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Full text of "Management and marketing at Beringer Vineyards and Wine World, Inc. : oral history transcript / 1990"

161 




University of California Berkeley 
REGIONAL ORAL HISTORY OFFICE 



Regional Oral History Office University of California 

The Bancroft Library Berkeley, California 



The Wine Spectator California Winemen Oral History Series 



Michael Moone 

MANAGEMENT AND MARKETING AT 
BERINGER VINEYARDS AND WINE WORLD, INC. 



With an Introduction by 
Charles A. Carpy 



An Interview Conducted by 

Lisa Jacobson 

in 1989 



Copyright (c) 1990 by The Regents of the University of California 



Since 1954 the Regional Oral History Office has been interviewing 
leading participants in or well -placed witnesses to major events in the 
development of Northern California, the West, and the Nation. Oral history is 
a modern research technique involving an interviewee and an informed 
interviewer in spontaneous conversation. The taped record is transcribed, 
lightly edited for continuity and clarity, and reviewed by the interviewee. 
The resulting manuscript is typed in final form, indexed, bound with 
photographs and illustrative materials, and placed in The Bancroft Library at 
the University of California, Berkeley, and other research collections for 
scholarly use. Because it is primary material, oral history is not intended 
to present the final, verified, or complete narrative of events. It is a 
spoken account, offered by the interviewee in response to questioning, and as 
such it is reflective, partisan, deeply involved, and irreplaceable. 



************************************ 

All uses of this manuscript are covered by a legal 
agreement between the University of California and 
Michael Moone dated November 3, 1989. The manuscript is 
thereby made available for research purposes . All 
literary rights in the manuscript, including the right 
to publish, are reserved to The Bancroft Library of the 
University of California, Berkeley. No part of the 
manuscript may be quoted for publication without the 
written permission of the Director of The Bancroft 
Library of the University of California, Berkeley. 

Requests for permission to quote for publication 
should be addressed to the Regional Oral History Office, 
486 Library, University of California, Berkeley 94720, 
and should include identification of the specific 
passages to be quoted, anticipated use of the passages, 
and identification of the user. The legal agreement 
with Michael Moone requires that he be notified of the 
request and allowed thirty days in which to respond. 

It is recommended that this oral history be cited as 
follows : 

Michael Moone, "Management and Marketing 
at Beringer Vineyards and Wine World, 
Inc.," an oral history conducted in 1989 
by Lisa Jacobson, Regional Oral History 
Office, The Bancroft Library, University 
of California, Berkeley, 1990. 



Copy no. 




MICHAEL MOONE 
1990 



Cataloging Information 

MOONE, E. Michael [b. 1940] Wine Marketer 

Management and Marketing at Beringer Vineyards and Wine World. Inc.. 1990, 
viii, 109 pp. 

Career as salesman with Procter & Gamble; Beringer Vineyards and its umbrella 
company, Wine World, Inc., 1973-1989: marketing in the 1970s, Beringer 
President Richard Maher, sales and pricing, Los Hermanos label, revitalization 
of Beringer under Nestle, acquisitions of Souverain Cellars, Asti winery, 
Estrella River Winery, developing premium brands, export markets; wine 
industry organizations. 

Introduction by Charles A. Carpy, Freemark Abbey Winery 

Interviewed in 1989 by Lisa Jacobson for the Wine Spectator California Winemen 
Series. The Regional Oral History Office, The Bancroft Library, University of 
California, Berkeley. 



TABLE OF CONTENTS -- E. Michael Moone 



PREFACE i 

INTRODUCTION, by Charles A. Carpy v 

INTERVIEW HISTORY vii 

BRIEF BIOGRAPHY viii 

I EARLY YEARS AND EDUCATION ! 
Growing Up in Southern California 

University Education 2 

An Early Role Model 3 

Development of Interest in Wine 4 

Wine Collecting 5 

Fraternity Life: Preparation for the World of Business 7 

Interest in Cooking g 

II CAREER AT PROCTER & GAMBLE 9 

Sales Responsibilities 9 

Recruiting Activities 10 

Traits of a Good Salesperson n 

Affirmative Action 13 

First Contact with Richard Maher 14 

III BERINGER VINEYARDS AND WINE WORLD, INC., 1973-1989 15 

Joining the Company 15 

Early Responsibilities and Training 16 

Key Personnel 17 

Marketing Challenges in the Early Seventies 20 

Richard Maher 's Contributions as President 21 

Pricing Philosophy 22 

Building National Sales 22 

Relationship with Distributors 23 

Qualities Desired in Salespeople 25 

Sale of Fontana Candida 27 

Reshaping Product Lines 29 

IV LOS HERMANOS BRAND 31 

Airline Package 31 

Boon to Distribution of Beringer Wines 32 

Introduction of Light Wines 33 

Declining Jug Wine Sales 35 



V BERINGER VINEYARDS 37 

Renaissance of the Beringer Label 37 

Market Research Studies 38 

Rebuilding the Winery 39 

Beringer Vinemakers 39 

Vineyard Acquisition and Management 41 

Beringer White Zinfandel 42 

Streamlining Beringer 's Wine Portfolio 44 

Jim Tonjum's Contributions to Premium Wine Marketing 47 

Wine Competitions 48 

Advertising and Public Relations Budgets 48 

VI NAPA RIDGE 50 

Carving a Niche Among the Fighting Varietals 50 

Strategies for Competing in the Fighting Varietals Market 52 

Broadening the Consumer Base through Fighting Varietals 53 

VII C & B VINTAGE CELLARS 55 

The C & B Portfolio 55 

Focus on Expensive Brands 58 

Impact of a Strong Dollar 58 

Shipping 59 

VIII ACQUISITIONS AND PREMIUM BRAND DEVELOPMENT 61 

Maison Deutz Partnership 61 

Acquisition of Souverain Cellars 63 

Acquisition of Asti Winery 65 

Chateau Souverain Brand 66 

Acquisition of Estrella River Winery 67 

Meridian Brand 68 

Other Vineyard Purchases 69 

Strategy for Developing Premium Brands 70 

Foreign Investment and Long-term Business Orientations 71 

Ownership Changes 72 

IX EXPORTS 74 

European Market 74 

Japanese Market 75 

Trade Barrier Issues in Canada and Japan 76 

Wine Marketing and Distribution in Japan 77 

Wine Marketing and Distribution in Europe 78 

Targeted Export Assistance Program 79 

Developing Brand Recognition in Foreign Markets 80 

Japanese Distribution Companies 81 

Benefits of Import Experience 81 

Focus on High Image Wines 81 



X CULINARY ARTS PROGRAM 83 

Scholarships for Chefs 83 

Hudson House Renovation 84 

Chateau Souverain Restaurant 85 

Madeleine Kamman's School for American Chefs 85 

Matching Food and Vine 86 

XI INDUSTRY ACTIVITIES AND CONCERNS 89 

Market Development Committee, Wine Institute 89 

Formation of National Wine Coalition 91 

Expansion of Premium Wine Business 91 

Advertising Wine as an Everyday Beverage 92 

Health Issues and AWARE 93 

Wine and the American Heritage 94 

National Wine Coalition 95 

Importance of Industry Affairs to Beringer's Success 95 

Definition of a Winery Committee 96 

Wine Train 97 

Grower-Vintner Relations 98 

Napa Valley Vintners 100 

Wine Industry's Economic Contributions 101 

Wine and Spirits Wholesalers' Association 103 

Wine Industry Culture 103 

TAPE GUIDE 105 

INDEX 1 06 



PREFACE 



The California wine industry oral history series, a project of the 
Regional Oral History Office, was initiated in 1969 through the action 
and with the financing of the Wine Advisory Board, a state marketing 
order organization which ceased operation in 1975. In 1983 it was 
reinstituted as The Wine Spectator California Winemen Oral History Series 
with donations from The Wine Spectator Scholarship Foundation. The 
selection of those to be interviewed is made by a committee consisting of 
James D. Hart, director of The Bancroft Library, University of 
California, Berkeley; John A. De Luca, president of the Wine Institute, 
the statewide winery organization; Maynard A. Amerine, Emeritus Professor 
of Viticulture and Enology, University of California, Davis; the current 
chairman of the board of directors of the Wine Institute; Ruth Teiser, 
series project director; and Marvin R. Shanken, trustee of The Wine 
Spectator Scholarship Foundation. 

The purpose of the series is to record and preserve information on 
California grape growing and wine making that has existed only in the 
memories of wine men. In some cases their recollections go back to the 
early years of this century, before Prohibition. These recollections are 
of particular value because the Prohibition period saw the disruption of 
not only the industry itself but also the orderly recording and 
preservation of records of its activities. Little has been written about 
the industry from late in the last century until Repeal. There is a real 
paucity of information on the Prohibition years (1920-1933), although 
some commercial wine making did continue under supervision of the 
Prohibition Department. The material in this series on that period, as 
well as the discussion of the remarkable development of the wine industry 
in subsequent years (as yet treated analytically in few writings) will be 
of aid to historians. Of particular value is the fact that frequently 
several individuals have discussed the same subjects and events or 
expressed opinions on the same ideas, each from his own point of view. 

Research underlying the interviews has been conducted principally in 
the University libraries at Berkeley and Davis, the California State 
Library, and in the library of the Wine Institute, which has made its 
collection of in many cases unique materials readily available for the 
purpose . 



ii 



The Regional Oral History Office was established to tape record 
autobiographical interviews with persons who have contributed 
significantly to recent California history. The office is headed by 
Willa K. Baum and is under the administrative supervision of James D. 
Hart, the director of The Bancroft Library. 



Ruth Teiser 
Project Director 

The Wine Spectator California Winemen 
Oral History Series 

June 1990 

Regional Oral History Office 
486 The Bancroft Library 
University of California, Berkeley 



iii 



CALIFORNIA WINE INDUSTRY INTERVIEWS 

Interviews Completed by 1990 
Leon D. Adams, Revitalizing the California Wine Industry. 1974 

Leon D. Adams, California Wine Industry Affairs: Recollections and Opinions. 
1990 

Maynard A. Amerine, The University of California and the State's Wine 
Industry. 1971 

Maynard A. Amerine, Wine Bibliographies and Taste Perception Studies. 1988 

Philo Biane, Wine Making in Southern California and Recollections of Fruit 
Industries . Inc. . 1972 

John B. Cella, The Cella Family in the California Wine Industry. 1986 

Charles Crawford, Recollections of a Career with the Gallo Winery and the 
Development of the California Wine Industry. 1942-1989. 1990 

Burke H. Critchfield, Carl F. Wente , and Andrew G. Frericks , The California 
Wine Industry During the Depression. 1972 

William V. Cruess, A Half Century of Food and Wine Technology. 1967 

Jack and Jamie Peterman Davies, Rebuilding Schramsberg: The Creation of a 
California Champagne House. 1990 

William A. Dieppe, Almaden is Mv Life. 1985 

Alfred Fromm, Marketing California Wine and Brandy. 1984 

Louis Gomberg, Analytical Perspectives on the California Wine Industry. 1935- 
1990. 1990 

Joseph E. Heitz, Creating a Winery in the Napa Valley. 1986 

Maynard A. Joslyn, A Technologist Views the California Wine Industry. 1974 

Amandus N. Kasimatis, A Career in California Viticulture. 1988 

Morris Katz, Paul Masson Winery Operations and Management. 1944-1988. 1990 

Legh F. Knowles, Jr., Beaulieu Vineyards from Family to Corporate Ownership. 
1990 

Horace 0. Lanza and Harry Baccigaluppi , California Grape Products and Other 
Wine Enterprises. 1971 

Louis M. Martini and Louis P. Martini, Wine Making in the Napa Valley. 1973 
Louis P. Martini, A Family Winery and the California Wine Industry. 1984 



iv 



Eleanor McCrea, Stony Hill Vineyards: The Creation of a Napa Valley Estate 
Winery. 1990 

Otto E. Meyer, California Premium Wines and Brandy. 1973 

Norbert C. Mirassou and Edmund A. Mirassou, The Evolution of a Santa Clara 
Valley Winery. 1986 

Peter Mondavi, Advances in Technology and Production at Charles Krug Winery. 
1946-1988. 1990 

Robert Mondavi, Creativity in the Wine Industry. 1985 

Michael Moone , Management and Marketing at Beringer Vineyards and Wine World. 
Inc.. 1990 

Myron S. Nightingale, Making Wine in California. 1944-1987. 1988 
Harold P. Olmo, Plant Genetics and New Grape Varieties. 1976 

Cornelius Ough, Researches of an Enologist. University of California. Davis. 
1950-1990. 1990 

Antonio Perelli-Minetti, A Life in Wine Making. 1975 

Louis A. Petri, The Petri Family in the Wine Industry. 1971 

Jefferson E. Peyser, The Law and the California Wine Industry. 1974 

Lucius Powers, The Fresno Area and the California Wine Industry. 1974 

Victor Repetto and Sydney J. Block, Perspectives on California Wines. 1976 

Edmund A. Rossi, Italian Swiss Colony and the Wine Industry. 1971 

Edmund A. Rossi, Jr., Italian Swiss Colony. 1949-1989: Recollections of a 
Third-Generation California Winemaker. 1990 

Arpaxat Setrakian, A. Setrakian. a Leader of the San Joaquin Valley Grape 
Industry. 1977 

Elie Skofis, California Wine and Brandy Maker. 1988 

Andre Tchelistcheff , Grapes. Wine, and Ecology. 1983 

Brother Timothy, The Christian Brothers as Wine Makers. 1974 

Ernest A. Wente, Wine Making in the Livermore Valley. 1971 

Albert J. Winkler, Viticultural Research at UC Davis (1921-1971). 1973 



INTRODUCTION -- E. Michael Moone 



Dame fortune is a fickle one at best, yet here in Napa Valley she let 
her richness shine on an industry, community, and company in turning 
over the leadership of Beringer Vineyards and the umbrella company of 
Wine World Estates to E. Michael "Mike" Moone in 1984. Mike's vision 
of the future of the wine industry, as well as the position of his 
company in it, set the course for the last six years which I'm sure 
will be a quality force in the future. Mike has created an enviably 
successful, geographically diverse company which has three first-rate 
winemaking facilities: Beringer in St. Helena, Chateau Souverain in 
Geyserville, and Meridian in Paso Robles, all supported by some of the 
finest vineyards attainable. Quality is exemplified not only in the 
physical assets of the wineries, but maybe more importantly in the 
caliber of the employees. There is no question Mike's enthusiasm and 
demonstrated success permeates the company with that same desire to 
excel, and excel they do. Over three million cases are now produced 
by these wineries, with top-notch wines in every varietal and price 
category. 

I first met Mike after he became president of Beringer. Our 
association grew naturally through winery activities, and because our 
home is adjacent to the Beringer property. Mike is a gracious host. 
Various functions at the Rhine House and the newly renovated Hudson 
House provided the opportunity to meet his charming wife, Valerie, and 
his two lovely daughters, Erika and Erin. Erika, who entered Stanford 
on a swimming scholarship earned during her senior year in high 
school, will be a junior this year. Erin will be attending the 
University of California, Santa Barbara, this fall. Mike possesses a 
quick wit, never fails to have a new story or two, and when not at 
work can usually be found pursuing his passion* -golf . 

As would be expected, Mike is very active in industry 
organizations. He has served on the executive committee and board of 
directors of the Wine Institute, is currently a vice chairman, and 
scheduled to be chairman in June 1994. In addition, he has served on 
various boards and committees of the Napa Valley Vintners and the 
California Wine Commission. Mike and the Beringer Winery provide 
wonderful support to our community and its schools . They have 
furnished a substantial investment in computers to help develop an 
integrated computer literacy program that starts down in the early 



vi 



grades, and just recently made a substantial contribution to an 
affordable homes program. This ability to share the rewards of 
success makes Mike in every good sense truly a good neighbor. 



Charles A. Carpy 
Freemark Abbey Winery 



July 6, 1990 

St. Helena, California 



vii 



INTERVIEW HISTORY -- E. Michael Moone 



E. Michael Moone was interviewed in three sessions at his 
Beringer Vineyards office to document his career at Beringer Vineyards 
and the umbrella company of Wine World, Inc. An active participant in 
wine industry affairs and a skilled wine marketer, Mr. Moone has been 
a wine lover from age 18 and a serious collector since his late 
twenties. Following an 11-year career with Procter & Gamble, 
Mr. Moone joined Beringer Vineyards in 1973, merging his talents in 
sales and marketing with his passion for wine. Ten years later he 
assumed the helm of Beringer Vineyards and has been credited with 
managing one of the best run wineries in California 

President since 1984, Mr. Moone has overseen Beringer Vineyards 
and the wine portfolio of Wine World's other operating divisions. All 
are holdings of Nestle, the Swiss multinational which first bought 
into the California wine industry when it acquired Beringer in 1972. 

The interview begins with a career overview, followed by a 
discussion of each operating division. Los Hermanos represents the 
jug wine label, Napa Ridge is the line of negotiant varietals , and 
C fit B Vintage Cellars is the import division. Beringer Vineyards, 
Chateau Souverain, Maison Champagne Deutz, and Meridian complete the 
line of premium brands. Commenting on brand development, geographic 
diversification, and vineyard investments, Mr. Moone elaborates a 
strategy for success in the long-term business of wine. He also 
discusses imports and exports, industry politics, and Beringer 
Vineyards' extensive culinary arts program. 

Mr. Moone carefully reviewed his manuscript. Photographs were 
graciously provided by Beringer 's public affairs staff. 



Lisa Jacobson 
Interviewer -Editor 



August 1990 

Regional Oral History Office 

486 The Bancroft Library 

University of California at Berkeley 



Room 486 The Bancroft Library 



viii 



Berkeley, California 94720 



BIOGRAPHICAL INFORMATION 



Your full name 



(Please write clearly. Use black ink.) 

M f (***-( fa oy fs/fe- 



Date of birth 



ft - Z ~ *j O 



Birthplace ***-^* 



Father's full name 



Occupation Pi let - 



Birthplace 



Mother's full name \f \ A. *\ 
Occupation 

Your spouse _ \/ eL I 



Birthplace 



er*. t is 



Your children 



t fc-* I \ 



/* '< /* 



( 

" 



\ Us\ (+<n^ } 



Where did you grow up? 

Present community 

Education ft . ^ 



AM i/<ts&&** 



A *-((* f . ^ 



Occupation (s) 



- 



Areas of expertise 



Other interests or activities 



*\o \ 



Organizations in which you are active 



I EARLY YEARS AND EDUCATION 
[Interview 1: 24 July 1989 ]## 1 

Growing Up in Southern California 



Jacobson: 



Moone : 



Let's start at the very beginning, with when and where you were 
born. 



A good idea. 
June 2, 1940. 



I was born in Santa Monica, California, on 
A long time ago. [laughs] 



Jacobson: Did you grow up in Santa Monica? 

Moone: Yes, I was pretty much raised in L. A. We moved from Santa 

Monica to Westchester to Palos Verdes. Really, the formative 
years- -from eighth grade onwere in Falos Verdes. So it was 
pretty much a beach environment, as you can imagine. 

Jacobson: I've been to Palos Verdes, and it's beautiful. 

Moone: Yes. It's really a pretty area. We lived in a couple of areas 
in Palos Verdes, one in Rolling Hills inside the gated area 
that was real nice. Then we lived in the grove area, a place 
called Via la Selva--a Spanish name that means "by the woods." 
It's appropriately named. 

I finished up school there, and there wasn't a high school 
in Palos Verdes at the time. So I went to El Segundo High 
School. Typically, the kids from Palos Verdes went to Redondo 
High, but it was filled up, so we went to El Segundo- -which was 



1 This symbol (#//) indicates that a tape or segment of a tape has begun 
or ended. For a guide to the tapes, see page 105. 



a great experience. El Segundo had a bunch of younger kids 
coming up, so we were kind of a bridge group; there were two 
hundred of us. For two years the kids from Palos Verdes went 
to El Segundo High School. Then Palos Verdes had another bunch 
of kids of high school age, and they went to Narbon High School 
for a couple of years. Then Palos Verdes High School came 
along. Now there are three high schools up there. 

Jacobson: Did you take a bus to get to school? 

Moone: We drove; we had a friend who drove. In those days it didn't 
take too long; it was only about twenty minutes. Traffic 
wasn't what it is today. Today it would take you an hour 
[laughs]. Oh, it's still only probably about thirty minutes. 
But it was only a twenty minute drive in those days, and 
sometimes we made it in fifteen [laughs]. 

I was a pretty typical high school kid, I think. I had 
pretty broad interests, was sports -minded, chased girls (never 
caught any) . 

Jacobson: I see all those sports trophies up there behind your desk-- 
football from UCLA. 



University Education 



Moone: I went on to the University of Pennsylvania out of El Segundo. 
I had a semi -jock and semi -need scholarship. I was an only 
child, and my dad was a pilot for American Airlines. My dad 
went to UCLA, so I was kind of red-hot for UCLA. But I got 
this interest through an old girlfriend's father and decided to 
try an Ivy League school. It was a good experience. It was 
really the first time that I was confronted with making a tough 
decision, and that was to stay and do something you didn't 
like, but to sort of gut it out. Or to say, "This isn't for 
me," and go to UCLA. I made that decision, and it was a very 
good one, I think. It wasn't an easy one. 

I went back and finished up at UCLA. There I majored in 
"fraternity" as a Fiji, and school was kind of secondary. I 
had a great time in college. I graduated in the top 80 percent 
of my class [laughs]. I was in the old business school; I was 
in the next -to -the -last class to finish up in the UCLA business 
school as an undergrad. Then it became a graduate program. 



Jacobson: Was the marketing program at UCLA a relatively new one when you 
started? 

Moone: No, the school had been long established. I'd say the strength 
of the school was originally accounting- -and I say that as a 
differentiation from finance. Then it moved to computers. I 
think the computer sciences as they relate to business was 
probably the strength when I was there. Marketing was a solid 
second, and actually all the disciplines within the business 
majors are within a difference of two or three courses for your 
maj or . 



An Early Role Model 



Moone: I had always wanted sales, and had always wanted marketing, and 
was very strong in that direction from when I was thirteen or 
fourteen years old. I was influenced heavily by a neighbor, 
Mar Nelson, who was the sales manager of a company, and I just 
loved everything he did [laughs]. I wanted to do what he did; 
you know, you set role models for yourself. 

Jacobson: Did you have jobs in high school that encouraged you to develop 
that interest? 



Moone: No. I had jobs from him that were kind of different. As an 
example, I took care of his boat. He had a fifty- foot yacht, 
and I had a key to it and total use of it. 1 did all the work 
on it: I recaulked the teak decks and did all the painting and 
all the hull work. The fun part about that was that I knew 
absolutely nothing about it. He'd just say, "You're smart, 
kid; you go figure it out and send me the bill if you need 
anything. " 

Then I shingled his house. He had a really nice house, 
and he said, "Shingle the roof for me." I went down to the 
library and found out how to shingle and bought all the 
shingles. That was kind of his style, letting people do things 
and becoming responsible for them. That was a really great 
lesson in life that I learned from him. And I was motivated 
because of the way he comported himself, I think, in a lot of 
respects. 

Jacobson: Was he a person you could go to for advice if you needed it? 



Moone: I didn't. It was just a fun association. He became almost a 

friend. He liked what I did, and I liked the things he did, so 
it was a neat thing. He was a good neighbor. 

I also worked at his company in the summer , which was 
called Barksdale Valves. Then I worked in the oil fields later 
on as a roustabout. 



