasn’t until 1977 that it really began to hit its stride with the variety. For the last few years the firm has been one of the top California producers of the variety. Putting the word Carneros on a wine label, says winemaker Tim Mondavi, is reflective of the winery’s progress over the last 15 years.
“We knew from the early 1970s that Carneros was a great region for these varieties,” says Mondavi. Two-thirds of Mondavi’s Reserve Pinot Noir is from the Carneros. But not until four years ago, when the family acquired more than 400 acres of Carneros vineyard, was it feasible to put the designation on the label, which guarantees that at least 85% of the wine will be from the Carneros.
Indeed, the Pinot Noir ($20) is the better of the two new Mondavi wines, with smoky cherry and tar notes and a complex taste that will develop even further with a few more years in the bottle. Still, it is neither as deep nor as rich as the Reserve bottling of the same variety, which sells for $27.50.
The Carneros Chardonnay, made in the rich Mondavi Reserve style, is leaner and more delicate than the Reserve bottling.
No one knows for sure how the stock offering will affect the consumer, but industry sources say it can only help to improve the wines.
“We get a lot of support from our shareholders,” says Dick Graff, president of Chalone Wine Group, which went public a decade ago. “If our shareholders go into a restaurant or a wine shop and don’t see our wines, they’re not shy about asking for them.”
Jon Fredrikson of the San Francisco wine industry consulting firm of Gomberg, Fredrikson & Associates says the stock offering is an almost can’t-fail deal for the Mondavis.
“With the glamour of the Mondavi family, they’re likely to sell the issue easily,” Fredrikson says, adding that since only 30% of the shares in the winery are being offered, the Mondavi family will retain control.
Fredrikson says this “could be a prelude to other public offerings by wineries, but there aren’t many companies that are this attractive. They are the seventh largest California winery overall.”
It is estimated that the offering could raise as much as $60 million, which would allow Mondavi to further expand the winery, undertake a $17-million replanting of phylloxera-infected vineyards, and invest in overseas wine ventures (Chile is mentioned as a strong possibility).
Robert Mondavi founded his winery in 1966 when he was pushed out of the family-owned Charles Krug Winery. Mondavi is no longer active in the winery on a daily basis. Sons Michael and Tim are co-managing directors; their sister, Marcia, is a partner. Clifford Adams is chief operating officer.
Chalone, which opened a decade ago at $8 per share, currently is selling for just under $7. Graff said shareholders in Chalone have been loyal to the company in spite of no stock price growth and one of the secrets is the fact that stockholders are offered special wines, such as a Shareholders Reserve Chardonnay, that are sold at a reasonable price only to people who own stock in the company.
The Mondavi empire is believed to have assets of about $225 million, including the main winery in Oakville at the southern end of the Napa Valley, the large Woodbridge winery in Lodi, in the northern San Joaquin Valley, 1,800 acres of Napa Valley vineyards, more than 1,000 acres in Santa Barbara County, the Vichon Winery in the Napa Valley, the Byron Winery in Santa Barbara County, and a 50% share in the Opus One Winery in Oakville, a joint partnership with Chateau Mouton-Rothschild of Bordeaux.
Robert Mondavi Corp. projects earnings of $190 million for fiscal year 1993, which ends June 30. This compares with $95 million in 1988.
Wine of the Week
1991 Zerbina “Ceregio,” Sangiovese di Romagna Superiore ($8) --This Italian wine is from Romagna and is made of Sangiovese, the grape from which Chianti is made. In this case, there are no blending grapes (as are required of Chianti). The wine has a classic raspberry-and-earth aroma and smooth fruit flavor. The finish is tart, making it perfect with pasta and tomato sauces. In the same Chianti-esque vein, 1991 Rosso Connero from Umani Ronchi ($8) is another great value--a trace spicier, with a bit more of the earthy notes.