Name Can Flavor Wine’s Success
Vintner R. Michael Mondavi knows what he wants to put in the bottle -- he’s just not sure what he can put on the label.
Two years after leaving the family business in a messy internal squabble and subsequent buyout, he has purchased a Napa Valley winery where he plans to produce a high-end Cabernet Sauvignon that would include the famous Mondavi name.
One hitch: Constellation Brands Inc., the world’s largest wine company, acquired the name when it bought Robert Mondavi Corp. of Oakville, Calif., for $1 billion from the family and public shareholders.
His uncle Peter owns the rights to make wine under the CK Mondavi Family Vineyards label.
That leaves Michael Mondavi, 63, in a quandary over what he can call his new premium wine, which will be made at the Carneros Creek Winery he acquired from Francis and Kathleen Mahoney in a deal announced Monday.
Terms were not disclosed, but industry sources said the asking price for the facility, which can handle as much as 100,000 cases annually, was about $7 million.
“At some point I would like to get the name on the wine,” Mondavi said. But that depends on discussions with Constellation Brands, which acknowledged the talks but seemed unwilling Monday to cede the name to Mondavi.
“To Constellation Brands, the Robert Mondavi trademark is a valued and important asset, and we will protect that asset from anything which could result in marketplace confusion to the consumer,” the company said in a statement.
“Historically, Constellation management has had a good rapport with Michael Mondavi,” said Mike Martin, spokesman for the Fairport, N.Y.-based beverage giant, which in 2004 acquired the Mondavi family’s iconic Oakville winery and the Woodbridge facility where it makes less-expensive wines.
Adding to the potential confusion: Mondavi’s 93-year-old father, Robert, and two siblings are considering their own return to the business.
Regaining some use of the family name, even if just to put a signature on the label, would help Michael Mondavi’s efforts to get back into the business, said Tom Pirko, president of Bevmark, a Santa Ynez, Calif., wine and beverage consulting firm.
One major retailer also thought that getting Mondavi on the wine would help the venture.
“When it comes to wine, the Mondavi name is recognized all over the world,” said Steve Wallace, owner of Wally’s Wine & Spirits in Westwood.
Mondavi, once chairman and chief executive of the eponymous winery founded by his father, was ousted in a bitter public boardroom brawl over a plan to sell the famous Mission-style winery in Oakville, its best vineyards and brands to focus on budget wines.
The fight ended when Constellation swept in and bought the company. Mondavi used his proceeds from the sale to finance the new venture.
This time around, “we plan to have fun but not make the mistake again of getting too large,” Mondavi said.
Said Pirko: “There’s nothing Americans like better than comebacks. Mondavi has the chance to do something small and focused, and there will be a good story to it. It is the American way to pull yourself back up.”
He called Mondavi a dedicated and “intensely serious guy” who will make a good product.
Mondavi also faces an uphill battle competing against more than 1,000 California wine labels as well as imports arriving in the American market from around the world.
“It is getting harder and harder to succeed in the wine business,” Pirko said. “There are too many labels and a lot of consumer confusion, and that will work against him.”
Nonetheless, the reputation Mondavi built at his father’s company will help him get the attention of retailers, Wallace said. “He is well respected in the wine trade. I would look forward to seeing something of his.”
The Carneros winery also will become the permanent home for Mondavi’s I’M, Oberon and Hangtime labels, previously produced there on a contract basis. The grapes will come from several hundred acres of vineyard he owns elsewhere in Napa County as well as the winery’s 10-acre vineyard. He has a contract to purchase an adjacent 9 acres.
For the most part, Mondavi’s wines will sell for $8 to $25. The Cabernet would retail for about $150 a bottle and would be comparable to other top red wines produced in Napa, he said.
“It will be a few thousand cases at most,” Mondavi said.
Whatever the label, it will still be a family business, he said: Son Robert will be one of the principal winemakers.