Development of Interest in Wine 



Moone: During the year I concentrated on high school sports --and 

surfing, partying; pretty much the beach environment. In fact, 
that's where I really began to drink good wine, in high school. 
I had a friend, Randy Johnson, who drank good wines, and that's 
when I started. I used to drink Almaden Grey Riesling. It was 
$1.49 and seven cents tax. 

I used to have a Urago ten- speed bike, and we used to 
bicycle a long ways. We'd go to Malibu and San Diego, and 
places like that. We'd take a backpack and just go down to the 
beach or something. We'd always take some sandwiches and a 
good bottle of wine. It just became a kind of a lifestyle 
early on. As I look back, it was probably a very European kind 
of wine environment that I was raised in. 

Then at UCLA I became the social chairman of our 
fraternity, and there I booked rock and roll bands. I was also 
the chef in our fraternity for a while, and also cleaned pots 
and pans [laughs]. Then I began making a lot of money booking 
rock and roll bands. I had eleven bands, and had some really 
good performers: Richard Berry, who wrote "Louie, Louie". We 
had Jan and Dean in our fraternity (Jan Berry and Dean 
Torrance) , so I used to book themnot too much, but once in a 
while. Then the Red Jackets, their backup band, I booked a 
couple of times. I had Bruce Johnson, who is one of the Beach 
Boys. I had him under contract for two years. He was a 
fabulous entertainer. I had Don Julian and the Meadowlarks , 
who did "Cherry Pie." He recorded that. 

Anyway, it was a neat environment to get carried away in. 
[laughs] 

Jacobson: Did you try to introduce wine to the fraternity members? 



Moone: Yes, I did, as a matter of fact. I was the first one to bring 
wine to parties. Of course, most people put 7 -Up in it, and 
they drank Red Mountain, which was the big, popular Gallo wine 
then. Cucamonga Village was the smooth Zinfandel, and I 
brought that in. The first wine coolers of that era we brought 
in, and also good wines for occasions. 

Jacobson: Did that ever surpass beer consumption? 

Moone: I don't think so, no. They consumed an awful lot of beer. I 
personally can't drink a lot of beer. I drink a can, and I'm 
just bloated. There were times when I went way beyond that, 
but generally- -well, sometimes you drink in college. 

I joined Procter & Gamble right out of college. But when 
I was about twenty- two, I had about a two hundred-bottle wine 
cellar. I'm a very outer-driven person; I'm not inner-driven 
in this sense. I'd never care to tell you where the seeds were 
grown or anything like that; I just enjoyed a nice bottle of 
wine with a meal. 

Jacobson: Did your family have an interest in wine? 

Moone: No, they were the martini crowd, and I never liked that. So I 
was into wine , as you can see , at a very early age . I was 
basically an L. A. wine buff. Someone I met would have a nice 
bottle of wine, and I'd ask what it was and go buy a case or a 
couple of bottles. So I liked what everybody else liked. 
Generally it was pretty good stuff. 

Then I found out later on, after being in the business, 
that I'd bought some real junk [laughs] - -about half of it. It 
was stuff with my name on the label (Windsor Vineyards) , but 
that's how you start. 



Wine Collecting 



Jacobson: In those early stages, did you ever become systematic in how 
you selected wines? 

Moone: At the end I did. I became a much better wine person at about 
the age of twenty-eight or twenty-nine. I had moved then from 
Cincinnati to Venezuela, and I began not liking my wine cellar 
because it was full of one bottle of this, and one bottle of 



that, each only good enough to drink with God. I couldn't 
drink the first bottle; I just couldn't do it. I became a 
collector, and I wasn't enjoying my drinking. That was 
terrible, so I said I had to buy more of a wine that I liked. 
I just said to myself, "I'll only spend a hundred dollars," 
which was my wine purchase. I wouldn't just go out and buy a 
five dollar bottle; if I really liked it, I was going to spend. 
That made me make a better decision, and it usually got me one 
or two cases of wine. 



Jacobson: 



Then if my mother-in-law came over for dinner, I wouldn't 
sit there and suffer. Because I wasn't even going to have any 
wine if she was there. But now I would have enough and could 
say, "Well, I'll have it, and she can have a glass --so what? 
I've got three cases." 

I began to age wines out and really follow them and enjoy 
them. That made wine much more enjoyable to me. Basically, I 
really like to cellar red wines- -Cabernet Sauvignons . That's 
what really started my cellar becoming a much better cellar. 
It made me a better purchaser, because I was sort of 
researching the fact that I couldn't get them all, so if I'm 
going to spend a hundred dollars , I may as well get one I 
really like. Then I became a little more inward- driven at that 
time on my wine habits. I pretty much still follow that. In 
fact, I buy all by the case now. So that made me a better wine 
person, and I have a better cellar because of it. 

Have you ever had any formal training in wine tasting, or taken 
courses? 



Mo one : 



Not until I went to work in the wine business. 



Jacobson: Would you casually talk about wines with friends? 

Moone: Yes, we did. We talked at dinners. We'd go to restaurants, 

and I usually ended up ordering the wine because people thought 
I knew something about it. I knew a lot about California wines 
and very little about European wines. I followed California 
wines. I came up to Napa a couple of times and bought wine up 
here. In fact, when I left Procter & Gamble, one of the 
reasons I joined Beringer at the time was that they also 
marketed imports and I could learn something about imported 
wine while I was here learning more about California wines . 

Jacobson: Was there an evolution in your tastes in wine from when you 
started? 



Moone : 



Jacobson: 
Moone : 



No, I've always had a really great palate. [laughs] I've 
always trusted my palate. I've always overrated my palate, I 
guess [laughs]. I know what I like, and I think I've been a 
pretty good judge of good wines all along. And I'm very good 
on red wines. Not quite as good on white wines. 

Do you tend to have more red in your collection? 

My cellar is almost all red wine. I drink whites and cellar 
reds. I'm always out of white wines, like everybody else. 



Fraternity Life: Preparation for the World of Business 



Jacobson: Let me ask you a little bit more about your marketing studies 
at UCLA. Did those prepare you well for entering the business 
world? 

Moone: Oh, [pause] I don't know. If you asked me what I learned in 
college that would be most meaningful to my career, certainly 
the fraternity would be the place I would start, before the 
business school. 

Jacobson: That's interesting. 

Moone: I think the business school is a good one, and you do learn 
some techniques . Certainly you learn the terminology of 
business and those kinds of things. You have to be grounded in 
economics and accounting. Those are things that we use as our 
daily tools. In marketing you have to know about types of 
advertising and what they do. But to say you learned something 
in that marketing class that's helped you in what you've done 
in marketing at Beringer- -no, it doesn't do that. 

In terms of the fraternity, I think there you learn peer 
group leadership , where a pretty sharp group of a hundred 
decide to put you in charge of something. Then you have to 
turn around and make them do it. I always said if I could get 
a bunch of football players up on Sunday morning to clean up 
after a party, for free, I could get them to do something in 
business for money easily. I think that kind of motivation is 
what you learn. 

And you come to grips with every kind of human problem in 
four years in a fraternity house that you would encounter in 



life. So that was a tremendous learning experience for me. 
would say that was number one on the list. 



Interest in Cooking 



Jacobson: What about your stint as chef for the fraternity? 

Moone: Well, our cook quit and we didn't have one. I've always been a 
pretty good cook, so I said I'd cook all our breakfasts and our 
Friday night meals. We had different people doing different 
nights. So I did every breakfast. I got up at six o'clock 
every morning, and from six to nine o'clock did individual 
breakfasts for everybody. 

Jacobson: My goodness! 

Moone: Yes. Sort of a fry cook. I used to be a fry cook at one time 
in a restaurant- -a short order chef --as a summer job. That was 
fun. 

Jacobson: They were sure lucky to have you. 

Moone: And I enjoyed it. I saw everybody in the morning. In fact, we 
had better turnouts in the morning when I was cooking than we 
did when the chef was there. Everybody came down just to laugh 
at me. That was fun. 

Jacobson: As your interest in wine developed, did you also refine your 
cooking? 

Moone: Oh, yes. I always had a great interest in cooking. I haven't 
cooked as much lately because of all the wonderful things we 
have here at Beringer and at Chateau Souverain, and just 
entertaining and being around the country. But I really enjoy 
cooking. I think anybody who really cellars wine probably 
likes to cook. They almost go together. I've become a better 
chef since those [college] days. 

I was an only child, and my mom worked and my dad flew a 
lot, so I always cooked a lot of my own meals from when I was 
eight or nine years old. I always made my own breakfast and 
things, so I was pretty independent. I think that got me 
started, anyway. 



II CAREER AT Procter & GAMBLE 



Sales Responsibilities 



Jacobson: Your first job out of college was with Procter & Gamble? 

Moone : I got it through the placement office at UCLA. I went to work 
for them in 1962, right out of college. I went to Bakersfield, 
California, as a salesperson for Kern County. I was there 
about two years , maybe a little less , and then I became what 
they called office head salesman. I got a twenty- five dollar 
raise, and they took my car away from me. I was absolutely 
devastated. I almost quit, I got so mad. 

I worked for a wonderful guy there named Ray Kidel. Ray 
hired me out of college. He was the district manager for the 
L. A. area in packaged soap, a real old-time Texan and a real 
influence on my life. He was a wonderful manager who settled 
me down through some early immature times . Then I became what 
they called a unit sales manager and had five or six sales 
people working for me. Actually, it was funny--! was back 
hiring UCLA graduates; I did all the interviewing at UCLA. Two 
years after I graduated, I was hiring Procter & Gamble people 
out of there . 

P & G gives you a lot of responsibility early- -a lot of 
dollar sales and people responsibility. You really learn how 
to operate a sales group at an early age . I ran all of the 
units in L. A. There were four of them, and I ran all of those 
at one time or another. I called on all the large accounts. 
Ralph's Grocery Company was the largest one at the end. 



10 



RecruitinE Activities 



Moone: Then in 1969 I moved into recruiting. What they did was that 
when they moved you out of a first- line management position, 
they put you in a staff position for some more exposure and 
probably some more evaluation, too. From there I began as what 
was called a regional recruiter; it's kind of a guinea pig job. 
Procter & Gamble had had up until that time central recruiting, 
where they did recruiting at all colleges centrally, with a lot 
of sales managers (like I did at UCLA) calling on the college 
campuses. They hired five or six hundred college students a 
year for the sales organization. 

The idea was to be able to hire not only all the college 
people in the area and not travel so much, but also to hire 
what we called the career salespeople who would join the 
company and not be a college person to move ahead in the 
business. That was real exciting. I got to open an office and 
write the manual on the position. In fact, I did so good on it 
that they made me manager of recruiting for P & G. So I went 
back and ran the whole company. 

I set up those offices in Atlanta, Cincinnati, New York, 
and of course replaced myself in Los Angeles . At the same time 
I talked Procter & Gamble into having manpower planning, of all 
things, put into effect. We reduced their turnover nationally. 
They were hiring five hundred college people to promote sixty a 
year. So every time they would promote one, ten would leave in 
each district [laughs]. The turnover was outrageous. I 
thought each district of thirty people should only have three 
development people and twenty- seven good career salespeople. 
If they found someone that they wanted to hire, then they ought 
to fire one or two of the other three . In other words , be 
honest with the three you had; don't over-promise everybody. 

So we put some guidelines on the districts, and that was a 
real sales difficulty because we were stepping on the sacred 
grounds of old district managers. But we sold that concept and 
reduced the turnover by over 50 percent, which saved them 
millions of dollars. I wrote all the manuals. Actually, it 
was very good for their business. 



11 



It was really a fun job. I studied a lot about [David] 
McClelland at Harvard on achievement. 1 Looking back on my 
career, I think of Bill Coleman as an important influence. My 
immediate boss, Wally Anderson, had a stroke and was wounded 
and never came back to work. They didn't want to replace him, 
so I reported to a higher level --to what they called eleventh 
floor. I reported directly to Bill Coleman, who was the v. p. 
of sales. He gave me a tremendous ear, and was someone who 
wanted to do a lot of the things that I wanted to do . 

We stopped all the unit managers calling on the college 
campuses, because I convinced them that it was a difficult job, 
a job for a professional. We instituted hiring minorities and 
women; we hired the first women. Part of my job was to put on 
seminars around the country on how to do that, and the fact 
that it could really work [laughs]. We did all that, and it 
was a great part of the job. 



Traits of a Good Salesperson 



Jacobson: Back when you were recruiting, what kinds of traits would you 
look for in a salesman? 

Moone: If it was a career person, it would be the fact that they were 
stepping up in their job; that it wasn't a step down or a 
lateral move. As an example, a person who was selling Coca- 
Cola off a truck could have been a great personal salesperson, 
maybe with a year of college or something like that. But the 
physical part of the job- -they make twenty calls a day, they 
have to take the Coke off the truck and schlep it in and stack 
it in the stores. You put a person like that in a nice car, in 
a coat and tie, and instead of twenty stops he makes fourteen 
or twelve a day and just sells. Plus you get paid more money 
and all these wonderful benefits. It's a tremendous step 
ahead. 

We would bring them in and tell them right out that we 
were hiring people for this job, and while you might get 
promoted, the chances are you won't. You're competing against 
people who are really geared to move ahead. You have a chance, 
but if you come in here solely for that, put it out of your 



'See also pages 12-13, 25-26. 



12 



mind. A lot of people said no, they didn't want the job, and 
six months later they would call back and say, "I really do 
want this job, and that is what I want. I've always told 
myself I needed to move ahead, but I really don't. I'm happy, 
I'll send my kids to college, buy a new car once in a while, 
live right here and not move. That's me." 

We really made them talk about what they wanted to do. On 
the other hand, in the college person you look for an 
achievement-oriented person- -there' s that word I told you about 
from McClelland earlier 1 - -who had demonstrated in the past that 
they could succeed in leadership positions recognized by their 
peer group, and who had a demonstrated pattern of success in 
their lives. 

Jacobson: Was there any particular kind of background that these people 
would usually have? 

Moone: They were UCLA Fijis. [laughs] 
Jacobson: Were they athletes, or--? 

Moone: A lot of them were. Sales people are competitive, so both men 
and women were competitive. The first gal I hired for P & G, 
ever, in sales, was a pistol- shooting champion for the 
University of Mississippi. She was very competitive and 
measured herself --and liked to be measured that way. I think 
in sales, people like to know what occurred during the day; did 
I win or lose? Did I meet my goals? How many calls did I 
make, how many did it sell? What happened, where am I versus 
my quota? It's very much like sports. So generally they are 
people who like athletics and competition. Show me a 
salesperson who doesn't like to compete, and I'll show you a 
loser. [laughs] 

Then, in terms of your management people, they may not be 
the best salespeople. They are certainly people that their 
peer group has put into a leadership position throughout their 
lives. I don't see many people becoming good managers who 
haven't been in a leadership position somewhere, and it can be 
anywhere --church, school offices, fraternities and sororities 
are good ones . 



1 See pages 10-11. 



13 



At Procter & Gamble, we looked not only for the person who 
was in that position, but what did he do in that position? 
What did you do- -not what did we do- -that made you a better 
president than the president before you? What was your 
contribution? What did you get people to do? What were your 
goals? How did you do against those goals? How did you get 
people to do what you wanted? Who was your biggest help? So 
we really found out what they brought to the party. That was a 
criterion. The best predictor of a person's future is their 
past. It's that simple. 



Affirmative Action 



Jacobson: Before I asked you that question, you were talking about 

introducing the idea of hiring women and minorities. Did that 
encounter resistance? 

Moone: Sure, it did. Yes. P & G was a real WASP, male company. Even 
the idea of hiring Jews or anyone like that was, "Can we do 
that?" [laughs] I mean, "Oh, horrors!" Blacks were a 
problem. I had to do all the EEOC guidelines at the time, and 
there was a lot of government pushing to get people going, too. 
But it was the law of the land, and P & G had to obey the law 
of the land and they weren't. 

We set up goals and timetables, and I did all that with 
the two departments that ran us. That was interesting in 
itself. And we did a good job. Once Procter & Gamble made up 
its mind they would be a good citizen, they did it as good as 
anyone could in the United States. 



Moone: So I went out with Vate Levatus Powell, a great guy, and 

another fellow, and we went all around the country together. 
That was fabulous . That was good learning for me . We had 
some tragedies- -people who didn't work out; we gave them the 
company car and they stole it. We had those kinds of things 
[laughs], but overall we really found some very talented 
people. A lot of them went on and became managers at P & G- 
men and women. I've hired so many, I've lost track of them 
all. But a lot of them write me once in a while, and they've 
moved right on up the ranks. It was fun. 



14 



First Contact with Richard Maher 



Jacobson: While you were with P & G, you came into contact with Dick 
[Richard] Maher, did you not? 

Moone: Not there. It's a funny story, how I met Dick. I had joined 

Wine World in 1973, and Dick came along in about '75 or '76. I 
was being interviewed at the time by my next door neighbor, to 
become the region sales manager for Heublein at Inglenook. I 
didn't even know that his boss --this was a guy named Ted 
Isenberg, a great guy at Heublein- -was Dick. We heard some 
rumors one day that our president was being dismissed and we 
would get a new president. I heard that on Friday. I came in 
on Monday, and this guy walks in my office, sits down, and 
says, "I'm Dick Maher, the new president." I didn't know who 
he was at all. He asked, "Are you going to take that job at 
Heublein, or aren't you?" 

I was shocked! Who was this guy, and how did he know 
this? [laughs] I asked how he knew about that, and he said, 
"I'm Ted Isenberg's boss, and I'm your new president here." I 
said, "Oh." I said, "I'll tell you what I'll do. I'll stick 
around a couple of years and see how it goes." He said, 
"That's all I want. See you later." That's how we met. 

At the time, Bill Ryan was national sales manager. He 
brought Bill in to become national sales manager after a couple 
of weeks, also from Heublein. So I worked for Bill Ryan for 
the first couple of years, and then Bill worked for me when I 
became national sales manager. Then about six years ago I 
became president, when Dick left. That was in January of 1984. 

Jacobson: I thought for some reason that the two of you had worked 
together at Procter & Gamble. 

Moone: Well, he had been at Procter & Gamble. He was a brand manager 
on Comet and was there about a year. He wasn't there very 
long. So, while we're the same vintage, I didn't run across 
him. 



15 



III BERINGER VINEYARDS AND WINE WORLD, INC., 1973-1989 



Joining the Company 



Jacobson: How did you make the transition, then, from Procter & Gamble to 
Beringer? 

Moone: Gallo had tried to hire me through the years, mostly I think 
because of my recruiting and training background, which they 
needed help in. They had put some great offers out. Actually, 
I went down to Venezuela after my recruiting experience and 
spent a couple of years there. I was coming back to 
Philadelphia and decided to quit, because I didn't want to be 
in Philadelphia again. I had quit the University of 
Pennsylvania, and I said I wasn't going back. So I thought I'd 
better find a job. 

I really didn't do it too intelligently. My wife's 
sister, Joan, lived in Berkeley. She was married to a Japanese 
guy named Eliot Horikoshi, and they had a couple of kids. I 
said, "Wouldn't it be nice to have the sisters together? I've 
been moving around quite a bit, and we could establish family 
in this area, and we could spend time together. Plus, the wine 
business is out there." Gallo had tried to hire me. "So what 
I'll do is move there, find a house I like, get all set up, and 
then I'll go look for a job." 

So I did. I went out and bought a house in Round Hill, a 
wonderful area with a golf course , and I paid too much for it 
[laughs]. I was unemployed and I bought this nice house! I 
moved the whole family out here, and then I just went knocking 
on doors . I called up the Mondavis , the Beringers , the Krugs , 
Beaulieu, and all the people in the business. The Beringer 
people said, "Let's go to work. We need a guy like you." 



16 



The fun part about getting hired, by the way, was that I 
was hired by a guy named Tom Aquilano, who was the treasurer, 
and Bob Bras, who was president. Bob Bras was the former 
Nescafe brand manager, who knew absolutely nothing about wine. 
He made some horrible deals, but was responsible for some of 
the early impetus to get the company into the wine business. 
He was Puerto Rican, which I did not know. 

At my first interview, when he noticed I had been in 
Venezuelawe had our first interview in Spanish [laughs]. Not 
only did I not know a whole lot about wine, just being a wine 
buff, but I didn't know all the terminology, other than what I 
had ordered in restaurants and so forth. So my first interview 
was pretty stressful. It was an hour or an hour and a half of 
all Spanish. I was pretty good in Spanish in my area, but not 
in wine or some other areas. And Puerto Ricans speak so fast, 
like the Cubans. I can communicate with the Colombians and the 
Peruvians and the Chilenos, who really speak it nice and slow. 
But that was fun. 



Early Responsibilities and Training 



Moone: I started off as a district manager in San Francisco. 
Jacobson: What were your responsibilities? 

Moone: Well, I had to sell the wine they made [laughs]. We owned a 
distributorship at the time, called Wine Distributors, on 
Fourth Street at Brannan. There was a national sales manager 
by the name of Bob Mason, and the fellow who ran the 
distributorship was Claire Prendergast. I guess I would be the 
next in line at that time. Most of our business was pretty 
localized in the San Francisco area. While Nestle had just 
bought the winery and we had a large import portfolio called 
C & B Vintage Cellars, the total company sales in 1973 were 
under $3 million dollars for all brands. I'm going to guess 
that $2.5 million of it was right here in San Francisco. It 
was a pretty small company with a lot of problems. 

I knew the problems going in, because Beringer wasn't one 
of the wineries that participated in the wine boom coming out 
of the sixties. I think it was the only winery that lost 
volume [laughs]. But you could see the tremendous potential of 



17 



Jacobson: 



Moone : 



the place, and the fact that they had some great vineyards made 
me think they ought to be able to make some great wines. 

I had signed up also to learn the imports, as I said 
earlier; I really had a desire to ^earn about imports --go to 
Europe and learn about the great vineyards of France, Italy, 
and Spain. 

Anyway, the responsibilities were basically for 
Sacramento, Fresno, everything in Nevada, and that was about 
it. The company had no clue on how to market or sell wines. 
It really didn't. There was a lot of chaos at the time, and 
they were making more than they were selling. Los Hermanos 
brand was the big push at the time, and the Beringer wines were 
about average . 

At that point, early on, did you undergo any more formal wine 
training? 

Yes, I spent two months in the vineyards. I picked grapes and 
got to use my Spanish, which was fun because the vineyard 
workers really thought I was from Spain. I made wine here at 
the winery. So I had a couple of months of pretty intensive 
trainingyou know, really getting my hands dirty at all phases 
of the business. 



Jacobson: Was that something that all the salespeople did? 

Moone: Yes. We still do that. In fact, not just salespeople- - 
everybody. 



Key Personnel 



Moone: We really have a pretty good group of people who have been here 
in the battle a long time. The core group of people who were 
here are significant to the progress of our company, because 
we've all been together so long; we communicate well together 
because we've been together so long. That's really the 
strength of this company. 

Jacobson: Who makes up that core group? 

Moone: It's quite a list. Let's see if I can't take them in some 
order: Guy Kay, who runs our production and who ran our 



18 



production at that time. He literally went from all phases of 
production, from our small original winery across the street to 
moving to a wonderful new winery- -in fact, designing this 
winery. He's also been a St. Helena city councilman, and is 
now on the planning commission of Napa County. So he's our 
political ombudsman for the company. He was a Nestle employee 
from before, who ran milk factories. He came out here in the 
wine business, and has just been phenomenal. 

We have Bob Steinhauer, who has been with us a little over 
eleven years now. He was manager for all Beaulieu vineyards 
for about eight years under [Andre] Tchelistcheff , and then he 
came here . One of the real turning points in our company has 
been our vineyards. We had young vineyards when I joined the 
company, and they're now just reaching their tenth and eleventh 
leaf in a lot of cases. Bob's matching of the vineyards to the 
soil has been incredible. Plus, as we'll get into later on, 
all our new ventures at all our vineyards have been 
spectacular. We've come from about eight hundred acres to now 
farming six thousand acres. So we're the largest premium 
landholder in the state by quite a margin. Bob's been, 
obviously, a real integral part in this; we don't do anything 
without Bob stepping up to the plate and saying we can do it or 
want to do it. So he's a key player, and that really impacts 
the quality of all our wineries, obviously. 1 

Then, of course, there was Myron Nightingale, who was here 
and you interviewed. 2 While Myron was a good journeyman 
winemaker, I think our marketing brought a lot to bear on Myron 
to make better wines. That started with Jim Tonjum. Jim's 
been our Beringer brand manager, and then moved on up to the 
v. p. of marketing. When I came in as president I made him 
v. p. of marketing and sales. I wanted to bridge the gap from 
me to sales; I didn't want to have sales report to me right 
after being in sales. Too, it was great having your marketing 
guy get out and see the world [laughs]. That makes them better 
marketing people. 

Jim is phenomenal. He's a Harvard Business School grad 
who's been with Heublein before, and has a tremendous insight 



1 See also page 41. 

2 Myron S. Nightingale, Making Wine in California. 1944-1987. an oral 
history interview conducted 1987, Regional Oral History Office, The Bancroft 
Library, University of California, Berkeley, 1988. 



19 



into what is quality at the extreme levels. I think he's the 
best premium marketing mind in the wine business. 1 That goes 
for everything- -packaging, labeling, knowing the consumer. We 
made a lot of tough choices along the way, too. I remember one 
year, as an example, we gave up all our advertising budgets to 
buy French barrels. Those kinds of decisions are tough, but 
they're the right ones. They're longer-term decisions. 

Then Walter Klenz was our v. p. of finance. Actually, 
Walter was a marketing person who did our C & B Vintage Cellars 
marketing, ran the Beringer brand as a brand manager, and then 
moved into finance; he has a financial background. Then, when 
I became president, I put Walt in charge of all the operations. 
In terms of bottling, Guy Kay reports to Walter, as an example. 
Quality control- -although it's a winemaking function in this 
business, I don't want the winemakers to have their own quality 
control; I want to have someone else check on that, so it's a 
checks and balances situation. 

Then all the new facilities, including the winemakers, 
report to Walter. And all the computer personnel, and at one 
time the personnel department reported to Walt. I spun that 
off and had them report to me about two years ago , as the 
company grew to a lot more people . I wanted to have more input 
directly into the personnel function. So Walt's got a 
tremendous background and does all our bulk wine purchases, all 
our acquisition analysis, and all the accounting functions. 

Ed Sbragia, who's the Beringer winemaker, reports to me. 
Ed has been a real stalwart in winemaking. He made our first 
reserve wines under Myron, without a whole lot of input. That 
first wine was a 1977 Private Reserve Cabernet. I mean, he 
made that back in the early seventies. Ed's been with us since 
then, and he's a phenomenal winemaker, very talented. He 
graduated from Fresno State. 

So we have a real deep, deep core group. Bill Ryan, whom 
I mentioned before, has been here. He runs all our export 
businesses, the Rhine House, and develops our training programs 
for us now. He used to be national sales manager and has 
thousands of friends around the country. 

Dick Wallingford has been with us now about seven or eight 
years as a marketing manager, and now runs our national 



1 See also pages 46-47. 



20 



accounts. I could go on and on. Tom Peterson's the winemaker 
over at Chateau Souverain, and Chuck [Charles] Ortman is now 
the winemaker at Meridian. So we have a really great, great, 
deep, deep group that's experienced- -and experienced here. I'd 
say we're not only good, we're deep. Jim Biggar, who runs all 
the Nestle businesses, called us the best-managed company he 
has. And he says that not just here, but in front of all the 
companies. We're a high quality group that's really done a 
good job. 

In wine, you know, it's not a business where you have any 
patents; anybody can squeeze a grape and make a bottle of wine. 
So the only thing that really makes any difference is the 
people. That's all it is. You must have skilled people at 
every position, and they've got to be really dedicated. It's 
real hard work, looking at thousands of details, et cetera, to 
make a good competitive bottle of wine. I think our wines 
today are tremendous. I think we're making some of the best 
wines in the world. And the reviews show it. Of course, I'm 
not biased! 



Marketing Challenges in the Early Seventies 



Jacobson: 



Moone : 



When you first came in as district manager for San Francisco, 
there were difficulties marketing the wine. What were some of 
the challenges? 

The first thing at the time was that they were marketing some 
Los Hennanos products with Beringer on the label. They had 
just started doing that because Safeway had requested it. 
Being a Procter & Gamble person, I stopped that. I think each 
brand should stand on its own, and it either succeeds or fails 
because of its own merits. I think that was a significant 
contribution at the time, because Beringer could have easily 
taken a short cut at the time to have success as a jug wine. 
It would have become an Almaden or an Inglenook jug wine, and 
I've always been convinced that it should only be a great Napa 
Valley, cork vintage, 750 milliliter, good bottle of wine. I 
don't think you can tell people it's a Cadillac and a Chevy. 
You've got to just be the Cadillac, and make the Chevy the 
Chevy. 

That was a real good decision, and we did that at the 
time. It was painful. We got thrown out of some accounts. 



21 



Jacobson: Did you have trouble keeping the supermarket accounts? 

Moone : We did, because Beringer wasn't that established at the time, 
and it wasn't that great an item. Los Hermanos is what they 
wanted, and they wanted Beringer on it. They wanted us to be 
selling like Almaden and Sebastian! and Inglenook. We said we 
weren't going to do that. That took a certain amount of 
resolve, but it was a good, long-term decision. 

We had some good wines at the time. The first good wine 
we had was the 1970 Cabernet Sauvignon. It was a pretty good 
one for us. We'd talk about one of the great wines, and the 
rest were "B's" and "C's," and a few "D's," I'm sure. There 
were things like Barenblut and Traubingold- -some horrible 
wines. Chablis, burgundy, and rose were big sellers, and they 
just didn't have the trappings of all the things that you 
wanted that were premium. 



Richard Maher's Contributions as President 



Moone: I worked for Dick Maher for almost seven years in there, and 
when you look back and ask what Dick's contributions were, he 
made a couple of contributions that were significant. One was 
that he got rid of some of the vineyard contracts that we had, 
that Bob Bras had signed up. The world's supply of Malvasia 
Bianca was one of our wines [laughs]. Not only did we have a 
lot of it, we paid something like eight hundred dollars a ton 
for it when it wasn't worth a hundred. My daughter wouldn't 
have made a contract that bad. We lived up to that contract 
and lived through it, and got rid of all that wine- -sold it at 
a loss. He had bought tons of imported Chateaus, and committed 
to great quantities for years. Dick convinced Nestle to dump 
all that and write down $7-8 million in losses. 

Once those things were righted, it set the stage for me to 
come in and really pay attention to Beringer. Of course, Dick 
spent a lot of time on Los Hermanos, driving it, I guess, for 
cash reasons. Basically, I think my main contribution here 
would be the emphasis on Beringer and its quality, and getting 
rid of the wines that didn't meet our margin requirements and 
didn't meet our company goals. But I guess that's stepping 
ahead a little. 



22 



Pricing Philosophy 



Jacobson: About the time you came to Beringer in the early seventies, the 
price of wine, industry-wide, was escalating. 

Moone: We didn't raise it too much [laughs]. Our philosophy here has 
been to raise prices slowly, over a long period of time, and 
not take what I call capricious increases- -although we could, 
particularly in this market. We've taken a very, very 
conservative viewpoint on price increases. 

Generally, pricing in the wine business has lagged 
inflation by about twenty years, because we're an agricultural 
base, which people tend to forget. So while a lot of our costs 
go up- -labor, glass, packaging, advertising, and all those 
costs- -hopefully we've tried to pay for some of that out of 
increased volume and by making our prices go up enough to cover 
a little bit of those and holding our production costs. 
Because to some degree it's an asset play, too, in the 
business, where your assets are appreciating. If you have a 
factory that makes Tide soap, in thirty years you throw it away 
and build a new one. Whereas in the wine business, in thirty 
years your winery is worth a fortune because it's this 
wonderful old place that people love to see. So in here you 
don't throw the factory away. 

So you really create value. And, of course, the vineyards 
go up in value a lot- -hopefully , if you buy them right. There 
are a lot of different ways to measure how you succeed in the 
wine business on a profit basis. 



Buildine National Sales 



Moone: I can go back to some early experiences. I remember, after 

being at Procter & Gamble and coming here, being in shock over 
peoples' backgrounds; no knock on them, but they just hadn't 
been around what I'd call a good, disciplined sales 
organization with someone setting the standard for hiring the 
right people. I had always been a real team player--! still 
am- -in the sense that I had never before done anything 
outlandish on my own, like tell somebody I am going to take 
over in Oregon, Washington, and Idaho because nobody's up 
there, and I think we can do some business. "Oh, okay, go 



23 



ahead." In fact, I did that. I fired our broker and put a 
person up there and colonized the area myself on several trips. 

Then I came back and told them that I used to live in 
L. A., and you could see that if the company wasn't successful 
in L. A., it wasn't going to be successful. So I went in and 
told Bob Mason, "I'm going to take over L. A.; we're going to 
go down there, and you're going to give me that." He said, 
"Okay." [laughs] I went down there, and there were twelve 
salespeople employed there, if you can believe that. I fired 
all twelve of them the day I got there. They were just 
horrible. I put the whole thing together, piece by piece, and 
built it up. I appointed new distributors, got all the old 
wine inventories out and got all the fresh stuff in, and 
started from scratch. 

So there were some tough times in there, and some things 
you'd never, never do. Then they gave me Chicago. There was a 
fellow named Knight Fee, who was kind of my counterpart in the 
East- -another P & G guy. Knight was an interesting guy. 
Eventually, in about a year, he was asked to go find something 
more entertaining [laughs], and I took over the whole country. 
I was very imperial, I guess [laughs], but it all worked 
somehow. 

I ran the East. I was national sales manager and acting 
Eastern region sales manager at the time, because I wanted to 
get to know the area. So I ran all that for a year myself, and 
then appointed a person to run the Eastern region and build 
that all up. 



Relationship with Distributors 



Jacobson: Were the qualities that you looked for in distributors or sales 
people different from what you looked for at P & G? 

Moone: Well, we didn't have distributors at P & G. They were new to 
me. The philosophy we've always had, and that I had early on, 
with distributors, which I think is a good one, is that they're 
our biggest asset. They're our partners. People would always 
ask, "How's business?" I would say, "Where?" If I have a very 
good rep and a very good distributor, I have a very good brand. 
Where I don't have those two things, we don't have a good 
brand . 



24 



We never moved distributors capriciously. I don't think I 
moved more than two or three sales managers a year out of a 
hundred. Even if they went down- -maybe the market went down, 
or maybe somebody did a promotion that we didn't measure up to, 
or maybe they'd get better the next year. We'd tell them that 
we weren't happy, but we wouldn't just change them. That has 
really paid off. Our distributors know now that we're with 
them, and we're real solid with them. They are truly our 
partners. We have a relationship that's almost like they're 
family. We're wine only; we're not one of the big liquor 
people that come in and pound things down their throats and 
say, "You will sell this much wine." and so forth. 

Two, I think we've always said- -I know I've always said-- 
that a brand has to build it's own strength. If the brand 
isn't successful, no shoving of wine and inventories is going 
to help it. You do need distribution, you do need a wine list, 
and you do need people to think positively, and an image that's 
set locally, and so forth. All that needs to occur, but the 
fundamentals have to be behind it. I think we've been 
realistic. 

Take, for example, when we bought Chateau Souverain. I'm 
convinced that if a group of people bought that and took it to 
the marketplace, it would have failed. But when we bring it to 
the marketplace, the distributors have such confidence in us 
that they try, and we get a real try. Ergo, it's become 
successful. 

We've also failed. We had French Rabbit, and California 
Royale-- things that just died. We made our share of mistakes, 
but we admit that. We come out and say, "Hey, we tried this, 
and it didn't work here, so we're not going to beat it to 
death. That's the end of it." 

A lot of companies today wonder how to get into the 
distribution system, because it has certainly narrowed. We 
invite our distributors out every year for a golf tournament at 
Silverado. We bring them out individually, and we spend a lot 
of time with them. We know them personally, so when we come 
out with something new, or we have a problem, or we want 
something done- -boy, they're so responsive. That is worth a 
fortune in today's wine business. To them and to us. 



25 



Qualities Desired in Salespeople 



Jacobson: What about the salespeople? Did you look for the same basic 
qualities as you did at P & G? 

Mo one : The same people, sure. I'll give you an example. I hired a 
guy named Dario Margve , who was a West Point grad--tank 
commander, brigade commander of West Point, promoted twice in 
rank. He was president of his high school, captain of the 
basketball team, didn't know a thing about wine. At nine 
months in the business I made him region sales manager in Los 
Angeles. He was there a year and a half, knocked it stupid. I 
brought him up here, and he's now vice-president of the 
company. I'm sure I'll work for him someday. [laughs] I 
mean, that's the caliber of people we have. We bring them in 
and move them fast. We have a lot of people like that. We're 
really deep in good salespeople. 

They would measure up, and in fact I would say pridefully 
that they are as good or better than anything I ever saw at 
Procter & Gamble. They're real good. There are fifty of them 
now. We have blacks, hispanics , women- -all that. We're not 
just good; we're good in every way. 

ft 

Moone: There are two women who come to mind quickly. Janelle Thompson 
is the v. p. of marketing. She runs all the company's 
marketing brands, and she's just sensational. She's been here 
going on six years. She was a brand manager at Clorox. She's 
been a phenomenal input into the company over the years . Linda 
Higgins is our v. p. of sales in Chicago. Women have moved 
along at a really high rate within our company. There are a 
lot more, but those two are at the highest level. 

Jacobson: Achievement -oriented qualities are more important than 
knowledge of wine, then. 

Moone: The achievement factors far outweigh wine. I made two 

decisions. One, I was not going to go hire Procter & Gamble 
people away from Procter & Gamble; I didn't want to burn any 
bridges there, and I left under good circumstances. It would 
have been easy for me to go to somebody that I had recruited 
for them and say, "Gee, come and work for Mike Moone. I 
steered you wrong; this is a better deal," or something. I 
said I really didn't want to do that, so I never have hired a 



26 



person from Procter & Gamble. Some have called me up, and I 
refuse to do it. 

And, two, when I looked at the wine industry at the time, 
I didn't like all the people that I saw in the business. I 
didn't think they had a real high caliber of salespeople out 
there. I said I would rather take the time to train and find 
the people who met our criteria, who we could train. That 
might hurt you in the short term- -but it never did; a smart 
person is going to be smart wherever they are. So give me a 
room full of those, and give me a room full of people who "know 
the business," and I'll own the world with the kind of people 
that I like to hire. 

That's not to say that we haven't hired people with wine 
experience. We found them in various places. Because this 
business is kind of like the movies- -a lot of people work in it 
for nothing, just to get into the business. It's a fun 
business, in that sense. So people come in to you who are just 
wine lovers, and say, "I want to go to work, and I'll do 
anything to work in the wine business." They're wine buffs, 
and they've been with some company but haven't had a good 
opportunity or whatever. So we find a place for them. They've 
been good, too. 

As I run across my mind, our sales manager, Rick Carter, 
was a Gallo person with wine experience. I hired Rick out of 
the distributorship in New York. He was a Los Angeles guy who 
wanted to come back to L. A. 

Our Eastern region manager, Michael Cesario, I found in 
Sacramento at a wine tasting. I hired him and moved him to 
L. A. He's a real wine buff. He was out of college and in the 
wine business a couple of years in Sacramento. I was up there 
touring the Sierra, and I liked what he did in the tasting. I 
said, "Do you want a good job?" He said yes, so we moved him 
to L. A. [laughs] Now he runs the Eastern region. 

Bill Foster was a West Point grad who didn't know anything 
about wine. He now runs our Atlanta region. Gary Jones was a 
terrific wine person of high reputation when we hired him in 
Texas. He was with Franciscan and had a lot of problems 
bumping along, and when Justin Meyer left there he wanted out. 

Jon Biane, our L. A. sales manager, is kind of an 
interesting story. Jon's family, the Biane family, owned a 
winery for years down near Los Angeles, and the winery went 



27 



under. He worked for Chateau Souverain at the time and had 
been trying to go to work for us for two years. I used to get 
a call every month, and a letter, and great follow-up. I had 
hired him from Souverain to us because we finally got an 
opening for him, and then we turned" around and bought 
Souverain. That was funny. So he's certainly got wine 
experience . 

It's kind of a mixed bag. Dario Margve I mentioned 
before. Dick Wallingford, whom we hired, went into marketing 
and now is our national accounts manager. Dick speaks five 
languages, worked for the CIA in Russia, and then became 
manager for the Ben Hogan Golf Company before us. So he didn't 
know anything about wine. Most, I'd say, lean towards not 
having any wine experience. 



Sale of Fontana Candida 



Jacobson: Once you built up the sales force, what were your next moves? 

Moone: I guess that would take us up to when I was just about to 

become president. At the time that I became president [1984], 
the company sales were about $40 million. The profitable brand 
of the company was Fontana Candida Frascati; it sold about a 
hundred thousand cases. Los Hermanos was the next big item; in 
dollars Los Hermanos was bigger. Beringer was still pretty 
small; it might have been a couple hundred thousand cases. 

I remember the sales of our import operation was about 
$20 million, somewhere in that range. So it was about half 
import sales, really, and Los Hermanos was the other part of 
it. The margins were not good, so my decision was to de- 
emphasize Los Hermanos. I sold Fontana Candida in 1986, after 
we'd built it up to about three hundred thousand cases two 
years after I became president. 

Jacobson: Why did you decide to do that? 

Moone: The decision was really made for us, because the company, 

Winefood [Consortium] and the Gruppo Italiano Vini in Italy, 
was sold. It's a very complicated thing, but it was sold 
basically to the group that was owned by the Communists. In 
that mix was Calissano and a lot of winery companies, like 
Banfi and Bolla around the Milano area where the Communists 



28 



Jacobson: 
Mo one : 



were centered- -which are called the "reds" in Italy. The 
"whites," which are the white Christian Democrat Party, were 
down in Rome, near where Fontana is produced, and in Latium. 
In that arena we had a contract which Brown-Foreman didn't know 
about. Brown Foreman markets Bolla. Brown- Foreman always 
wanted Fontana Candida; it'd be a killer item for them, to go 
along with Bolla, because we were always in their hair with 
Fontana Candida. 

So Brown-Foreman went over there and paid $7 million for 
the rights to the brand when the Communist group purchased the 
Gruppo Italiano Vini. By the way, the Communists are very good 
business people in Italy; they're probably the best business 
people over there. They had access to a bank; the Italian 
government finally said they could have a bank. Once they had 
a bank, then they could start buying companies and they were 
rolling. The way they financed the purchase of acquisitions 
was to sell off the worldwide distribution rights. Pretty 
smart. 

But, again, what Brown-Foreman didn't know was that we had 
a contract. The contract we had had a three -year rolling note 
with no performance factors in it, which luckily I put in with 
all our imports. So when they said they would give us $300,000 
for the brand, which on their calculations was what it was 
worth in terms of one year's profit, I said, "No, I want 
$10 million for the brand." It was really a great 
conversation. He asked how I could be serious. Well, we were 
50 percent of Fontana Candida's sales for the world. 

In the conversation I said, "I am going to sell the brand 
for a year and make all the money I want, and the next year I'm 
not going to sell one case. So two years from now, when you 
get your brand, you will have zero business in the U.S., and 
you will have 50 percent of the winery's business not even 
coming into this country." They said, "You wouldn't do that." 
I said, "Then there's no need to talk any more." So I got a 
good price for it. [laughs] It was a wonderful position to be 
in. 

That was a very skillful negotiation. 

Well, they put us in that position. In the meantime, I started 
up our own brand, called Centanni, which is a winery we own in 
Italy now. We went to the Christian Democrats, who really 
didn't want to send their wine to the Communists. They said, 
"Look, we want to give it to you guys." So we've got the best 



29 



quality Frascati in Rome now, and we sell it as Centanni . 
We're up to about 25,000 cases this year. The whole category 
has suffered. I guess Fontana is probably down to a couple 
hundred thousand. The imports have gotten quite a beating in 
the last couple of years. 

We sold Fontana at its peak, and we got right back in the 
business with good quality Frascati grapes. So we'll do well 
long term. That's a successful one. I still would rather have 
had Fontana Candida all this time, but what the heck? If you 
have to sell it, you may as well get some money and start off 
on your own . 1 



Reshapine Product Lines 



Jacobson: At the time that you became president, I take it your 

distribution was much more evenly spread and not all centered 
in San Francisco. 

Moone: Most of the business was West Coast and East Coast. Imports 
were heavily skewed to the East Coast, California wine was 
heavily skewed here to California, and the jug wines were 
selling everywhere. 

In the old days, when you could set the price for your 
wines, Los Hermanos was kind of the premium image wine, like a 
Sebastiani. But it was the same kind of wine that people were 
putting out at a lower price. Ours had a cork in it, and 
everyone else had a screw cap, so everyone said we were a 
better wine. I mean, really! What happened was that alcoholic 
beverage price controls were ruled illegal by the Supreme 
Court, which means that retailers featured the more popular 
brands. Almaden really got a big run-up that year. The people 
who made the screw cap wines started making better wines and 
putting corks in it. So their packaging and appearance were 
confusing to the consumer. 

We weren't niched any more. We were probably operating at 
two dollars a case as a penalty. It was like running a 
Volkswagen through a Mercedes factory, trying to have them make 
it for us --trucking the wine up here and everything; it was 



1 See also pages 55-56. 



30 



crazy. We couldn't buy glass at the price they did or 
anything. We were just getting our brains beat out, so we 
said, "The hell with this. This is not our business. Our 
business is the premium business." 

We really cut out, between Fontana and all the Los 
Hermanos items and some other low- end imports we dropped, in 
excess of $20 million in sales. The $40 million base of what 
we built from was really cut in half. But we started building 
Beringer back, got involved in Chateau Souverain, and now 
Meridian, and introduced Napa Ridge. Today our business is 
over $100 million. It's much better based, good quality, and I 
think we're doing a lot of the right things to merchandise it, 
particularly with food and Beringer and the restaurant with 
Chateau Souverain. 



31 



IV LOS HERMANOS BRAND 



Jacobson: Let's go into each of the divisions in more detail, starting 

with Los Hermanos. When you first came in, it was the primary 
seller and was up until- - 

Moone: It still sells a little bit. Oh, yes, it was up to a million 
cases at that time. Now it's down to about 400,000 or 300,000 
cases . 



Airline Package 



Jacobson: An airline package was introduced in 1976. 

Moone: That idea came through a friend of Dick Maher. Inez McGowan 
had developed that package. It was the little teeny bottle 
that had the glass molded right over the top of it, and then a 
shrink wrap around it . So when you opened the package up you 
had a glass in one hand and a little bottle of wine in the 
other. It was really a clever package. It was a 6.3 ounce 
package. That made us a lot of friends on the airlines, 
because it was perfect for them. They would just chill them 
and hand them out. What happened was that the plastic glass 
got so expensive, in part because of the fuel shortage, that 
they became about a dime a glass, up from three cents. We 
couldn't make it any more. 

Jacobson: How long did you have that? 

Moone: It was around for about five years. 

Jacobson: Was it marketed elsewhere? 



32 



Moone: No, we had a patent on it. It really was an exclusive product. 
We ran that up, and what it did was to get a lot of weight and 
activity for our distributors, even though we lost money on it 
in the end. It made a lot of friends; it made us friends with 
the airlines, and it got a lot of volume going. 



Boon to Distribution of Beringer Wines 



Moone : The one thing that Los Hermanos did was that if we needed 

twenty cases of Beringer in Iowa, the Los Hermanos truck that 
went there had the twenty cases of Beringer on it. If we were 
just Beringer and never Los Hermanos, we'd never have gotten 
all the distribution that we gained through the years. By the 
time Los Hermanos went away, it had really done a good function 
for us. Where a lot of the smaller wineries couldn't get the 
case there, we got the business because our cases were always 
there and coming in fresh. If they didn't have a Krug Chenin 
Blanc because Krug couldn't get it there, then they sold the 
Beringer. People liked it, and the next thing you know we had 
a franchise . 

Jacobson: Do you continue to sell wine on the airlines which is packaged 
differently? 

Moone: No. We don't do any coach business now, and we don't do any 

price negotiations with the airlines, in the sense that we sell 
at the same price we would sell to a distributor. We have a 
wonderful airline grouping now. We're on Finnair, all first 
class, with Chardonnay and Cabernet Sauvignon; we're on 
Swissair with Cabernet Sauvignon and Chardonnay; we're on 
United Airlines Asian routes, which is big, with Chardonnay in 
first class; we're on JAL with the Chardonnay; we're on Delta 
on all their overseas business to the European markets, first 
class. We currently have our Meridian, our new sweetheart- -the 
Chardonnay is on U.S. Air, first class. 

So all our business is targeted to first class. It's a 
small part of the company, but it's good exposure and good 
prestige. And all sold at full price. 



33 



Introduction of Light Wines 



Jacobson: Then there was the introduction of the light wines --Light 
Chablis and Light Rose in 1981. What gave you the idea to 
introduce it at the time? 

Moone: We needed to save Los Hermanos at the time. That was under 

Dick Maher's regime. I mean, Los Hermanos was going to go the 
way of the wind if we just stayed in the thick of the burgundy- 
chablis-rose battle. Wine by the glass in restaurants was 
dying off. Because of our experience with our imports, we knew 
a lot about lighter wines from Europe, so we thought that taste 
spectrum would be successful here. So we experimented around, 
and we made some good products. Then we all collectively got 
the BATF to allow us to sell them, and everybody went to town. 
We were really the first to come out with them, and they hit 
with quite a storm. 

That was a good move for Los Hermanos . The brand has 
survived because it niched itself into specialty items. The 
wine by the glass was one. Step two was that it went into the 
light wines. And three, it went into the White Zinfandel 
business early. 

Los Hermanos has hung on for a long time. We've looked at 
selling it, but it's so interrelated with the history of 
Beringer that it would be a tragedy if it got in somebody 
else's hands. So it should either die peacefully in our own 
arms [laughs], or survive because it survives on its own 
merits. So far it's not, but it's not terminal. It's still 
hanging in there. 

Jacobson: What exactly is a light wine? 

Moone: The definition that we have of it is that it had to have 

30 percent fewer calories. The reduced alcohol helped lower 
the caloric content somewhat, although the sugar levels helped 
lower it more . We had it down around 9 percent and 8 percent 
alcohol, and some were 7 percent. The meaningful thing at the 
time was that the definition of wine by the BATF was that it 
had to be 12 percent by volume. Anything over 16 percent was a 
port. They gave you a 1.5 percent variance. So wine could 
only be 10.5 percent to be sold as wine. That was for U.S. 
producers . 



34 



On the other hand, the Liebf raumilchs , which came in the 
country and which were wonderfully nice light wines, were all 
7 or 8 percent. Well, they'd just put on the label, 
"12 percent by volume." We'd go to the BATF and say, "Look, 
these guys are making 7 and 8 percent wines. They're not 
within the guidelines that you have for us." They'd say that 
was different, that they couldn't control the foreign imports, 
but they could control us. Finally we convinced them that they 
should allow us to make lower alcohol wines. It took us four 
or five years. 

The light wines were what twisted their tail. So for the 
first time we can make wines of that type. So a lot of it was 
legal. 

Jacobson: The lower alcohol wines were introduced at the same time as 
light beer, were they not? 

Moone: Yes. And I think it was timely. People had an interest in 
light products. There are a couple of perception problems. 
One is the perception that wine is a light product, in terms of 
a drink or a beverage. So I think to some people it's like 
saying, "Would you like a 'diet' diet soda?" It's the same 
kind of concept, if you will. It's like saying, "Would you 
like a glass of wine?" They think that's a diet drink. 

They flourished a little bit. Paul Masson made a big move 
on them. Paul Masson still has theirs. Almaden has 
discontinued theirs, I think, and Los Hermanos is the "other 
product." Paul Masson is by far the largest producer. We're 
down to maybe a hundred thousand cases of light, but 
interestingly enough, it's growing now. But it's very small. 
Actually, in the last three or four months it's been pretty 
healthy. 

Jacobson: Who is the consumer of light wines? 

Moone: I don't know. People like the taste. It's a nice taste. 
They're fruity, low in alcohol, easy to drink. It's a 
specialty item. There's usually only one in a store. If 
they're going to carry one light, they'll carry a Masson in 
most cases; in some cases they take ours. Here in the Bay Area 
where we've got a nice franchise, most people do still carry 
it. And it sells. You know, it just moves along. We don't 
promote it too much any more; we just let it sell along. 



35 



Declining Jug Wine Sales 



Jacobson: Declining jug wine sales in general has been the trend for 
quite a while. 

Moone: If you cover our company's gallonage reports, why, we've been 
growing steadily. It's kind of misleading, because we've 
really taken Los Hermanos down 600,000 cases in volume in the 
last five years by discontinuing items. So a lot of our 
business was just discontinuing the four liter sizes totally. 
Los Hermanos today is only five wines, and they're all magnums. 
We discontinued all the 6.3 ounce and all the three liters and 
all the four liters. And we had an eighteen-liter bag-in-the- 
box for restaurants, which was even more ridiculous. 

The theory used to be that if you controlled the house 
wine in a restaurant, the carafe business, then you could get 
wine on the wine list. But you needed a house wine to compete. 
Certainly, most restaurants don't have a house wine anymore of 
that ilk. Also, you don't need a jug wine to "get in the 
door." They'll buy a good wine from anybody. So restaurants 
have changed quite a bit. We really made Los Hermanos 
originally to help sell Beringer. 

Jacobson: That was the entree for Beringer--? 

Moone: Oh, sure. You used to talk house wine first. You'd go in, and 
someone would have Inglenook house wine; their wine list was 
all Inglenook, BV, and imports. "How will I get Beringer in 
there?" "You never will." So we'd say, "Let's talk about the 
house wine." You'd do a tasting, and they liked yours better: 
"Okay, we'll buy your house wine, and we'll put some Beringer 
on." The next thing you know, you own the wine list. It was 
that kind of game . 

What happened is that the glass of white wine went the way 
of the martini. It was a real popular cocktail drink; it was 
an over -the -bar business. Today, the over -the -bar business 
itself has declined, whereas the business tableside has really 
increased in restaurants. Restaurants have gone to a European 
concept of giving you a glass of good wine. So you can get a 
glass of Chardonnay now for four or five bucks. That was the 
biggest single boon to the premium wine business that we've 
ever seen, which means the premium business was fueled by 
restaurants, not by retailers. 



36 



So as consumers got exposed to a glass of good vine, they 
certainly wouldn't want to go back and have a glass of that 
swill. People didn't need to drink a whole fifth, or go 
through the ceremony of opening the cork to get a nice glass of 
Cabernet Sauvignon. They became better consumers. That's what 
still fuels the premium wine business. The consumers found out 
a lot about wine, started drinking it, and bought it to take 
home. Slowly, the jug glass-of -wine and "carafe" business 
died. 

It's not dead; it's still a big business, but it's 
declining. I think a lot of the brands in that category still 
will consolidate. I don't think there will be four wineries in 
the jug business in five years; there'll be two. 

I think the total business in wine is much, much smaller 
than it was five years ago. If you add up all the imports that 
are down, all the totally California-produced wine, and then 
all the wine coolers, we're definitely down. My guess is that 
consumption on a per capita basis, which approached three 
gallons per capita coming out of the late eighties, will 
decrease 50 percent to around two gallons per capita in the 
year 2000. But the number of people who do drink wine will 
have increased dramatically. We go from 44 million people in 
the prime drinking age of 21 to 44 in 1980, to 88 million 
people coming out of 1990. 

Then my bet is that, as we mature, we won't stop drinking 
wine magically at 44. In fact, I suspect I drink as much now 
as I did when I was 44. When you look at hard liquor, as I 
like to call it, I think something like 60 percent is consumed 
by people 56 and older. As they roll off the table, that 
consumption is not going to be replaced. This gives liquor 
companies huge cash flows that generate incredible positive 
cash, because they're not replacing their inventory. So 
they're turning around and buying wineries --or other 
businesses . 



37 



V BERINGER VINEYARDS 

[Interview 2: 12 September 1989 ]//// 

Renaissance of the Beringer Label 



Jacobson: 
Moone : 

Jacobson: 
Moone : 



I thought we'd start this time with the Beringer story. Let's 
talk about the renaissance it's experienced under Nestle. 



Well, it certainly has been a renaissance, 
start? 



Gee , where do you 



What do you think has chiefly been responsible for that? 

Oh, there are a lot of reasons that we've been successful. One 
is that we've had a good, solid game plan to move Beringer to 
better quality wines, and we stayed with that plan from the 
very inception in the early seventies. There were things that 
Beringer did in the early seventies that weren't consistent 
with a good premium winery. They had the wrong wines, they 
didn't have Cabernet Sauvignon, they didn't have a good 
Chardonnay. They had wines like Barenblut and Traubingold, 
which are not consistent with the varietal image that wines 
needed to have . 

They're called proprietary wines, but the proprietary 
wines, I think, are very difficult to establish a prestige 
image with. As an example, Paul Masson's Emerald Dry was a 
nice wine, but it's not an upper image wine. 

We had Grignolino, which had some unique points of 
interest. The grape varied from year to year in its quality. 
It was a very difficult grape to make good wines with. We also 
had burgundy and chablis and some of the lower-end wines. All 
those made up a good portion of the volume. 



38 



The plan was to get Chardonnay vineyards and Cabernet 
Sauvignon vineyards to add a private reserve layer of 
exceptional wines, and to establish the standards that were 
really world-class. Now, in the wine business that's an 
evolutionary process; it takes time. I always make the 
statement that if I knew it took this much time, I wouldn't 
have started. [laughs] I've been here fifteen years at it, 
and I'd say it took us about ten years to really get good. 
Then you have that time when you know you're better than you're 
being perceived, and in this business perception follows value 
by quite a lag. 

I think just now, after making five years of what I call 
really A+ wines- -and maybe a few B's, but no C's or D's- -we've 
really got solid wines. I think almost every one of my wines 
has gotten a gold medal somewhere in the last five years . Our 
private reserve wines, particularly the Cabernet Sauvignon, 
have been ranked number one in the U.S. by one or two people 
every year now for the past five years. We're really 
establishing great credibility with a broad cross section of 
consumers. But, again, you still have our inherited past which 
shows up in some locations, particularly in San Francisco where 
everybody knows the winery so well . 

So the perception of where we are now is that if somebody 
asked who the best winery in Napa Valley was, Beringer probably 
wouldn't be number one on the list. If you asked if Beringer 
was one of the really great wineries in the Napa Valley, we'd 
probably be on that list. I would think that if we continue to 
do in the next five years what we're doing, we'd begin to show 
up on the best winery in Napa Valley list. [interruption] 



Market Research Studies 



Jacobson: Have you ever done market research studies? 

Moone: Oh, yes, we do them all the time. They're improving 

dramatically, which is more evidence in the line of what I 
said. We know we're getting a good awareness out there of our 
image, and the perception that we're a better winery is growing 
every day. But the true praise that I like, of course, is -om 
what wine writers say, and the wine buffs, the restaurateurs 
and the retailers who really understand wine around the world. 
When they dip into a bottle of your wine and take the time to 



39 



write a letter about it or something, that's the part that you 
really like to see. Or when you're named number one in the 
country, like we just were in the Wine Spectator with our 1985 
Private Reserve Cabernet. That's -really nice, to see that kind 
of accolade. 



Rebuilding the Winery 



Jacobson: A lot of investment in new equipment and improvement to 
vineyards was done in the early seventies. 

Moone: We started with the vineyards in the mid- seventies , and we 

built a winery in '74 which opened in '75. Like most wineries 
at the time, it was not designed correctly; it was designed for 
red wines. Remember that the seventies was "there'll be no end 
to the red wine boom," and we had all red fermentors. 
Actually, at Beringer we had very little red wine; we're mostly 
a white wine winery, despite the image of our size. As an 
example, we produce our Cabernet Sauvignon from Knights Valley. 
It's about 55,000 cases a year, which is less wine than Jordan 
makes. So our Cabernet is pretty scarce. We'd like to have 
more. In fact, we're planning to get more. In 1997, we'll 
have more ! [ laughs ] 

One of the first things that I was challenged with when I 
came in as president in 1984 was, really, to rebuild the 
winery. We put about $22 million in the winery to put in a de- 
juicing operation and Bucher presses. We put in all Bucher 
presses, two fifty- ton and a twenty -five -ton Bucher. We put in 
two must chillers back to back for our Chardonnay. We designed 
our own system on that, by the way. It's quite a neat system, 
a rotary system instead of a long pipe processing system. It's 
a heat exchange system, which they all are. We build up a 
block of ice at night and then use it during the day. It's 
very efficient. We can chill a wine about thirty degrees, and 
we can handle about twenty tons per hour at thirty degrees . 



Beringer Winemakers 



Jacobson: How did Myron Nightingale contribute to the Beringer 
renaissance? 



40 



Moone : 



Myron, of course, was one of the technically better vinemakers 
in the state. He knew California wines. I think he's the kind 
of winemaker who I'd say never really had a break. He was with 
Schenley Distillers a long time, who were more liquor-oriented, 
and he never really had a place where he could go and say, 
"This is what I need to make great wine , " and it would show up . 
I'm sure he said, "This is what I need," but it never came. So 
he was the perfect person, I think, at the time to instill high 
standards . 

He was a brutally honest winemaker. If his wines didn't 
measure up to what he wanted, he would say so. And he really 
had a sparkle in his eye . He was quite a PR spokesperson for 
us. He was a good person at the time, and certainly one of 
California's great winemakers . I think we were as good for 



Myron as Myron was good for us, too. 
institution. 



We made Myron really an 



In the footsteps of Myron has been Ed Sbragia. Ed's made 
all our private reserve wines since the first one in 1977. So 
while Ed was in the footsteps of Myron, he was generationally 
ahead (I guess that's the best way to say it) of Myron. As a 
premium winemaker, he's spectacular. He lives it, he breathes 
it, he's from a third-generation California winemaking family. 
Ed's been to Europe four or five times with the great 
winemakers of the world. Eight weeks a year here we have the 
first growth winemakers as consultants. So he's been 
dimensionally way beyond anything that Myron had experienced, 
and I think the wines show that. 

Jacobson: You've done a lot to associate the winemaker 's name with the 
Beringer image in advertising and promotion. 

Moone: Our philosophy is that the winemaker speaks for the wines. We 
don't have a bunch of executives like me running around talking 
about them; we stay in the background as much as possible and 
talk to trade issues and subjects like that, where it's 
natural. But the wines and the winemakers speak for the wines. 

Jacobson: The commercials that Ed has done have a sort of casual, down- 
to-earth flavor to them, and at the same time educate the 
consumer about wines. 

Moone: We try to be informative. We try, obviously, and talk to 

something that's to our advantage, that we're good at. Ed is 
very comfortable. He's a very down-to-earth winemaker. He's 
not one of these arrogant kind of guys; he's a real peoples' 




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41 



people person, and I think that shows in the style of his 
commercials. He's very good at them. Many people probably 
think it's an actor, but it's really Ed [laughs]. 



As an example, we try and talk about proprietary- grown, 
what that means to Ed- -the fact that all the Chardonnay grapes 
he has are ours; he doesn't have to buy them on the open 
market, they don't change from year to year, and what that 
means to him. 



Vineyard Acquisition and Management 



Moone: The other thing is Bob Steinhauer, who is the second part of 

the equation. You don't just have a good winemaker show up and 
make good wine; you need good grapes. Bob Steinhauer, who was 
with Beaulieu Vineyards for about eight years, has been with us 
now going on twelve years. He's a real unique farmer. He's 
the best farmer in Napa Valley, without question. Tremendous 
capabilities. 

He's the first viticulturist who's been president of the 
enologist and viticultural group [American Society for Enology 
and Viticulture]. I think that's quite a compliment to him. 
He's taken our core group here and made the vineyards 
phenomenal with a great crew. He's helped us in our selection 
of all our vineyards, including our operation up at Chateau 
Souverain, where we moved into the Alexander Valley. I think 
we had four grape growers at Chateau Souverain that we were 
left with, out of four hundred growers, after examination of 
the wines. We went out with our winemaker and with Bob and 
visited every vineyard before we made a contract, and took the 
business down to very few cases. Bob really did a great job on 
that, and the wines are really showing it there. 

Then there's our new venture into Meridian, which I'm sure 
we'll talk about later on. We bought all our vineyards down in 
Santa Maria, the Santa Barbara coast, and Paso Robles. We now 
have six thousand acres, so we're by far the largest premium 
vineyard owner in the state. Bob really handled all that, and 
all that is key to our quality. We're really driven by 
controlling our own destiny as much as we can by controlling 
our own vineyards, bringing them to the highest levels, and if 
we only want four tons to the acre, we're going to get it; we 



42 



Jacobson: 



Moone : 



don't need to grow five tons to make money, 
steps that show up in wine's quality. 



All those are 



So when our winemakers ask for a pH of 3.2, and an acid of 
2.9, and a residual sugar of 22.8, or whatever, we do it. And 
if we can't do it, we sit down and talk about next year and how 
to get it there. Then we farm for that. That makes all the 
difference in the world, if winemakers get what they want. 



Getting those vineyards is a very expensive undertaking. 
Nestle been very supportive of all of those--? 



Has 



They've been very supportive of us, and they're very supportive 
of any business venture, I'd say, that has a good return on it. 
It's not Just Nestle money pouring over here and buying 
vineyards. We throw off a lot of positive cash in our own 
company. While we've gone negative in the last couple of years 
with our large investments, particularly the one that we just 
spent almost $20 million for in the San Antonio vineyard, we'll 
go back to a positive cash flow next year. That includes 
sending our parent company a dividend, so we're a profitable 
company . 

I mean, if Nestle wasn't here, we'd have gone to the bank 
and done the same thing. So it's not just a matter of somebody 
needing a place to stick some money. This is a profitable 
enterprise that pays its bills and makes a return on 
investment, which we're very proud of. 



Beringer White Zinfande 1 



Jacobson: Let's talk a bit about marketing premium brands for Beringer. 

I take it that gradually over time you streamlined your product 
line. 



Moone: Yes, we've narrowed the portfolio of wines. Our biggest wine 

by far is White Zinfandel. There we made a tough decision, one 
that we've stayed with, and I think it's the right decision, to 
use only North Coast grapes for our White Zinfandel program and 
to use only arrested fermentation. A lot of people take White 
Zinfandel down to dryness and add a grape mute to give it a 
sweetness, and that adds a harshness to the wine. We halt the 
fermentation by chilling it, which requires very expensive 
cooperage. We have invested in that cooperage all through the 



43 



Jacobson: 
Moone : 



North Coast, here at Beringer, up at AstI, which we purchased, 
and at Chateau Souverain. All those facilities bring in 
Zinfandel grapes for Beringer White Zinfandel. Currently our 
guess is that about 60 percent of the Zinfandel grapes on the 
North Coast go to us, which means we're limited in how much 
more we can get. I don't think we'll get much more than that, 
personally. 

The wine sells about a million cases , and while I think we 
could sell two million cases if we were possibly a California 
appellation and went to the broader grape market, to balance 
that we sell it two dollars a bottle higher than all the other 
White Zinfandels on the marketplace. I think we have a 
different product. It's superior, it has a better taste 
spectrum; we've proved that to ourselves in consumer testing 
and tastings, and blind tastings, where we're preferred about 
60 to 40 percent, which is a pretty good win in a taste 
preference . 

We've become the upscale White Zinfandel, if you will. 
Now, the bad part of that is that we just can't make any more, 
it looks like. So we'll be planting some of our vineyards 
long-term to grow that slowly. 

That's been our number one seller; it's been a tremendous 
product for us and one that we have really legitimized, I 
think, by giving it real high standards and keeping it 
segmented from the herd. That's important to us, too, because 
we're not here just to sell a White Zinfandel and make a lot of 
money. We're here to sell Chardonnay, Cabernet Sauvignon, 
Sauvignon Blancs. Those varietals are where our vineyards are. 
We own those vineyards on the upper end; we buy the Chenin 
blanc on the open market . 

It's important for us to realize that long-term, if we've 
harmed our Chardonnay by doing the wrong thing for White 
Zinfandel, then we've done a terrible thing. We're going to 
keep it on the upper end, upper level. It's worked very well 
for us. 

Has the two dollar price differential discouraged consumers? 

We're on allocation, and we have been for three years. Every 
case of white Zinfandel- -actually every wine we have at 
Beringer is on allocation for the whole country. So business 
is very healthy. That's unfortunate, too, because you can't 
grow the brand any more than you have the grapes, so Beringer 



44 



is moving more towards a price increase strategy than a volume 
increase strategy. We'll keep the brand about where it is in 
volume . 

Jacobson: Is there a ceiling on how high White Zinfandel can go? 

Moone: Oh, I think so. I don't think the consumer's going to pay 

twenty dollars a bottle. I mean, I don't see a private reserve 
White Zinfandel business. I don't know, I have a feeling we're 
probably up at the upper limits now. It's an eight -dollar 
bottle of wine in New York right now, and they can't keep it on 
the shelves. So I'd say it certainly sells at eight; now, 
would it sell at nine? I don't think so, but it might. 

As I get older, I lose perspective on pricing. A bottle 
of Scope mouthwash that's 2 percent chemicals, 1 percent 
flavoring, and 90 percent water sells for eight dollars, so 
certainly a bottle of wine, in my mind, compared to that is 
worth ten dollars. But I don't know that the consumer 
perception of the value of wine is the same. I think it's 
probably a little lower. But we do an awful lot to our product 
to get our dollar. I mean, we have to grow the grapes, squeeze 
them, age the wine, ship it carefully, and battle all the 
governments and BATFs and everything else to get a dollar. The 
other products, like Scope, don't do that. 



Streamlining Beringer's Wine Portfolio 



Jacobson: Can you describe for me what the wine portfolio was like in the 
early seventies and what it narrowed to? 

Moone: In the early seventies, when I first came here, we had a few 
stars. Every year we had one good wine that kept us going. 
The first really good wine we had was the 1970 Cabernet 
Sauvignon, which did quite well in tastings and was really a 
nice wine. The '69 Cabernet Sauvignon was also pretty good, 
although a very light vintage. After that the Chardonnays were 
not competitive, but they were good drinking. By the way, they 
were low-priced at the time. It was like $2.99 for the 
Chardonnay, and Fume Blanc was $2.99 to the consumer here in 
California. 

We did move through the inventory. The first things we 
did here were to begin to bring in some oak barrels. I 



45 



remember the year we cancelled all our advertising to buy oak 
barrels. Why advertise something that wasn't as good as you 
wanted it to be , if in fact oak is what you need to make better 
Chardonnay. We knew that. We grw ourselves internally here, 
by our own bootstraps, by doing things like that. It wasn't 
just, "Send more money. Send more money." Those were dark 
days, but we made the right decisions along the way, always, as 
I said back at the start, staying with our plan. 

Sure enough, that first wine happened to be our '78 
Chardonnay. It was a pretty good vintage, and all of a sudden 
we got a gold medal. We had quite a bit of it; we had about 
30,000 cases or so at the time, and, gee, we made a nice name 
for ourselves with that Chardonnay. It's continued every 
since. Our Chardonnay has been, I think, a very good program 
for us. Stylistically I really like the development of our 
Chardonnay in the last ten years. 

In the early times we had things like Malvasia Bianca, I 
recall, coming out our ears. It was a sweet wine that was Just 
terrible. We had a long-term Malvasia contract that finally 
ended [laughs]. So we sold a lot of that, and as soon as it 
was gone we discontinued it, of course. Grignolino we wiped 
out. I got rid of Barenblut and Traubingold. I killed the 
generic wines, which was a pretty good-sized business for 
Beringer--the burgundy, chablis, and rose. I killed Camay 
Rose. So we got rid of a lot of those kinds of wines. I 
discontinued all 375 milliliters because the quality in the 
small bottles doesn't hold up. You know, those things are like 
taking a step back to take a step forward. They were good 
decisions, but a little painful at the time. 

We focused on the 750-milliliter business, period. We 
made no magnums, except for a few reserves and upper-end 
Cabernet Sauvignons . If you look back and ask why Beringer has 
been so phenomenally successful, it's because we're the largest 
user of North Coast grapes . The North Coast counties were up 
to 1.8 million cases of Beringer this year. 

As an example, when I joined this company, the gross sales 
of the company for all things combined was $3 million in 1973, 
and this year we do $120 million. So it's really a tremendous 
success story. And it's fueled, of course, by Beringer. But 
if you ask what Beringer has done , if you could focus on that , 
that has made it so successful, the answer is that we're the 
only winery that has focused on the 750-milliliter business. 
That's an absurd statement, but if you really think about it, 



46 



the Mondavis, the Fetzers, the Inglenooks, have all taken a 
magnum and driven some form of table wine off their premium 
image to gain a few dollars in sales. We're the only major 
winery focusing on 750 milliliter. 

We've also focused on the consumers and talked to them. 
We're the only company that's really marketed at all to the 
consumer with print and radio. So we've operated in an 
advertising vacuum, which has been wonderful. We've had a good 
story to tell. Now we're starting to get a little more 
competition in that respect; people are waking up. But we've 
had a wonderful focus from quality to marketing to our whole 
strategy, and stayed with it. That's what's made us 
successful. 



Jacobson: Were some of the wines that Beringer got rid of absorbed by Los 
Hermanos? 

Moone: Yes, Los Hermanos was a wonderful scavenger for us, because if 
something didn't meet Beringer standards we could move the wine 
off very easily. So it did play a good role for us. And while 
it never made great money, it did contribute some overheads. 
As it's slowly ebbed itself away it helped carry the freight. 
Because its tonnage was larger, Los Hermanos carried the 
twenty-five cases of Beringer to the Minnesotas, upstate New 
York, and all the places around the country. 

If you were a small winery just trying to get in that 
area, you could never get there. But the Los Hermanos freight 
carried the small amounts of Beringer. So we colonized 
Beringer across the country in every market. While our focus 
was always Beringer, you know, it's very much a bottle 
business, a wine list business. So we've been driving it for a 
long, long time in all those markets. Now we're doing two and 
three hundred cases a month in those cities. So cumulatively 
we're truly a good, strong national brand without any weak 
markets; we have good markets all across the country. Because 
of that, we have a really great network of distributors, which 
is a great strength of ours . That helps us in our new 
products; that's where that key is to us. 



47 



Jim Tonlum's Contributions to Premium Wine Marketing 



Jacobson: You mentioned last time that Jim Tonjum was the best premium 
marketing mind in the business. 

Moone: I still say that, a month later! 

a 

Moone: He's got a tremendous feel for the premium business; call it 

gut level instincts. First of all, he's very bright. He lives 
his life on the upper end of experience, and he's a very 
inward-driven person, as opposed to being an outer-driven 
person. That is, he would rather have the experience of a 
first-class trip to Paris than he would another house worth 
another hundred thousand dollars. So he's driven by experience 
levels, and he really understands life on the upper edge of 
what quality really is. He can translate that into our 
products . 

It doesn't mean he has a great palate. It does mean he 
understands the labeling and what taste spectrums and trends do 
in Chardonnays or Cabernet Sauvignons , and how we should be 
there, and what wines are winning in fairs and how to judge 
that, and what the perception of that is to the consumer. He 
tells us how to translate that. So he's very deep and very, 
very good. We love him. [laughs] He's extremely well-paid. 

Jacobson: What have been some of his better marketing ideas? 

Moone: Well, one was to cancel his advertising and buy barrels; that 
was his idea. Another of his ideas goes back about five years 
ago, when we almost selected Allen and Dorward as our agency. 
He ran into Fran Hulse, and we didn't give Allen and Dorward a 
chance of becoming our agency. He was very impressed with her 
and the talent she had, and that drove us into really 
breakthrough advertising for radio. We backed it in a big way, 
and it really added momentum to our brand. 

Jacobson: When did you first start with the radio advertising? 

Moone: I'm going to say six years ago, five years ago. I must be 

getting old when I blur years like that, but it's somewhere in 
there . 



48 



Wine Competitions 



Jacobson: What about entering wine competitions? 

Moone: Oh, we enter all those. There isn't much of a penalty if you 
lose one, and if you win something everybody loves it. And we 
win quite a few. The consumer pays a lot of attention to that. 
If you can stick a gold medal on your bottle, it'll sell 
better. We know that, so we like to win them. Usually, 
unfortunately in our business, the wine that won is already 
bottled and gone, so you don't have time to do much. You can 
put a little shelf tag on it, or a neck hanger, or something 
like that. But they help, and they add to the overall prestige 
in the winery over time. 

Jacobson: How does Beringer decide when to enter competitions? 

Moone: We enter them all, selectively, with our wines. We know when 
our wines taste good. For example, we're releasing our '88 
Chardonnay right now, and it's too young for it. We wouldn't 
enter it in a fair for another four or five months because it 
needs some more bottle age. So we pick the time. Sometimes 
they pick the time and you know that your wine at that time 
wasn't tasting great, so you don't expect too much from it. 
But you know that later on it's going to be great. By and 
large a lot of the fairs are scheduled too early. 

A lot of wineries design their wines to taste good early-- 
and I could tell you who they are- -and those wines fall apart. 
You see them a year later and they're dark in the bottle and 
they don't hold up. We're not going to do that. We're going 
to make wines that are good for consumers for a long, long 
time, and do the things that we want to do. We're not going to 
go upside down just to win some medal at a fair. 



Advertising and Public Relations Budgets 



Jacobson: How important a piece of the budget is advertising? 

Moone: Advertising is equally as important to us as PR. Now, Jim runs 
our public relations department also, and we spend about 
equally on them. Our advertising budget would be about 
$3 million, and our PR budget would be about $3 million. That 



would include our entering the contests, seeing the vine 
writers, being visible with a winemaker. We have Madeleine 
Kamman with the School for American Chefs, which has generated 
a tremendous amount of publicity for us, very positive. And 
then we're running our facility here for the Hudson House. 
We'll have about twelve thousand guests who dine here with us 
this year at our new Hudson House, so it's quite an integral 
part of our program at Beringer. 

Now, that's not all Beringer. The numbers I gave you are 
total company. Beringer would be about two- thirds of that, so 
we spend about $2 million in PR and about $2 million in 
advertising at Beringer. 

Jacobson: And the rest goes for Napa Ridge and Chateau Souverain? 

Moone : Right, and miscellaneous print for some of our import 

operations. The real media we drive is Napa Ridge and Beringer 
for radio. In a PR sense we have a winery and full PR staff at 
Chateau Souverain, and a restaurant that has done fabulously. 
That would be the balance. 



50 



VI NAPA RIDGE 



Carving a Niche Among the Fiehtine Varietals 



Jacobson: Napa Ridge falls in the fighting varietals category, does it 
not? 

Moone: The negociant vines, right. That's how they started; I don't 
know what they are now [laughs]. It's interesting- -we just 
took a look at the top ten wineries by price categories . We 
took the magnums out of this category and looked at 750 
milliliter only in the four dollar and eight dollar categories, 
and then the eight dollar category and up. Then we split the 
wineries out. 



In the top ten wineries the eight dollar and up category 
last year grew at 9 percent and accounted for 30 percent of the 
business. All wineries below that, which are in the hundreds, 
grew at 9 percent and accounted for 70 percent of the business. 
The largest winery there in volume was Mondavi, and Beringer 
was number two. Of interest in that is that all wineries are 
doing pretty well and nobody's dominating that upper end. We 
certainly have need for million-case wineries in that category. 

Now, going to the four to eight dollar category, the top 
ten wineries account for 70 percent of the business- -just a 
mirror image of the eight dollar and up category- -and grew at 
28 percent last year. All other wineries declined 2 percent. 
So what you see there in that four to eight dollar category is 
an intensification of the marketing efforts of the wineries, 
which consumers and the trade are responding to. 

Since then we'd have to add into that category Gallo, 
who's entered with White Zinfandel, which would change the 
numbers . My bet is that that category is skewing to four or 



51 



five wineries at the very most, and the source of grapes will 
be very key to that The bigger wineries in that category will 
be more eager to get more grapes- -and they'll get them- -to fuel 
their growth. 

The big brands are represented by Fetzer, Mondavi with his 
table wines, us with Napa Ridge and Beringer White Zinfandel-- 
we play in that category in two ways --Glen Ellen and Sutter 
Home. Those are the wines that are really popping out as very 
popular and growing. My bet is that they will continue to grow 
and skew into that category very aggressively. 

Jacobson: What was the thinking behind Napa Ridge when it first started? 

Moone: When it first started we could get a lot of Napa grapes right 
here; there was an excess of wine. We'd always gotten samples 
of wine here because, one, we pay well, and if we have a 
problem with what we paid for we don't try and mess around with 
the person that sold it to us; we just take our lumps. So we 
have a good "handshake" reputation. 

A lot of wineries were trying to get rid of excess wine 
inventories, so we said, "Gee, why don't we start buying some 
of these and we can make some pretty good wines. They're 
attractively priced." We started Napa Ridge. Actually, we 
tried to buy a winery at the time and use it as a vehicle, but 
it didn't work out. So we just said we would go with a name we 
like. As Los Hermanos was declining, we said, "Why don't we 
replace that where we can make a couple million bucks and have 
a little scavenger here locally that we can move our wines to, 
to put out a good wine at a good value." Basically, to have 
Napa County wines was the idea. 

And we did that. We came out with them with a Cabernet, a 
Chardonnay, and a Sauvignon Blanc. Our idea was to drive it to 
a hundred thousand cases, and we were going to be real happy. 
Well, what happened is that we went by a hundred thousand cases 
the first year just rolling off the table. The second year we 
went to three hundred thousand cases, and of course there were 
no wines available from Napa towards the end of that year. The 
next year we went to six hundred thousand cases. It was an 
absolutely phenomenal success story. My bet is that we'll 
drive that brand over time to a couple million cases. 

It changed from what we started with it, to what it is 
today, certainly. It's certainly more successful than we ever 
thought it would be . 



52 



Strategies for competing in the Fighting Varietals Market 



Jacobson: Is it a challenge to keep the price in that four to seven 
dollar range? 

Moone: It has been, but we bought vineyards so that we can farm our 
excess wines into Napa Ridge and fuel it ourselves. That's 
very important. I really think that the U.S. needs a wine like 
the Macon Village Blanc Chardonnay that is a good value , tastes 
great, you can get a glass of it inexpensively. It's not the 
big, oaky, complex wine that a Beringer is, that you're going 
to pay a lot of money for and really enjoy the experience of 
over a long, lingering dinner. This is something that you're 
just going to enjoy at the moment. It's good! Europe's had 
that for years, and the U.S. never developed that business. 

Well, when we bought our vineyards in the Santa Barbara 
area, we bought lots of acreage where we can make a lot of 
Chardonnay. Our cost factor in it will allow us to sell a 
Chardonnay at about a forty dollar f.o.b. --forever . We can 
make very good margins, and we can farm it at that level, and 
we can make a great wine. So we don't have to pay twelve 
hundred and eighteen hundred dollars a ton, like you hear 
stories of, and have squeezed margins. 

Now, the other side of that is that we've kept Napa Ridge 
volume down. We could have grown the brand much faster if we 
had gone out in the open market and just said, "Let's grow at 
any price." One, we wouldn't have had the quality that we 
wanted, and, two, we wouldn't have had any margins that would 
have been interesting. So we've kept it a slower growth, while 
the growth rates are phenomenal; the category has really 
boomed. 



I think in comparison Sutter Home and Glen Ellen, between 
them, are almost three million cases each. So you can see that 
we didn't share in that kind of growth. But we'd rather come 
back and say, "Gee, let's grow the parts of it we like, slowly 
over time, and do it with quality." Because I think quality 
will be very important in this category long-term. We're going 
to keep a fighting varietal wine at a very good price level, 
where we can make money for a long time. 

I think the market will dip down where people can come in 
and out of it and compete with us , but over a long period of 
time there just isn't enough good quality Chardonnay coming 



53 



into this state to compete with us. So I think we're very well 
positioned with our six thousand acres to be a good quality 
supplier of Chardonnay, in particular, in that category. 

That's our strategy. Other people have done other things. 
Bel Arbors bought cheap grapes and wine in Washington rather 
than paying higher California Chardonnay prices. That's their 
strategy. Glen Ellen paid whatever it took and is operating at 
lower margins. They're trying to transfer that business, it 
looks like, down to Fresno Chardonnay grapes in the near 
future. So they said, "We'll maintain share, no matter what it 
costs us, and then we'll transfer our grapes down to lower- 
cost grapes from Lodi and Fresno when they come in." That's 
their strategy. 

Jacobson: A long-term strategy that might get them into some trouble. 

Moone: Well, they can make money, but if the wine doesn't hold up it 
could get them both in trouble. I like our strategy, and our 
strategy was to buy quality vineyards and protect the 
franchise. Sutter Home strategy is to move to Lodi also, and 
wait until those grapes come in. Sutter Home is also 
broadening their Cabernet Sauvignon and Sauvignon Blanc 
franchise a little bit from what must be 90 percent Zinfandel 
and White Zinfandel. 

So all of the big ones have some kind of strategy. 
Mondavi looks likely to do a joint venture with some other 
people in this new Montpelier wine that they're coming out 
with. So there are all kinds of different strategies. And, of 
course, Mondavi bought a lot of vineyards, as we did, down in 
the Santa Maria area. So they're very well entrenched, I 
think. I like our strategy and Mondavi's the best so far. 
We'll see who was right at the end, right? 



Broadening the Consumer Base through Fiehtine Varietals 



Jacobson: How important is the fighting varietal category in terms of 
broadening the consumer base? 

Moone: Oh, it is what's broadened the consumer base. If you look at 
what's driven the wine business, it's, one, wine by the glass, 
If we had just sort of sat back and waited for the retail 
business or the customers in restaurants to order a bottle of 



54 



wine, we'd have been millions of cases behind. But now 
somebody can walk in and enjoy a glass for three, four, five, 
six dollars, and it's a good glass of wine. They can enjoy a 
meal and not have to have a whole bottle. We've really made 
wine convenient by that. It works for the restaurateur, it 
works for the consumer, it works for us. 

The fighting varietals field inspired that entire change 
from horrible house wines [laughs] --and remember the carafe? 
You don't even see a carafe any more. Isn't that great? They 
were just rotten. I had one once with a mouse in it. It was 
quite exciting. Anyway, it's a wonderful change for the U.S. 
consumer. It's very much European, and it's what's fueling the 
growth of our business in the premium end, and will continue to 
fuel it. So fighting varietals are very, very important. 

Three out of four grapes sold in the premium arena last 
year were Chardonnay, Cabernet Sauvignon, and White Zinfandel. 



Jacobson: So you see consumers following what they are perhaps learning 
at the fighting varietal end of it. 

Moone : Sure . 



55 



VII C & B VINTAGE CELLARS 



The C & B Portfolio 



Jacobson: Why don't we talk about C & B Vintage Cellars and other 
imports . 

Moone: Way back when, when we had a big investment here and a lot of 
people and no business, we asked how we could get more 
business. One of the ways was to sell European wines, where 
you had no investment and your people could talk to somebody, 
sell them something, and make some money. So we started off 
with C & B Vintage Cellars. In the old days it was Crosse & 
Blackwell, which is the name Nestle had- -the old plum pudding 
division. But we didn't like that (some people still call us 
that), so we shortened it to C & B Vintage Cellars. 

We kind of messed around in it for a while and lost a lot 
of money. We got into Bordeaux and Burgundies, and they really 
weren't an area for marketers like us; we couldn't bring much 
to the party there. That is, if we had a 30 percent mark-up on 
a Burgundy, and the market place was 20 percent less than that, 
what did we bring to ours that made it better than somebody 
else's? It was really the same with Bordeaux. 

But we hit upon Fontana Candida Frascati, which was the 
white wine of Rome. It really became successful. When we took 
it over it was 180,000 cases, and when we sold the brand it was 
325,000 cases. It was made by Winefood in Italy, which was 
purchased by Brown -Foreman, through a real complex, long story 
that was kind of interesting and fun. 1 They paid $7 million 
for the worldwide rights to it in Italy, not knowing that we 



L See pages 27-29, 57. 



56 



had a two-year contract with no volume provisions here In the 
U.S., on a three-year rolling basis. 

We entered into negotiations with Brown -Foreman, and they 
didn't want to pay anything for the brand. So I told them, 
"Good, I'll take it to zero cases in the U.S." It was 50 
percent of the Frascati business for the world. It was really 
a great negotiation. Ve got rich, and they got the brand 
[ laughs ] . 

We introduced Centanni, our own Frascati wine from our own 
winery near Rome. We sold about 35,000 cases last year. We 
know the business, and I think we'll grow it slowly to a pretty 
good brand. It looks like it's got some life to it. Brown- 
Foreman didn't even ask us for a covenant not to compete, so it 
was very exciting for us. It was a good deal. 

That was the backbone of our business. Since then, 
because Centanni 's quite small, we've refocused. We had Zonin 
wines, which were about half a million cases. We dropped them 
because it was just a big volume effort that we couldn't make 
any money on, and we didn't see long-term how we could. 

We scaled C & B back about three years ago, at the time we 
sold Fontana Candida. Now we're a portfolio of world-class 
wines that basically sell themselves. We have Cune , the great 
Rioja wines; it's been one of the top fifty wineries profiled 
by the Wine Spectator. A really wonderful family; the same 
people have owned the winery since the 1840s. It's really 
great quality. We sold about ten thousand cases of that this 
year in the U.S. It's a pretty nice item. 

We have Jean Carlo Travaglini's Gattinara- -that's the 
squashed bottle that you see around. A wonderful product. 
He's been with us since the inception. We sell every case we 
can get of his, about six or seven hundred cases a month; 
that's all we get. We're 90 percent of the Gattinara business 
in the U.S. with Jean Carlo. He's in the Hugh Johnson Great 
Wines of the World book. He's a wonderful quality producer. 

We have Champagne Deutz . Of course, we did a joint 
venture with them in producing Maison Deutz. They're a very 
small, highly prestigious wine. Very small, but very, very 



pages 61-63. 



57 



good. Very expensive, 
cases . 



Last year we sold about ten thousand 



Jacobson: 
Moone : 



Then we have Vayra from Italy, a great Barolo. We have 
Poggio-Salvi with a Brunello di Montalcino. So we have just 
wonderful, small products, high quality: Bigi, the estate 
Orvieto, those kinds of things, that really sell themselves. 
Also we have had Monmousseau for over fifteen years- -a 
wonderful quality wine from the Loire Valley. With that good 
little volume base --it's about $4 or $5 million a year in 
sales- -perhaps the timing is now good to enlarge it more. 
We're contemplating doing some new things in there- -adding to 
the portfolio again. I think our timing to get out of it was 
great. We sold Fontana at its peak; I think the brand's less 
than a couple hundred thousand cases now. And, of course, the 
dollar changed a lot in that time, and our emphasis switched to 
California. 

We'd like to keep a third leg in Europe. Our people enjoy 
selling the imports. It's added to us here in the U.S. by 
making us more aware of what a great wine in the world is, and 
not just a good wine in Napa Valley. So we really have world- 
class standards to our company and our contacts. Our friends 
come over here, as I mentioned earlier, from the first growths 
of Europe and they spend eight weeks with us. Our great 
Beaujolais supplier does the same thing, Georges Deboeuf. 
These are friends we've made through this, so the imports bring 
a lot more to us than just revenue and some fun selling them. 

Maison Deutz--we wouldn't have gotten into that without 
Champagne Deutz , so there have been some big pluses. I'd like 
to see us continue in it, and I'd like to get it up to 
$20 million again, some level where it's really worth messing 
around with. Because at a lower level of sales you kind of 
lose focus or interest. That's one of our challenges in the 
next two or three years . 

How will you grow it from $4-5 million up to $20 million? 

We can do a lot of things. We're looking at some acquisitions, 
we're looking at some joint ventures. There's been a lot of 
interest expressed by owners of brands who don't feel they've 
been marketed well in the last few years in the U.S. We've 
rejected them so far, but one of those will be of interest, I'm 
sure. So it's going to be a little of this, a little of that, 
knocking on some doors and showing them what we have to offer 
and what we can bring to the party. 



58 



Focus on Expensive Brands 



Jacobson : 
Moone : 



Jacobson: 
Moone : 

Jacobson: 
Moone : 



Jacobson: 
Moone : 



Do the imports do better on the East Coast than in California? 

Oh, yes. Two-thirds of the sales are in that eastern corridor, 
so it's a big item in the East. Upper-end vines sell from 
Washington, D.C. , up through Boston, and lover-end imports sell 
from Miami all the vay up the coast, everywhere . 

What about positioning the imports that are more expensive than 
middle-range or lov-end prices? Which is the most difficult to 
handle? 



We're almost all upper end nov. 
in there that's not $10 and up. 
the C & B imports. 



I don't think there's a vine 
I mean, they're expensive -- 



Was there a lover-end product before you cut C & B back? 

There vas , and it vasn't a good business for us. The Zonin 
vines vere inexpensive-- As ti Spumante and those kind of things, 
that's just not our business. That's kind of like the Los 
Hermanos part of the business. We don't do veil in that, 
either. 

So you plan to keep it an upper end--? 
Definitely an upper end. 



Impact of a Strong Dollar 



Jacobson: Hov has the strength of the dollar affected the import 
business? 

Moone: Well, it hurt imports, and helped California at the time it 
occurred. Because if you look at advertising through the 
decade of the eighties, advertising in the U.S. by branded 
goods vas Gallo on television and imported brands on some 
television and radio. When the dollar valuation changed, the 
import margins changed dramatically. So the first thing they 
did vas cut their marketing in order to hold their price 
margins. In other vords, if you vere selling for $7.99, and 
nov suddenly to keep your margins you had to go to $10.99, you 



59 



said, "Gee, the consumer won't do that, 
price by cutting the advertising." 



I'll keep my $7.99 



As soon as they did that there was this giant void, and 
Beringer stepped into that void, if you will that wonderful 
window of opportunity, where nobody was advertising, nobody 
here and nobody there. I took, as an example, Beringer 
Chardonnay to New York and put it on the radio when our 
business was sixty cases a month. We needed to sell a couple 
hundred cases a month just to pay for a flight of radio 
commercials. Of course, we did it overnight; we drove it to a 
thousand cases a month. That was an opportunity that probably 
won't come along again in a long time. 

Jacobson: I'm glad you brought that up, about the vacuum. 

Moone: It's been fabulous. And it's still going on a little bit 

today, so we're still out there. The imports are not back, but 
some of the California people I don't think have seen what 
we've been doing. So they'll be coming after us a little bit. 
We already see Sutter Home with effective radio media as an 
example . 



Shipping 



Jacobson: How are the imports shipped? 

Moone : We ship them in a couple of manners . We ship them in 

containers by themselves directly to distributors. That's the 
most popular way; that's about 80 percent of our business. 
Then we ship containers here to our warehouse in St. Helena and 
ship them out of our warehouse here across the country in one, 
two, three cases, along with the Beringer and Chateau 
Souverain, Napa Ridge, Maison Deutz , and all that. 

Moone: It's a little more expensive to ship to the East Coast because 
to handle it here we mark it up about four bucks a case, and 
it's about the same cost to land it here as it is back there. 
The freight back there would be two bucks. Let's say it's a 
six or seven dollars a case difference, but it allows many 
distributors to sell a hundred dollar case of wine and not have 
a big inventory; this way they can buy one or two cases at a 
time and still have it in their price book and have a full 
offering. A lot of distributors are so small that they just 



60 



can't handle containers in small cities and so forth, so this 
is a real service part of our business. It's a good dimension 
for us to have. 



61 



VIII ACQUISITIONS AND PREMIUM BRAND DEVELOPMENT 



Maison Deutz Partnership 



Jacobson: How did the Maison Deutz partnership come about in 1986? 

Moone: First of all, we'd been selling Champagne Deutz for about six 
years, and they had an interest in buying some land over here 
and starting an operation. We don't have expertise in the 
sparkling end of the business. It's an entry that we'd like to 
have some expertise in and learn about, so it was a chance for 
us to put some money in the pot and have somebody who really 
knows the product come over here and produce it and make it , 
and have us market it, which we're good at. It did fit each 
person's expertise. 

We helped them look for land, and they ended up going in a 
whole different direction, part way between Santa Maria and 
Paso Robles. They wanted the chalky soils like they have in 
Europe, and they also wanted it near the coast for high acid 
levels, which are better for champagne flavors. I think they 
made a wonderful move. They're not in Napa, like everybody 
else who came here, where I think we have a little heavier 
Chardonnay and a little different Pinot noir. I think they 
made a great move. We've been called the most French-like 
champagne made . 

This year we have sixteen thousand cases, we're in our 
fourth cuvee. We'll produce thirty thousand cases as full 
production. 

Then we use the old original pressoir wooden vats, the old 
kind they don't even use in Champagne any more. So it's all 
hand-pressed in the old wooden presses, which makes a 
wonderful, really clear juice for the fermentation. 



62 



Moone: So it's been a good economic venture and a good quality 
product. It's a neat little winery. 

Jacobson: Is the French expertise anything that Beringer winery hopes to 
benefit from? 

Moone: No, I don't think champagne products help us premium wineries. 
In fact, I think they hurt us because you can't be two things 
to people. It's like Cadillac having a sports car; that's 
crazy. Call it something else and market it as something else. 
I think the likelihood of somebody liking both products is 
remote. I think they'll like one, and then when they taste the 
other they won't like it. Ergo, they won't go back and buy the 
other one; they've been disappointed. So I think they're 
apples and oranges. Other wineries feel differently about 
that, obviously. They feel it makes a great image-booster for 
their winery or something. I think it really is harmful. 

Jacobson: How does the Maison Deutz partnership work? 

Moone: We own one-third of the asset, which is the winery. The 

vineyards are owned by a man named Jean Tardivat, and he's a 
one- third partner in the winery. Then Champagne Deutz from 
France owns a third of it. We do all the marketing, which is 
another profit center. We also run the retail tasting room. 
So it makes for a nice arrangement. Basically it's a balancing 
act; we're the marketing/sales people, Tardivat brings the 
grapes to the party and the capital for that, and Champagne 
Deutz brings the expertise on how to make champagne. So all of 
us bring something to the party. 

We were fortunate in the way we got into it, in that we 
market Champagne Deutz for the United States . It was our 
opinion that Maison Deutz could not be marketed without 
Champagne Deutz as a companion. However, I didn't want to 
enter into a marketing arrangement where we would do all the 
work and birth this wonderful project, and then have them shake 
our hands and say, "Thank you very much." The reward for that 
effort had to be something more than just what we could make on 
the marketing arrangement. And they agreed, so they said, "How 
would you like to be a full partner?" 

As the winery was being built up for a couple of years and 
was just about ready to bring its first release to market, we 



63 



actually were able to come in on the original book value of the 
winery. It was very nice of them to let us in as a full 
partner at that stage, after this had been put together. We 
came in as a late partner, and it's been wonderful. 

Jacobson: Is there any confusion between the Champagne which is a French 
product and the Santa Barbara product? 

Moone: I don't think so. It's a little early to tell because it's so 
small. It's mostly been in Los Angeles where we have both of 
them heavily marketed. Around the country we haven't really 
introduced Maison Deutz until just recently. I wouldn't think 
so. I mean, there are Napa mountains and French mountains, and 
there's Chandon and Moet Chandon. I think there are enough 
around now so that they are literally all here with some kind 
of French product and a U.S. product. So I think in the 
consumer's mind they know it's California. It certainly says 
so on the label. You might confuse it in the taste, because 
it's a very, very good product and very French- like. 

Jacobson: Do the French ever take it back to France? 

Moone: They haven't yet. We have sold some in Japan; just a little 

teeny bit went over there. I'm not sure what the perception of 
California-French sparkling wines will be around the world, 
whether they'll be received or of interest. Probably not. The 
French French Champagnes around the world will probably be the 
ones that travel for a long time. 



Acquisition of Souverain Cellars 



Jacobson: In 1986 you bought Souverain Cellars. How did that come about? 

Moone: It came on the market. I had a tremendous interest in getting 
a winery in Alexander Valley or Sonoma. I've really liked 
Alexander Valley Cabernet Sauvignon. I've followed it for 
years. Like, Justin Meyer's Silver Oak 1981 is wonderful. 
You'll notice that you see a case of Silver Oak sitting over 
there [laughs]. This interest was not just passing; we were 
the second bidder on Chateau St. Jean, as an example. 

The strategy developed as Beringer began to reach its 
maximum capacity. With our wonderful organization and 
marketing, sales, and production people, why would we just let 



64 



it sit here and not use it? There was also the desire to move 
to new appellations, because I think, long-term, Alexander 
Valley will be known for a couple of grapes, Napa Valley's 
going to be known for a couple of grapes, and Santa Barbara is 
going to be known for a couple of grapes. Our interest was to 
get into each of those appellations, and to enter the sparkling 
category. So we've done all those things. 

So it was strategic to look to Sonoma. In addition, a lot 
of the Beringer White Zinfandel grapes come from Sonoma, and 
those growers wouldn't bring them over the hill here to Napa 
forever, we knew that. If we could get a large facility that 
our growers could use, where we could crush the juice there and 
then bring it here for fermentation --or ferment it there and 
then bring it here --it would be a wonderful continued source of 
Beringer White Zinfandel. 

That brand at the time had been growing, so we needed more 
capacity. We didn't want to enlarge the Beringer facility any 
more. So for all those reasons we went to Chateau Souverain. 
We bought it for $10 million, and sold off part of the assets 
for about $3 million and capitalized it at just a little under 
$7 million, so it was just a wonderful, wonderful acquisition. 
It just couldn't be built for that; maybe today it couldn't be 
done at all, with the large ponding systems and everything. 

So that was the strategy, and from there it was to 
revitalize Chateau Souverain. It was never in, say, as bad 
shape as Beringer was back in the sixties, but it was in bad 
shape. We wanted to revitalize it with great quality wines, 
and to feature the restaurant over there. The wonderful 
marketing vehicle was their restaurant. We had our chef 
program here; we had a great chef who needed a place to go and 
grow, Gary Danko, one of Madeleine Kamman's proteges. We put a 
million dollar extension on the restaurant. Have you been 
there? 

Jacobson: No, I haven't eaten there, but I've tasted wines over there, so 
I've seen it. 



Moone: The restaurant is just fabulous. Gary's phenomenal. The 

restaurant has been on the cover of the San Francisco Chronicle 
food section two or three times, and Gary has been on the cover 
of Wine Spectator, as you saw. And he just got named Food and 
Wine magazine's Top Ten Chef. So the place is packed. We're 
actually making money on the restaurant, believe it or not. 
It's unbelievable. Even I have to know somebody to get in 




Chateau Souverain Chef Gary Danko, 1989. 



65 



there on Saturday night now! Who'd have ever thought that? 
the restaurant's doing fabulous, and it's adding a lot of 
prestige to our venture. 



So 



The vines we took down to 65,000 cases, and this year 
we'll sell 130,000 cases and maybe a little more. We're right 
on track to bring it back to where I'd like to be: about 
200,000 cases and maybe $10 million in revenue. I'd be real 
happy at that level. In addition, we make a lot of money there 
because we run it at full capacity. We've surpassed it because 
of the White Zinfandel from Beringer. So it's a great 
opportunity for us that we can develop this business without a 
lot of profit constraints. 



Acquisition of Asti Winery 



Moone: As our volume has grown, we had a chance to buy the Asti winery 
up the street, which I bought last year. We'll actually crush 
more grapes at Asti than we will at Chateau Souverain, and it's 
at full capacity. That was a wonderful buy. We bought that 
for $6 million, which included 340 acres of bench land which 
we're planting in Cabernet sauvignon. The land alone was worth 
the purchase price, and I can't believe nobody bought it except 
us [laughs]. It was wonderful. 

Jacobson: Was the land primarily what you bought it for? 

Moone: No, we bought it for the excess capacity in the North Coast 

that we needed. We'll crush 18,000 tons there. It's going to 
be a big facility for us. We'll actually be adding capacity at 
Asti next year. We've done a lot of demolition and cleaned the 
place up, and we have no intention of operating it as a winery, 
or a brand located in a winery. It's just to fill in our needs 
for excess crushing capacity and to plant the vineyards out. 
We've planted the first eighty acres, and it's just gorgeous- 
all bench land that will be all Cabernet sauvignon, and we'll 
drive that for Chateau Souverain. 



66 



Chateau Souverain Brand 



Jacobson: How does the Chateau Souverain brand fit in, then, with your 
wine portfolio? 

Moone: Really well. It's our entry from Alexander Valley and Sonoma. 
Distributors need an entry from Sonoma. It's interesting to 
look in Sonoma- -there really aren't a lot of large wineries 
over there. I think one of the largest is probably Chateau 
St. Jean, which puts out about a couple hundred thousand cases, 
and Clos du Bois is a couple hundred thousand, and we're a 
hundred and thirty [thousand]. I think we're probably number 
three and heading to number one fast. We'd like to be the 
largest in Sonoma, and also to be the best. And to taste our 
'86 Alexander Valley Cabernet, it's as good as Justin's [Justin 
Meyer's Silver Oak] '81. It's sensational, really good. So 
we're on our way. 

Tom Peterson's the winemaker-- fabulous , fabulous 
winemaker, yet to be proven in the North Coast. But Professor 
Olmo called him the number one graduate he's ever had from 
Davis. He's really bright. He was a Stanford undergrad (Olmo 
trained him at Davis) and had been research enologist and 
manager of grower relations, as well as winery production 
manager, for the Monterey Vineyards for Taylor Cellars before 
he moved up here. I think we got a real diamond, and he'll be 
shining publicly soon with a lot of talent. 

We're doing the front yard at Chateau Souverain as I 
speak. We're going to put a big gate in, and we're putting 
trees all up the road, removing the road and cleaning up the 
creek. We're putting a big balustrade staircase in, and it's 
going to be just gorgeous. We're lighting it all at night, and 
you can drive up there. And we're planting the whole vineyard 
in Cabernet sauvignon in front, so it will be a beautiful, 
beautiful place. 

By next spring it'll be something. Oh, and we're putting 
a slate roof on the building, too; the whole building will have 
a slate roof. We're making it a little more chateau- looking, 
and a little less of the Dutch kiln look, so that will change 
its appearance quite a bit. It will be kind of a neat place 
two or three years from now, when it all comes together. It's 
a very long-term play, but I think a very good one. 



67 



Jacobson: You changed the name from Souverain Cellars to Chateau 
Souverain? 

Moone : Yes, I like the way Chateau stacks on Souverain, the way it 

looks. And it separated them from us. It's interesting that 
it was the original design of Souverain to be called Chateau 
Souverain. When you go way back to the 1940s, their original 
brand plans all had Chateau Souverain as where they were going 
to take it for their upper-end wines. It's kind of neat; 
that's what happened. It wasn't real original, we Just liked 
it [laughs]. And, seemingly, there are more chateaux in 
Sonoma. It's a word they use over there a lot more. You know, 
Chateau Diana is there, and Chateau St. Jean; there are quite a 
few. So it seemed to sort of fit the whole feeling of the 
place. And it is a chateau- looking place, too, so it did 
everything we wanted it to do. 



Acquisition of Estrella River Winery 



Jacobson: 
Moone : 
Jacobson: 

Moone : 



In '88 you also bought Estrella River Winery. 



We sure did! [laughs] 

How did that come about? 
purchases . 



There have been a flurry of vineyard 



Yes, we needed vineyards. We loved the vineyards; that was 
vineyard -driven. It's an eight hundred -acre Cabernet sauvignon 
vineyard there. It's all BV cloned and is of tremendous 
quality. Paso Robles is a hotter area, as you know, than the 
Santa Barbara coast. Our interest in that was to get some 
Cabernet sauvignon for our Napa Ridge brand, and at the same 
time it got us entrenched in the Santa Barbara region, which 
was our third step of the appellation dream that I started 
with. It allowed us to do that. It was in bankruptcy, and it 
was a very complex acquisition; a lot of people at each other's 
throats made it real complex. Anyway, we finally pulled it off 
and bought it for $13 million. 



68 



Meridian Brand 



Moone : We had a consultant here named Chuck [Charles] Ortman, who had 
been working with us on Chardonnay for about three years. 
Chuck, you know, did St. Clement and was a winemaker at Spring 
Mountain and Heitz Cellars. He owned a brand called Meridian, 
which he was going broke with. It was a horribly under 
capitalized deal and it needed a lot more capital. He wanted 
out of that, and he just wanted to become a winemaker. His 
daughter was at Cal Poly San Luis Obispo, and he'd made a wine 
in Edna Valley from the [Jim] Nivens grapes, so he knew the 
area well. 

So we bought the brand, and I loved the name Meridian. 
We're redoing the winery and putting in $8 million worth of 
changes this year to add capacity for our vineyards. It's 
going to be a complete new introduction. We've sold off all 
the Meridian wines that existed, for the most part; there are a 
few left. In January of next year we'll introduce Meridian to 
the U.S. marketplace. It's got a very exciting label concept, 
and it'll come out with an Edna Valley Chardonnay and a Santa 
Barbara coast Chardonnay. Then we'll add Cabernet and some 
other wines- -some Rhone-style wines- -as we go along. Chuck 
Ortman 's moved down to the Santa Barbara area and is a full- 
time winemaker for us. He's moving his family there. 

So the transition was wonderful. Here we had Chuck 
Ortman, one of the greatest winemakers in Napa Valley. He had 
a great name and is a person who knows those grapes. It's the 
first time somebody of his stature has gone to the Santa 
Barbara coast. Generally they desire to come here. We're 
really convinced that we can make fabulous, fabulous wines 
there. So we're investing in that area, and that'll be the 
third leg of our California triad, if you will. 

Jacobson: Does Meridian, then, aim to be a premium wine brand, along with 
Beringer? 

Moone: Yes, it will come out at a high price. It'll come out at a 
higher price than Chateau Souverain, but less than Beringer. 



69 



Other Vineyard Purchases 



Jacobson: But some of the vineyards were purchased to provide Napa Ridge 
with grapes? 

Moone : Yes. If they all sold as Meridian, we'd obviously be very 

happy [laughs]. But that would be a lot of Meridian at that 
price. If it does, wonderful. We bought vineyards down there-- 
we started off with our Cat Canyon vineyard, which was a seven 
hundred-acre parcel with four hundred acres planted to grapes. 
Planted in '81, one of the original McCarthy vineyards, it's 
just a gorgeous facility- -a great facility. And we bought it 
at a great value . 

When we did that, a couple of people called us about it-- 
were we interested in some more? And we saw some things that 
were really interesting, so we bought Sisquoc Vineyard from the 
Nivens . It was a very different kind of vineyard up there. 
It's a real sandy soil there on the Sisquoc River up on the 
plateau. It has a quick-ripening history to it, which give it 
real unique taste characteristics. 

Then we bought the San Antonio Vineyard, which is 22,000 
acres of grapes. It's huge. It has, I don't know, nineteen 
lakes. That's in Santa Maria. It borders up on the town of 
Santa Maria and the Vandenberg Air Force base property, and it 
runs four and a half miles south of town. It's a 4,500-acre 
parcel of land. It's just one of the great pieces of land in 
California. We just really got a great buy on that one, too. 

So we're in these vineyards at a price where we can farm 
Chardonnay for a long, long time at a great price. We're 
grafting to Chardonnay as fast as we can- -literally, seven or 
eight hundred acres a year. They're about half Chardonnay as 
we bought them, and this year they'll be about two- thirds 
Chardonnay. Next year they'll be about three -fourths 
Chardonnay . 

Chuck Ortman's just thrilled about the quality from all of 
these, so our Santa Barbara coast Chardonnay will be a blend of 
those three vineyards, and they're just fabulous. Of course, 
the '87 Edna Valley, in the Orange County Fair, just got the 
award above the gold medal, the four gold. So it's coming out 
with all flags flying. We'll have some great wines. 



70 



jgy for Developing 



Brands 



Moone : We're not volume-oriented down there. Again, it's the same 

strategy that we have at Chateau Souverain. Underneath Chateau 
Souverain we have the Beringer White Zinfandel supporting the 
winery. Underneath the Meridian winery we have the Napa Ridge 
wines supporting the winery. So the operation will grow and be 
cultured, and it will take its own time and we don't have to 
rush it. And we'll birth it. My hope is that in ten or 
fifteen years, when the other wines may not be quite as 
important, we'll have Meridian, Chateau Souverain, and Beringer 
all established, all on their own, all very profitable, and all 
paid for. 

Jacobson: Do you see the Napa Ridge brand as not being as important in 
ten to fifteen years? 

Moone: No, I see it being more important than today. But it won't 

matter. The idea is to birth the assets and to make sure that 
we've utilized the assets. So I'm more asset-driven and 
strategically driven on the upper end than I am volume-driven 
on the lower end. Our real goal is to colonize these and to 
have not just Beringer, but three Beringers--one called Chateau 
Souverain and one called Meridian. 

Jacobson: Were any of the vineyard purchases in Santa Barbara intended 
for the champagne? 

Moone: They could be, of course. They really could be, although the 
champagne facility is six hundred acres of its own and has 
about 150 that are planted now. So there's plenty of room to 
grow there. I think we'd probably like to keep that as estate 
if we could. 

I think the champagne or sparkling wine category's going 
to be tremendously crowded in California in the next five 
years. All the big, well-known wineries are producing a 
hundred thousand cases each for a market that's about a half a 
million cases right now. It's going to be a blood bath. So 
we're going to take it real small [laughs], and keep our image 
while they end up flopping around. Then, if we want to expand 
it, we'll look at it in five years. That's kind of our 
strategy; we're going to stay small and watch the big boys go 
chop each other up for a while. 



71 



Foreign Investment and Long-term Business Orientations 
[Interview 3: 26 September 1989 ]#// 



Jacobson: Wine Spectator ran an article on foreign investors in September 
1989, commenting on how foreign investors have the financial 
muscle to cover for fifteen to twenty years of negative cash 
flow with all the improvements and whatnot that they make. How 
well does that generalization apply to Beringer's success 
story? 

Moone: I don't know. I don't think being able to withstand negative 

cash flow is strictly a foreign concept. I would cite the fact 
that there are 640 wineries in California now, and most of them 
are not foreign owned, and they certainly have negative cash 
flows that these people are dealing with in setting up for the 
future. Certainly wineries have negative cash flows at the 
start. Because you're starting literally everything from cash-- 
for example, you don't get revenue from a Cabernet Sauvignon 
vineyard for eight years. (You get grapes in the fifth year, 
and then you age it three years in the winery.) That's a long 
carry. But there are plenty of people willing to do that. 

To me, it's more of an industry segmentation. IBM, as an 
example, is a technology leader that's taken its product around 
the world. The French have been dominant wine people who have 
taken their products around the world and are now investing 
here in vineyards . So I look at it more as an industry 
phenomenon than, perhaps, a "foreign" phenomenon. Now, new 
investors have come into the area- -the Japanese- -and their 
investment strategy I think is more drink-oriented, a la 
Suntory and Sapporo, which is a large beer company. There it's 
a product diversification, with marketing back to Japan on the 
products as a side benefit. I think we're also seeing the rich 
Japanese investor, much like the rich U.S. investor here, who 
wants to own his own winery because it's pretty chic. So 
you're seeing some of that. 

It's pretty hard to simplify why somebody's more 
successful. The one thing that leads to success in the wine 
business is obviously to know that the business is long term, 
and that you're not here on the short term. People who come in 
with a good long-term understanding of it seem to do better. 

I guess the gist of that article is that large U.S. 
corporations have not been successful in the wine business, in 
that they have quarterly balance sheets and quarterly earnings 



72 






statements, and their stock must go up every quarter or the 
president is fired. With that kind of "go, go" environment, 
they're not going to get into a business like this. Well, 
that's a shame. If they mean that, in terms of performance, 
then that's true. They're at the mercy of the people who make 
investment decisions on computers, and not necessarily on the 
long haul. I think the European and Japanese investors who buy 
stock are much more long term in their orientation, and they'll 
stay with a company longer. 

Jacobson: That's a very interesting point. 



Ownership Changes 



Jacobson: I noticed that there were a lot of ownership changes here at 

Beringer. General Shopping was an owner at one point, and then 
the Labruyere family. What was the influence of those owners? 

Moone: A lot of those were fairly strange. But the basic problem 
there was that Nestle operated in a lot of businesses that 
entailed alcoholic licenses, from restaurants to hotels. So 
under the tied house laws the company couldn't be owned by 
Nestle. That was in what I would call the formative stages of 
their involvement with us . They sold parts of the company off 
over time so that the company didn't conflict with these laws. 
Since then the laws have been basically rewritten and changed, 
so we bought ourselves back. Basically the asset always stayed 
with Nestle, however. 

Jacobson: Were all those changes basically on paper, or was it more than 
that? 



Moone: They were real sales, but they were sold off as marketing 
rights, as an example, as opposed to the asset. So the 
marketing of the company was held by General Shopping and they 
did the marketing of the product in the U.S., just so that it 
wouldn't conflict with those tied house laws. 

Labruyere, in fact, is still very interested in our 
company. While it is wholly owned by Nestle, actually as of 
the first of this year, he's become an investor in some 
vineyards. We like him around. He's really a sharp guy. He's 
a vineyard grower in Macon, France, and is one of Georges 
Deboeuf's very best friends, and also Paul Bocuse. So when 



73 



we're in Europe we interface with him, and he's been very 
helpful to us in developing our European business. He's sort 
of a confidante of ours. 



Jacobson: What about General Shopping? What was it like when they were 
the owners? 

Moone: That was just for a short period of time. It was more of an 

off-shore transaction of ownership. It didn't affect anything 
here. 

Jacobson: So other than with Labruyere there was no noticeable impact 
with any of the other ownership changes? 

Moone : No . 



74 



IX EXPORTS 



Jacobson : 



Moone : 



I wanted to ask you about exports , 
markets? 



What are the most promising 



Exports are important to us . I am driving our company towards 
exports. The reason for that is that I think if you are going 
to be a successful company in the next decades, you'll have to 
have a world reputation in wines. Our desire is to establish a 
worldwide reputation, and obviously to do that you have to be 
in all the great markets of the world. 



European Market 



Moone: We began this venture, really, going back three years ago, and 
it's been very successful. I'll take them in segments. We're 
in Europe- -we have a warehouse in Belgium. Our most successful 
countries are Denmark, Sweden, England, and Switzerland, but 
we're in all twelve of the European countries, including 
Iceland and Italyfrom Reykjavik to Rome! --with varying 
degrees of success. 

Our idea is to sell one case correctly, as opposed to a 
hundred cases incorrectly. So we're there to get in the right 
restaurants and establish our reputation. It's very good. We 
sold nineteen thousand cases of Beringer last year in those 
markets, and this year it will be around thirty to thirty-five 
thousand cases, which is almost all Chardonnay, Sauvignon 
Blanc, Cabernet Sauvignon, and a little bit of White Zinfandel 
in England. We're real happy with that, and we plan to expand 
our brands by introducing Chateau Souverain and Meridian in the 
upcoming years . 



75 



Japanese Market 



Moone: In the Pacific Rim countries, Japan is our next large target. 
We've sold six thousand cases in the last calendar year in 
Japan through the Godu Shousay Company. It's been very 
successful. There White Zinfandel is the largest seller, and 
Chardonnay is the second biggest seller. I really feel that 
Chardonnay is going to be a huge item in Japan in the long 
term. 

We market Chateau Souverain through the Snowbrand Company. 
There we introduced it in November of last year, and they did 
two thousand cases through August of this year. So I'd call 
that a very successful introduction. Our projections are 
30+ percent growth. We obviously were exceeding that, but now 
with a larger base we'll grow at least 25 or 30 percent this 
coming year. So we're very optimistic about Japan. 

In fact , as you know I just returned Saturday from a week 
there. It's very interesting. California wines are now the 
number two selling wines; we passed Germany. The standard of 
excellence is still France, and they look to France as their 
leader, if you will. As an example, they go to the Hospice de 
Beaune auction. They're flying ten thousand cases of 
Beaujolais wine to Japan. It's a huge event. We need to get 
them to things like the Napa Valley wine auction and do some 
more California promotions to get that comparison to the 
French . 



Jacobson: 



We basically sell in the one to two thousand yen market, a 
very popular price; a thousand yen is about eight dollars. 
That's a reasonably priced market, but on the upper end the 
Japanese tend to pay five, six, and seven thousand yen for 
French wines and not California wines. We need to get over 
that hurdle in the next couple of years . 

What kind of wines are sold in the one to two thousand yen 
market? 



Moone: Oh, the Beringer White Zinfandel, as an example, is sixteen 
hundred yen. Most Californians are twelve hundred yen. Our 
Beringer Chardonnay is twenty-four hundred yen, as is our 
Cabernet Sauvignon. That relates to, say, a Gevrey-Chambertin 
and a Pouilly-Fuisse , so we're pretty attractively priced 
there- -competitively priced. The Chateau Souverain Chardonnay 
sells for two thousand yen, and you might see a Wente 




E. Michael Moone at Beringer winery, 






76 



Chardonnay for sixteen hundred yen. It's relative to what's 
here. And we're getting some action. 

Jacobson: What do you think accounts for the growth in popularity of 

California wines to the extent that they have surpassed German 
wines in Japan? 

Moone: Well, the White Zinfandel in the taste spectrum certainly has 
been a big contributor. Another one is the huge number of 
visitors to the U.S. --Hawaii and the ma inland --and to the 
California wineries. We have a big long-term advantage, 
probably even on France because I think the Japanese look to 
California as high image in clothing and food. Certainly the 
French restaurants have been there for years, so they have this 
kind of old guard quality, and we need to work hard to overcome 
that. We have the big advantage, though, with the number of 
people visiting us. If we handle that correctly, Japan will be 
a great market for us in the long term. 

We're in Hong Kong and Guam and places like that out there 
that are fairly small- -mostly hotel business. 



Trade Barrier Issues in Canada and Japan 



Moone: Canada is the other major opportunity for us, and Canada has 
been very discriminatory against U.S. wine products while 
pouring beer and spirits across our borders and protecting a 
really ill-conceived wine business in Canada that has, 
basically, one or two percent Canadian grapes and blends cheap 
wine from around the world. They're not allowing U.S. 
listings. As an example, we have twenty-eight listings per 
province in Canada; the French have four and five hundred 
listings. So we need to break down those trade barriers, and 
that's all it is in Canada. It's going to be a huge market 
when we do. 



The new trade agreement that Agriculture Secretary Clayton 
Yeutter did is good, but the provinces aren't going along with 
it, as you probably know. Canada has an unfair trade practice 
with the U.S. wine industry. We filed on that, and we'll 
continue to move forward on that. When the doors finally come 
down, Canada will be a big market for us. My bet is that we 
would easily get to 10 percent of the total Canadian market, 
which would be four million cases of wine for the U.S. I'd 



77 



like to see that occur within a couple of years. I'm active on 
that in industry affairs; I keep the pedal to the metal on that 
one. 

Jacobson: Trade barrier issues in Japan must be of some concern, too. 

Moone: Well, they treat us pretty fairly on wine. I mean, they treat 
us like the French, and they treat us like anything else. They 
protected a small business there for a while, but basically I 
don't see any barriers to entry there. They're very into 
things like sorbates; they're death on those, so you want to 
make sure you have sorbates less than a hundred parts per 
million or not have them at all in your product, which is what 
we're doing. 

The marketing distribution barriers are tough, but there's 
a lot of interest in California wines, so if you're over there 
and aggressive you're going to get someone to represent you. 
You have to know the channels of distribution, and you have to 
understand that Japan's a long-term market. 



Wine Marketing and Distribution in Japan 



Jacobson: 
Moone : 

Jacobson: 
Moone : 



Jacobson: 



I would think that getting the right person to represent you in 
Japan would be important, because the distribution channels are 
so complicated. 

That's correct. We have wonderful companies there that 
represent us, so we're really pleased with them. They're two 
of the best marketing companies in wine and spirits in Japan. 

How do they go about marketing your wines there? 

They do the same things we do here! They have little displays 
they build, they have consumer offerings for wine openers and 
T-shirts and bottle accessories, and mail-ins. Actually, their 
laws are even a little more liberal than in the U.S. There 
they can do some of those things, and in some of our states we 
can't do those. They have contests for their sales people, 



they have trade tastings, consumer tastings, 
wine experts who write about wine. 



Then they have 



Do they place wines more in restaurants and hotels than in 
grocery stores? 



78 



Moone : No. They have to have special licenses, but the grocery stores 
are getting those. In fact, I was just in one independent 
grocery store in a middle class area, a really nice little 
independent store. They were selling seventy bottles a month 
of Chateau Souverain off the shelf. It was very nice. And, of 
course, they are in hotels. 

We just sent our chef over; Pat Windisch, our executive 
chef, was in the Palace Hotel, the most prestigious old hotel 
in Japan. They had large pictures of Pat all over the lobby, 
and a huge blow-up of our Rhine House, and they called it 
California Wine Month. They had a menu of California wine and 
cuisine for the whole month. It was a fabulous promotion. We 
sampled thousands of people in a nice environment . Very 
successful. So they do things like that. 

Jacobson: Is the grocery store just now beginning to open up to 
California wines? 



Moone : 



Yes. 



Wine Marketing and Distribution in Europe 



Jacobson: In Europe, are there different challenges involved in, say, 
getting on the wine list in restaurants? 

Moone: A little bit. They have a section on wine lists called New 

World Wines. There they put U.S. wines, Australian wines, and 
Chilean wines . "New World" is anything other than Europe 
[laughs]. So that's where you find us. We'd be like an 
Alsatian wine would be here- -you'd see it on some wine lists, 
and you'd try it once in a while with dinner, but we're not a 
mainstream item at all. 



Where we're selling in Europe is in retail stores and in 
hotels; hotels are doing California promotions. Airlines are 
important in sampling a lot of first class passengers; whenever 
they fly to California, they'll have a Beringer Chardonnay or 
Cabernet Sauvignon in first class. We have that now with 
Swissair, as an example, and with Delta on their international 
flights. 

Then if you just enter the taste spectrum of the English 
market with Sauvignon Blancs , where Sauvignon Blancs from 



79 



Jacobson : 
Moone : 



Jacobson: 



Moone : 



Jacobson: 



France got very high in price, and suddenly the U.S. is a 
dollar cheaper per bottle, and that British purveyor likes 
ours, they'll really sell a lot. It's a little more retail- 
oriented in Europe than restaurant -oriented. 

It's that price -sensitive a market? 

Sure. They're purveyors, and they brought wine to England from 
all over the world for years. While France has been their 
neighbor, we can land a case of wine in London with freight 
almost the same as the French shipping across the channel. So 
we're very competitive there. They love clarets, and we make 
wonderful quality Cabernet Sauvignon. They're going to pay 
twenty dollars for a French wine, and if they see one of ours 
sitting there for fifteen dollars and it's good, they're going 
to buy it again. So, yes, we're making strides there. 



What about the EEC and the Common Agricultural Program? 
they change how well California wines do in Europe? 



Will 



Oh, things are going to change. Certainly the Spanish wines 
will become very prevalent in Europe, and Italian wines will 
become very formidable branded items. The French will probably 
suffer, and I see California probably holding our own in that 
environment. But I don't see the French selling a lot more 
wine in Italy [laughs], and I don't see the French selling a 
lot more wine in Spain. I think wine's very provincial. 
However, the French, given a good-valued, well-marketed product 
in a supermarket, won't care if it's French or not. Whereas 
the Italians might. I don't know, I'm just guessing. But I'd 
say it will certainly change. 

Will California lose much of its price advantage that it now 
has? 



Moone: I don't think so. No, 
for us, equal access, 
now. 



I think there'll be a wide open market 
Europe's basically wide open to us right 



Targeted Export Assistance Proeram 



Jacobson: Have you ever taken advantage of the Targeted Export Assistance 
Program? 



80 



Moone: Very little. Some people do, I know. They write off their 
trips and things like that. We just haven't done it. I 
suppose we should. 

Jacobson: More paperwork than it's worth? 

Moone: Yes, I think so. It pays for my trip; I have to get all these 
forms and get five hundred dollars back. But I forget about 
it. I'm not slighting the fact that the funds are there. I'd 
much rather see the funds spent on advertising like they have 
in Japan and the promotions they did. They took the U.S. boat, 
The California, over there. There are just lots of promotions 
that the industry's done that are very, very good for us, 
basically via the California Vine Commission. Those 
expenditures have just been terrific, and they total about 
$10 million this year, you know. 



Developing Brand Recognition in Foreign Markets 



Jacobson: How difficult is it in a foreign market to develop brand 

recognition? To what extent have you had success in that? 

Moone: We've been successful because we make great wines, and I don't 
say that facetiously. Our Private Reserve Cabernet Sauvignon 
can travel anywhere in the world and be as good as anything 
made anywhere , and there are people who love that kind of wine . 
So the wine has to speak, to a great degree. Establishing your 
own image, though, takes years. We're so new in this, at three 
years, to say that we have some great image. We have a nice 
image in the countries that we operate in, but certainly not 
what we'd like it to be, nor where it will be in another 
decade. 

We have people in those markets; we have a full time 
person in Europe who does nothing but represent us, hold 
tastings, and talk to people and consumers. We'll be hiring a 
Japanese person to come to the U.S. here and work with us for a 
year. Then we're going to have that person go back to Japan 
and be our manager in Japan. Next summer or so we'll hire 
somebody, and our volume will be at the level we can support 
them two years from now. So we're going to have our own 
employee in Tokyo within two years. We're making those kinds 
of efforts. They start adding up and paying off. 



81 



Japanese Distribution Companies 



Jacobson: I would think it would be difficult to rely on the distribution 
companies in Japan. 

Moone: Veil, they're awfully good. They're such dedicated workers, 

with high standards. They kill for us every day in every way. 
They're very good. If our distributors in the U.S. were as 
good as they are in Japan, we'd sell twice as much wine. 
They're very good. 

Jacobson: It's not a problem with their having many, many products to 
represent? 

Moone: No, actually they have fewer products. Like in California they 
only take one or two. One of our distributors, Monmoussen, the 
big brand, sells about forty thousand cases. Beringer is 
number two at six thousand cases. The other biggest brand is 
the German Golden Oktober. They sell twenty-five thousand 
cases, and they believe Beringer will outsell that someday. 
No, they're very small, loyal, but they're parts of huge 
companies and have all kinds of distribution sub-networks. No, 
that's not the problem. In fact, that's the solution. 
[ laughs ] 



Benefits of Import Experienced 



Moone: I think it's important to know that one thing that has helped 

us in exports is that we are an importer. We understand how to 
represent a brand here, so we know what our expectations are 
"there." The fact that we sell Travaglini Gattinara in the 
U.S., and the way we handle and comport ourselves in that 
brand, shows us and gives us the expectation that we would have 
on the outside. So we do understand; we've been in their 
shoes . 



Focus on High Image Wines 



Moone: Our sales will be in excess of $1 million this year in exports, 
which is just about 1 percent of our total sales. I would like 



82 



our export sales to be approaching 3-4 percent of our gross 
sales. It's going to skew by product, obviously, so right now 
our goal is that ve would have at least 10-12 percent of our 
Cabernet Sauvignon be export, as an example, because it's a 
high image wine that travels around the world, et cetera. But 
we don't want to disrupt the U.S. market, where we're also very 
short of Cabernet Sauvignon. So we're balancing this by item, 
if you will. We're looking at it in all ways to balance our 
total business. 

Jacobson: What is the percentage breakdown for the other wines for 
export? 

Moone: Oh, they would be lesser. I could see 5-10 percent of our 

Chardonnay business, maybe 10 percent of our Sauvignon Blanc 
business. Then we'd be down to 1-2 percent of our White 
Zinfandel or Chenin Blanc business, those kinds of things. 
While the total sales of the company are small, individual 
items could be quite significant. That's the point. 

Jacobson: Is part of the idea to get your absolute highest quality items 
out there? 

Moone: Highest image, highest quality items, exactly. Those are the 
wines we want to have establish our reputation and be a 
beachhead for the brand for years to come . 



83 



X CULINARY ARTS 



Scholarships for Chefs 



Jacobson: All right. Shall we move on to culinary arts? Beringer has 

been very active in establishing a culinary arts program here, 
launching it, I believe, with some scholarships for chefs in 
1981. 



Moone : Yes, we started off with giving scholarships to the Culinary 
Academy in San Francisco. The idea was to develop culinary 
cuisine centered on freshness and local availability of product 
to marry with our wines . This concept was really brought to us 
by Tor Kenward, our public relations director. I'm a great 
lover of Burgundies , and when I went to Burgundy I had Boeuf 
Bourguignon and Burgundy. I had a tear in my eye, and I 
thought, "This is really neat." Cat on the hearth, and all 
that stuff. [laughs] Straw on the walls. I said, "We need to 



have this in California." 
of this started. 



That's how that recipe or food part 



As we moved into that program, it became obvious that it 
was good for us. Our customers loved it, customers being wine 
writers, retailers, restaurateurs, and good friends of the 
winery. We kept enlarging that, moving more and more into food 
and finding out more about it. We found out that the wine that 
won our tasting, as an example, wasn't always the wine we liked 
with our food. That led us to believe that we needed to be a 
better food wine. I think the California wines going back to 
that time were a little clumsy and heavy and overly oaked. 

So we started adding more emphasis to tasting with food, 
and wines that go well with foods --and vice versa, making foods 
that went better with our wines. That's been a happy effort. 



84 



I think we're totally centered, as our wine is a food in our 
minds; it's to be enjoyed with a meal. 

That's led us to where we now have Madeleine Kamman here, 
who is one of the world's great chefs. She has this American 
School for Chefs at Beringer. Our executive chef is a protegee 
of Madeleine, Pat Vindisch. She's been in Europe and most 
recently in Japan, as we discussed. Her other protege is Gary 
Danko, and he's at our restaurant at Chateau Souverain. Gary 
was our executive chef here, and when we bought Chateau 
Souverain with a restaurant, we put Gary there immediately. 
He's just an outstanding chef, as is Pat. 



Hudson House Renovation 



Moone: So we have a wonderful program. We've just redone our Hudson 
House, which was a $2 million adventure. The Hudson House was 
the original house on the site of the Rhine House, built in 
1851 and moved when they built the Rhine House. David Hudson 
was an interesting fellow, by the way. He was a member of the 
Bear Flag revolt who went over and arrested Vallejo. They 
designed the California state flag on that raiding party. They 
stopped off at a whorehouse and got a white sheet and some red 
panties, cut a bear out and sewed it on the sheet, and that 
became the California state flag, which I think is fitting, 
[laughter] Vallejo was really quite cooperative in that, as 
you remember, and invited them all in for a drink and showed 
them how to take him to Sacramento. He went on to become our 
governor. 

Anyway, this house is of historic significance. We think 
Vallejo's even slept in it, et cetera. It's a neat place. The 
$2 million renovation was to have two kitchens, one we could 
teach in and another was the demonstration kitchen. Then there 
would be a state-of-the-art place to eat and serve. We wanted 
to take the old house back to its grand style. So it's quite a 
project. We do have the largest dedication to a food program 
in the Napa Valley. This year we'll serve about ten thousand 
meals. There's no bill for this; it's strictly us 
entertaining. It's at an extremely high level, so we're not a 
restaurant. Whereas at Chateau Souverain we're open to the 
public and have that pleasure also. It's two different 
concepts, both with a lot of interest. 



85 



Chateau Souverain Restaurant 



Moone: The idea of Chateau Souverain is to carve us a segmentation. 
We're one of four restaurants in wineries, so it's a great 
asset for us.^ 

When we took the restaurant over it was doing about 
$600,000, including the Friday night fish fry. It was a sort 
of a profit center for a failing operation, so we closed it and 
redid it. We've added eighty wines of the area. We don't just 
have Chateau Souverain wines there; we have eighty wines from 
the Alexander Valley and our friends at the surrounding 
wineries. The restaurant will do $1.2 million this year, and 
it's by reservation only most Saturday nights. It's just 
drawing rave reviews in every sense of the word, and that 
really makes a nice statement about Chateau Souverain for the 
long term. So it's a marketing asset. 

Jacobson: I believe Chateau Souverain is also doing wine and food 

seminars for the public. How long have those been in effect, 
and what was the aim there? 

Moone: I think it was to broaden consumer awareness of our expertise, 
and to offer something that's entertaining in the wine country. 
That's just a natural extension of our program, and Gary's 
really good at that kind of stuff. He's been all over the 
world and can quickly demonstrate some things to people that 
would be a hands-on approach to cooking. We're only open there 
nights, by the way, on Thursday through Saturday. We do cater 
some nice private events that are very prestigious for us to 
do. And, of course, we're open every day for lunch. 



Madeleine Kamman's School for American Chefs 



Moone: We'll broaden Madeleine's program next year to include a few 

consumers . The current chefs have to be chefs for three years . 
They spend two weeks with Madeleine, and it's limited to forty 
chefs a year. So it's ten classes of four. They would just 
die to spend that time with her. She's really quite a person. 
We had five hundred applications the first year, and I think 



L See pages 64-65. 






86 



she's got over a couple thousand this year. It's quite a 
program, and really we haven't publicized it that much. The 
classes have been magnificent. I've handed out the diplomas at 
two or three of the graduating classes, and they love it. And 
we love the food. [laughs] 



Matching Food and Wine 



Jacobson: To what extent, if any, has the culinary arts program been 
fueled by neo-prohibitionist sentiments? 

Moone: Really, not much. It's been fueled more by our desire to match 
our wines with food. When I travel in Europe- -for example, 
when I'm in Switzerland and have these really light Swiss wines 
with their filet de perch, it's just magnificent. Then you 
come back here and a Chardonnay can taste so clumsy and heavy. 
The same applies if you're in Beaujolais and you have this 
wonderful light red wine with chicken, and you come back here 
and have a real heavy Cabernet Sauvignon. 

You have to say, really, if we're going to succeed as an 
industry, we've got to have wines that people can really 
appreciate with their meal. We need to understand that and 
make wines that are that way. So we're really consumed by 
that, not by "we want to sell more wine with food." And the 
motivation has never been the prohibition movement. I don't 
call it a neo-prohibition movement; I just call it a 
prohibition movement. It's always been here, and I don't think 
it's been all that successful. But I'm a contrarian. 

Jacobson: Has your winemaker, then, changed his style and even his 
approach to making wine? 

Moone: Oh, very much so. We've had consultants here from France, from 
the first-growth winemakers to Georges Deboeuf . Currently Jean 
Louis Monderot is here from Chateau Le Tour, and Georges 
Deboeuf from Beaujolais is here. He works with our winemaker 
on techniques that we find interesting in tasting European 
wines. We have a research facility here with Jim Dotson, who 
has a double doctorate in enology and viticulture and does 
research fermentations --over a hundred each year, speeding .-p 
the information we gain from our own vineyards about everything 
from rootstock to grape type to yeasts to temperature. I mean, 




Madeleine Kamman in the demonstration kitchen at Beringer Vineyards School for 
American Chefs, 1989. 



87 



each of these that he's doing could be a doctorate; they're 
fabulous . 

A 

We're compressing that information, and what we learn 
there on an evolutionary scale we move into our production 
here. We've learned things there on barrel fermentations of 
Chardonnays and must chilling, as an example, that have allowed 
our wines to be more complex, lighter, with more tastes. 
They're better and have more of a lilting taste. Our 
Chardonnays have just gone crazy at Beringer, and the reason 
for that is all this effort we're making. 

It's not just a simple thing, saying that we should make 
lighter wine. People have done that, and they put less alcohol 
in the wine and have less flavor, and they end up with a crummy 
wine. Some very good wineries are guilty of that right now. 
They have no idea what they're doing. It's not as easy as it 
sounds. It never is, obviously. We think we're onto some real 
solid turf for what we're doing with our wines, and it's 
reflected in our business. 

Jacobson: Does Madeleine ever come and taste the wines? 

Moone : Sure, we taste everything. We do things like take a Sauvignon 
Blanc--! know they did this the other day- -and ten bell pepper 
soups. We tasted our vintages of Sauvignon Blanc with the ten 
bell pepper soups (bell pepper goes quite nicely with Sauvignon 
Blanc), and we found one that we liked with that soup. Then 
she took that soup and made a variation of ten more soups, and 
found the one we liked the most there. That's the wine she 
served with that soup. 

So we're technically into tasting dishes. And, of course, 
she's technically so competent that she knows that the taste of 
a buttery Chardonnay is good with something else. I mean, 
she's been doing this for years with French food. Yes, she can 
tell you structurally why something will do something well with 
something, and it will. 

Jacobson: Has she ever made suggestions about winemaking in and of 
itself? 



Moone: No. She's only been here a year. She hasn't done that yet. 
She's really done more of matching foods with our wines. I 
might say that we're at the stage where we've gotten over all 
the rough spots. I mean, I don't think we have the kind of 



88 



wines we had six years ago. She would definitely have said 
something then. 

We had a problem wine this year, in a certain sense. It 
was our '87 Private Reserve Chardonnay. It was very fruity, 
just from the vintage; it was a very strange vintage. That 
wine we really have to watch what we serve with, and generally 
she'll serve an '86 Private Reserve Chardonnay instead of the 
'87. So she just sort of ignores the vintage. [laughs] We 
have a great depth of wines that she can pick from. She can go 
back to '78 Private Reserves, and '77s. Generally, we're 
serving older wines. She has a great range to choose from, and 
she selects the ones she likes. 

I have to tell you, it's the best meal you'll ever have in 
the United States. You'll have to come up here and enjoy one 
of our meals, because it's that good. 

Jacobson: There's nothing like a meal with the wine and food matched. 

Moone: We'll go over there after this and I'll introduce you to her 
and show you around the Hudson House, because it's quite a 
thing . 



89 



XI INDUSTRY ACTIVITIES AND CONCERNS 



Market Development Committee. Wine Institute 



Jacobson: I wanted to ask you about your industry activities. You've 

been involved on the Market Development Committee for the Wine 
Institute for the last three years. What issues have you been 
focusing on? 

Moone: There I've focused on reviving the committee, first of all, and 
focusing its efforts. It was not a real active committee. It 
was basically made up of a lot of PR people from the vineries. 
There were many new and fractured efforts. There was a big 
committee on health, and then we had various prohibition 
concepts. The Market Development Committee was really not 
focused on any of these . There was a huge hue and cry over 
this three-year period to advertise wine as healthful, as an 
example, which I resisted, and which is also illegal- -or if you 
do it, it is quite complex. 

Anyway, I had to guide us through this period of time and 
revive an interest in what I think are the major issues, what 
we should be saying about wine to the consumer. And to get the 
industry together to do it was difficult. To do this we had a 
task force here at Beringer and brought in a guy from the 
Stanford Research Institute, Jay Ogilvy. We had quite a 
session to basically get people focused on what we should be 
doing. We basically got the leadership of the wine industry 
and the Wine Institute here. 



My thinking is that we need to focus on wine as an 
everyday beverage , and make it more part of what America is . 
Now, that's pretty simple. But I don't believe people drink 
wine for health, and I don't believe they'll not drink it 
because it's not healthy- -which I don't believe it is, and I 
don't believe the people who use it would think that. The 
cancer scares we've had when we measure parts per billion; the 
fetal alcohol syndrome prompted labels warning mothers not to 
have alcohol when they're pregnant, which I think is 



90 



informational. I don't think we lose much when we lose the 
pregnant women market . 

I think the concerns of people about what that says about 
wine are exaggerated. They put wine up on this pedestal--! 
mean, I think we're a consumed product that people need to have 
information on. It contains sulfites, and I fought the 
industry to put it on the labels. I think that's a good move 
for those people who want to know about that . 

So while there's been some misinformation generated by 
those things, we need to inform people intelligently and fast 
enough about them. We'll have the same questions come up when 
the new labels start. I think there's a place for consumer 
information on every product today, and wine should be included 
in that. I'm a vocal consumerist, and I think also that the 
fact that we moved our industry to do that has been a 
tremendous defeat for what you call these neo-prohibitionists 
who want to tie us up in knots and do other things with us . In 
fact, by doing this they even reduced our product liability, so 
to me it's been a great victory for us. 

Jacobson: How have they reduced the industry's product liability? 

Moone: When something's on a product that tells you that it's a 

warning, you have less liability than if you don't give some 
type of warning. The fetal alcohol syndrome is more of a 
touchy case because here you have some live, screwed up child 
that is purported to have been caused by someone who drank too 
much, and the jury is sitting there looking at this poor thing. 
Whereas with cigarettes you're dealing with somebody who died 
from cigarettes, but they're gone; they're not there! So you 
can have this great sympathy movement , but in fact the recent 
cases have ruled that people who drink should know that there 
is a danger of getting drunk and you shouldn't do that. The 
fetal alcohol syndrome has yet to be proved anywhere . 

In fact, there's so much misinformation around about these 
categories. As an example, there are purported to be five 
thousand babies per year born in California with this fetal 
alcohol syndrome. But the government's own statistics only say 
there's something in the neighborhood of twelve to fifteen. 
Somebody makes up a number and throws it out there, and it gets 
bandied around, and the next thing you know it's in front of 
Congress and in front of people. 



91 



Formation of National Wine Coalition 



Moone: We of the industry need to combat what is real misinformation, 
and for that we formed the National Vine Coalition, which I've 
been on the board of since its founding. I was in on the 
hiring of John Volpe, the new director. That's going to be a 
huge, wonderful new entry for us to really inform people. He's 
from the Chamber of Commerce , where they really do these 
studies in great depth through legitimate forms, and then 
really merchandise them back to the government as they should 
be done. We need our own voice in that. 



Expansion of Premium Wine Business 



Moone: I really am an optimist in this, and I don't think it's a major 
concern of the industry. I think that consumer attitudes are 
important, obviously, and I think people are moving in the 
right direction in wine. That's because premium wine is 
growing so greatly. Premium wine is a wine drunk with meals as 
opposed to just a jug wine, which is a glass of white wine over 
a bar or something. It's nice to have a glass of wine if you 
want an aperitif, but I see our business becoming more 
traditional. Now half the dollars in the industry, over 
$1 billion, are in the premium arena, growing at a hundred 
million a year. I get great strength from that. 

Jacobson: Does the expansion of the premium wine business represent an 
expansion in the consumer base? 

Moone: The consumer base this year on table wines is up 1 percent. 

You've probably seen a lot of things saying that wine's down, 
but it's not down. It's down if you take a look at it in 
parts; wine coolers are down. But I think that was a fad that 
went up and was going to come down anyway. But traditional - 
based table wines are up 1 percent. There is a slowing in the 
premium wines. They had been growing at a 20 percent rate 
through June, and they say they are up about 6 percent. But 
that base is screwed up because of people shipping some in for 



'Later query: Could you not drink a non-premium wine with a meal? 
Response: "It ruins the meal! Chardonnay at $5- $6 is not duplicated in "jug" 
wines. Reds are very poor." 



92 



tax reasons a year ago, and for the sulfite label. There were 
a lot of changes going on last year in the base period that 
changed that. I'd say they're up more like 10 percent; still 
down from 20 percent , but up about 10 percent . 

But up 10 percent ain't bad, also when you consider that 
we're out of wine. We've used all the inventories, we've moved 
all the vintages up that we can do, and we're out of wine. On 
that basis, we get more wine, and I would think we're going to 
go back and continue to grow again. I don't see any resistance 
to our product in that sense. I do see us raising prices, 
which could be bad. As we've run out of grapes we're raising 
prices, some of us, because we're paying more for grapes. So 
we need to get more grapes and be competitive, and keep moving 
the business as a good value to the consumer. 



Advertising Wine as an Everyday Beveraee 



Jacobson: Are prices an issue of concern to the Market Development 
Committee? 

Moone: No, that's not the concern there. The Market Development 

Committee focused on making wine an everyday beverage , and to 
that degree we have an advertising campaign through the Wine 
Institute. We're test-marketing it in three markets with 
media- -television, radio, and print. It's really a human 
interest focus on wine. Like, one of them has a lobster 
fisherman who says, "I know I don't look like a wine drinker, 
but I enjoy coming home and selecting the wine for the night's 
meal." 



Or another one is a woman saying, "My mom came over for 
dinner last night, and I was surprised when she asked if I had 
a glass of wine. I didn't think she drank wine-- 'I thought you 
only drank wine on special occasions'. 'Well, then let's 
pretend it's your birthday'. We had one of our best meetings." 
A real human interest story that you could relate to, that 
talks about wine as being an okay beverage. I think the ads 
are quite strong, and we're testing how they do. The ads say, 
"It's being brought to you by the winemakers of California." 
which personalizes it, as opposed to saying, "Brought to you by 
the Wine Institute." 



93 



So we're focusing on some testing, and I would think we 
will learn more about how we do that. I also want to make sure 
that you understand that I'm not saying that wine should be an 
everyday beverage like milk or soft drinks. It has been 
purported that in order to sell more wine we need to be as 
pervasive as soft drinks. I really think that's stupid and 
unrealistic. 

I think wine's benefit is that it's not like Coca Cola, 
and it's not like an iced tea. It's special, and I think it 
should always keep its special place. I'm more jealous of that 
than other people, I guess, and I think a lot of this is 
diatribe by people who would like to be good marketers , and who 
would like wine to be just taken out of their hands or 
something. 

But I don't think we're ever going to be to the point 
like, say, the Milk Board, where we say, "Good for every body." 
I think that's a horrid campaign. It hasn't worked, either, on 
its $30 million a year forever. [laughs] I also don't see us 
budgeting our funds for that kind of thing. Hopefully we'll 
come up with some kind of campaign that will make sense. 

We're making statements in a lot of areas. We've 
reorganized ourselves, we've added a marketing person at the 
Wine Institute: we brought Jerry Vorpahl in, so we've 
strengthened John De Luca's arm in that sense. We've focused 
the industry on what we think are our critical issues. 



Health Issues and AWARE 



Moone: There's still this segment that really thinks that "wine and 
health" is important, and they've spun off into this AWARE 
group, where they send out these little stupid postcards that 
talk about wine and cancer. Now, that's just absolutely crazy. 
The reason that's crazy is that no matter what you say to a 
person who's opposed to you on a health basis, they will always 
publish their evidence. 



Moone: Every time you raise that issue- -there was an article that said 
wine cures cancer, for example --someone will publicize a 
negative issue. So why bring up something if it doesn't truly 



94 



matter. Ann Landers had one the other day, where some gal 
wrote in and said that wine reduces heart attacks by 35 percent 
(which it does, in moderation), and heart disease is the number 
one killer, and we could save millions of lives if everybody 
had a glass of wine, and it cures cancer, and all this, and 
it's served in hospitals. Ann Landers just slammed it and said 
that here at the Mayo Clinic they'll never serve wine. 

I mean, every time you bring up what seemingly sounds so 
good to the person that perceives it in that manner, someone 
else is going to slam it, and therefore you get the counter 
point of view. Well, why raise those issues, especially if 
they don't matter? I think we need to focus on real issues of 
wine as an everyday beverage and its enjoyment with meals, its 
tradition, and its history. There are several ways we can do 
that , obvious ly . 



Wine and the American Heritage 



Moone: Another one that I'm really driving to complete is the Thomas 
Jefferson Foundation. Thomas Jefferson had the first great 
wine cellar in the U.S. He was the founding father, he was the 
president, a brilliant person. His wine cellar was great, and 
some of the wines are showing up at auctions around the world. 
We want to rebuild his original wine cellar to entertain people 
from the Washington, D.C., area- -congressmen, et cetera and to 
publicize his quotes and learn about his activities in wine, 
which were considerable. He made his own wines and was very 
proud of it . He took them to France and drank them with 
LaFitte -Rothschild and things like that. 

So there's a wonderful history there for us to partake of. 
His quotes were just marvelous , about what wine meant to him in 
his life. Those kinds of things really say a lot to our 
industry, and we need to preserve them and capitalize on them. 
Those are the kinds of things I want to put our efforts into. 

Jacobson: It's a great way to connect wine to something in the American 
heritage . 

Moone: Exactly. That helps make a statement that it's part of our way 
of life. 



95 



National Wine Coalition 



Jacobson: Is the National Wine Coalition planning to launch an 
advertising campaign of its own? 

Moone: Not yet. It may pick that up. That could go to John Volpe if 
he wished. Right now the advertising campaign is run through 
the Wine Institute; it's called the California Wine Promotion. 
The National Wine Coalition will involve importers in wines of 
all states, and we need the focus there, because we don't want 
people to be jealous of just the California wine industry, over 
93 percent of the production in the country in gallonage. 

There's a wonderful new burgeoning wine market. Wine is 
now produced in forty-two states, and this is politically 
significant because all the senators in all the states are real 
excited about that and they like their own industry. It's 
provincial; those people in their own places will drink their 
own wines and love them. So we need to encourage that. We 
don't want them to feel that we're against them, so we need to 
found and to fund a national coalition (which we've done), and 
then to have it draw strength from the whole country, and to 
literally be perceived in Washington for what it is: that it 
represents all the wineries of all the states and the imports 
in the country. There's a void right now, and that's why we 
did that. 

I could see the day when perhaps there may not be a 
California Wine Institute as powerful as it is today, that the 
National Wine Coalition could be the speaker for the country. 
That could happen over time. 



Importance of Industry Affairs to Beringer's Success 



Jacobson: You've also been involved with the California Wine Commission. 

Moone: Yes, I'm on the board there, and I've also been on the Napa 

Valley Vintner's board. I chaired the Definition of a Winery 
Committee here with Andy Beckstoffer for the grower alliance we 
put together to "define the wineries, "^ which will be done at 



pages 96-97. 



96 



the end of this year. It was quite time consuming, 
been pretty active in industry affairs. 



So I've 



I really felt at the time I started this, going back four 
years ago, that the industry was a critical element to our 
company's success. And while our company was very successful, 
the knockout factor could be that if we got some giant 
prohibition in the industry, or some horrendous taxation issue, 
those kinds of things had a chance of affecting us. So I spend 
a lot of time in defining and helping to work on those issues 
in the country. 

I headed the national delegation to Washington, D.C., for 
the Wine Institute, as an example. I was chairman of that for 
one year. You know, I got involved in what I'd call the 
tougher issues of our time and tried to guide the industry with 
some leadership in those. That's where the motivation came 
from, and I feel good about what we've accomplished. 



Definition of a Winery Committee 



Jacobson: 



Moone : 



Why don't we take some of these one by one. 
a Winery Committee--? 



The Definition of 



It was here in the Napa Valley. We're up to a couple hundred 
wineries in Napa. Tourism has been an issue, as has the 
environmental impact of wineries --how many can we have, are 
they cluttering the hillsides and the views and Highway 29? 
Should we have warehousing at the wineries or down valley in an 
industrial area? Should we have tourists? Could all wineries 
have tourists? Basically it's been a pretty unstructured 
arena, so the county has been asked by the grand Jury process 
to investigate this, which is their charge. 

This has been a splinter group from the growers wanting 
wineries to buy only Napa Valley grapes [laughs], and for some 
other groups to eliminate tourists completely. Anyway, what we 
need to do is put some definition in this that we can give to 
the county and say that as growers and vintners we are pretty 
much in agreement that this is the way to put some limits on 
winery size. 



97 



For the first time we're going to be dealing with limits 
on wineries --how much you can grow, how much space you can use 
on the land that you have for your winery. We defined all 
that, and wrote it all up- -what defines a winery that can have 
tourists, or tourists by appointment, hours so the county will 
regulate it. We've signed off on it as vintners, and so have 
the growers by the growers' boards. It's now in the EIR study, 
and the final recommendations will come in hearings this fall. 
By January 1, it will be law for Napa County. 

Jacobson: There must have been some tough compromises to make. 

Hoone: That was a hot potato) [laughs] It still is; there are still 
some issues. But I think we've done a good job of defining it. 

Jacobson: How did you resolve the issue of how many tourists? 

Moone: We did that by size of winery and by facility. As an example, 
let's say you have a ten-acre site. You can only use a certain 
portion of your grounds for the winery, so on that size range 
you can only have tourists by appointment. It goes on from 
there. It's just defined by volume. You basically have to 
have a forty-acre site to be able to have open tourists. You 
have to have a special permit also, but generally you would get 
that with a forty-acre site. Only ten acres can be used for 
the winery, including the ponding system. We were pretty 
specific on the whole thing, as to how it's related. 

Then how you grow your winery- -you can only grow up to 
20 percent of your foot path, which is basically the winery and 
its parking lot. So you have to be more effective within your 
space; you can't spread out all over the place. You can't buy 
a five-acre site and then make this huge winery. We wanted to 
stop things like that. We wanted to eliminate wineries in the 
viticultural areas- -hillsides and protected areas of the 
valley. We didn't want tourism in those areas. It's quite 
defined. 



Wine Train 



Jacobson: Did you take on the issue of the wine train? 

Moone: No, not in that. But I've been fighting the wine train 

economically and politically. I'm not against trains; I'm 



98 



against that train and the guy that runs it. He's been not a 
good listener. He believes the train can do what it wants 
because it's a government, U.S. -regulated industry. We fought 
him because we wanted to have an EIR, and wanted him to tell us 
how he was going to proceed via the state laws, as any other 
state business would. We fought that in the courts and we won-- 
so far; he's appealing that process. 

We want the Public Utilities Commission to oversee his 
activities. The reason for that is that he has never said how 
he will handle the number of people that he brings to St. 
Helena, ever. And with 450,000 people coming to this small 
community- -he's said, basically, in twenty-five passenger 
buses --well, that's sixty to seventy buses going downtown 
through St. Helena. St. Helena's not ready for sixty or 
seventy buses. We don't take buses at our winery. You'll 
notice there are no buses here at Beringer; we don't allow 
them, and many other wineries don't. Where is he going to take 
them? None of this has ever been discussed, let alone the 
impact on railroad-road crossings, noise, pollution, the real 
effect on traffic --which won't be anything positive, in my 
opinion; it will be negative. All those things need to be 
studied, and he's refused that. So we fought him on that 
basis, and hopefully he'll have to come up and answer those 
quest ions --like any other business would in this community. 



Grower-Vintner Relations 



Jacobson: How would you describe grower -vintner relations? Have they 
been improving? 

Moone: They are improved, vastly improved. Basically, this committee 
did a lot to improve them, and we've had a good alliance with 
the grower leadership here in the valley. There are still 
areas for improvement, but generally it's good. We have good 
growers in the valley here. 

Jacobson: Has the California Wine Commission tackled some of those 
grower-vintner relation issues? 

Moone: No. That's not their charge. Their charge is more the 

taxation of all wineries, through grape taxation, to raise 
funds for wine activities. We tried a joint commission with 



99 



Jacobson: 
Moone : 

Jacobson: 
Moone : 



vintners and growers , and that was horrible . The reason that 
was horrible was the attitude of certain growers, particularly, 
I think, the San Joaquin Valley growers, who have much 
different problems than the North Coast growers . I think 
that's where the thing fell apart. There was a real resentment 
directed at the Wine Institute, which never should have 
occurred. It was just through naivete about what the growers 
thought the Wine Institute was --that it should have been out 
marketing wine, when in fact the Wine Institute's charge is the 
legality of trade barriers. 

They [the growers] never see the amount of work we do in 
that respect. They just want to take all that money and throw 
it into an advertisement that shows some guy with a hard hat 
coming home saying, "Honey, let's have a glass of red wine 
tonight , " which would have been the worst thing we could have 
done at the time- -you know, to fly in the face of "Let's 
increase consumption." [laughs] All we did was fight each 
other for two years, and finally we just said, "To hell with 
them; let's get out of here and get our own commission." We 
did, and we moved away and have been happy ever since. I don't 
know whether they're happy or not in that respect, but we're 
happy . 

Are there any prospects for unity? 

No, not again. [laughs] Let them do their thing. Let us 
market it, and let them grow them. [laughs] No, I don't want 
to go through that again. 

How are the San Joaquin Valley growers' problems different from 
those in the North Coast? 

Well, they're more subject to declining sales of wine coolers, 
as an example, and concerns about what they are going to do 
with their grapes, and how is the government going to help 
them. We don't care about that here. And if premium sales 
were down and their sales were booming, they wouldn't care 
about us, either [laughs], so it's a two-way street. 



Growers of California, 1984-1987. 



100 



Napa Valley Vintners 



Jacobson: You've been part of the Napa Valley Vintners for how long? 

Moone: A long time. I was on the board for two years, and was 

supposed to be the president last year. But I couldn't do it 
because of taking on the new company with Nestle . I had to 
reallocate my priorities. I'm also the secretary of the Wine 
Institute now. I'm moving through those chairs, and that just 
happened this year. I'm going to make an effort to move off 
the Market Development Committee [laughs]. I picked up a new 
company called Sunmark in St. Louis. It's a good-sized candy 
company; it does about $170 million a year in sales. That 
company reports to me now, so I've got a broadening activity. 

Jacobson: It reports just to you? It's not connected to Nestle or--? 

Moone: No, it's not connected to the Wine World. I'm president of 
this company, and the guy who runs it, Jim Gagliarducci, 
reports to me . 

Jacobson: My goodness, where do you find the time? 

Moone: I know, I don't! My life is changing a little bit, so I need 
to focus on fewer issues, basically. 

Jacobson: Has the Napa Valley Vintners' membership been valuable? 

Moone: Yes, that's been a really good one. We had the election here. 
Wines were a big issue, and we put together the first big 
campaign. We had a band and two or three hundred people coming 
along. That was from what was called a "grower issue"; that's 
what really got us organized and going on that issue. If the 
wineries would have had to use 100 percent Napa Valley grapes, 
it would have put probably 50 percent of the winery workers out 
of jobs in this county. So the vote came down to a jobs issue, 
and nobody really understood the jobs issue. Plus the biggest 
land grab in the history of the valley would have occurred, 
which would have been great for the growers who wanted to sell 
out, because the wineries would have all had to go buy more 
land quickly. 

So it was a really stupid issue, and we had some 
politicians who supported it who were up for election. They 
didn't know what they did. We stood up and threw them out of 
office. I don't know if we did it for the good of the valley, 



101 



but we certainly won it on our issues. It's probably one where 
we might have won the battle but lost the war [laughs] , but 
we'll see. Anyway, we did it. 

So we became politically aware for the first time, and 
politically powerful for the first time. I think that's a 
lesson this valley will learn for a long time- -that we are the 
industry of this valley, and we need to do a better job of 
telling our story to the leadership and politicians of the 
valley, and we haven't. We're not doing that, hopefully we're 
a little better. Since then we've made peace with him and the 
growers and gotten together, and I think we're all moving in a 
good direction. So far it's been a good year for that. 



Wine Industry's Economic Contributions 



Jacobson: You just mentioned the importance of telling your story to 

politicians and leaders of the area. What about, in connection 
with that, selling the economic contributions of the wine 
industry to the state? 

Moone : Well, we really need to do that. We have to do that. You 

know, we have a huge investment. We're a wonderful industry in 
that sense; we don't get government subsidies. They have 
$32 billion in agricultural product subsidies, and we don't get 
those. We've drawn ourselves up by our own boot straps with 
our own investment, we're competing with the great wineries of 
the world, we're exporting and growing our exports around the 
world. We're exactly the model of what the U.S. government 
expects our industries to be doing to be competitive in the 
world. 

At the same time we employ thousands of people in the 
$7.50 to $12.00 an hour range, who wouldn't have another job. 
A lot of them can't read and write, and they're well-paid. 
They're highly skilled in our area. So we do a lot of neat 
things. Yet we're being fought by the government --the 
Pollution Board, for example, wants to have us put scrubber 
caps on all our fermentation equipment because a by-product of 
the heat exchange is CO 2 and we put out a little bit at the 
fermentation time. It would cost the industry millions of 
dollars to do this; it would cost this winery probably $4-$5 
million to do that. I said to the person at the EPA, "This 
could put our industry out of business," and he said, "I don't 



102 



care if your industry goes out of business. We don't need you. 
If people want to buy the wine, let them buy it from a foreign 
country." So our own government on the one hand is saying 
we're wonderful, and on the other hand they've got some son of 
a bitch who doesn't care if you go out of business. 

Veil, we need a policy in the government that puts a 
proper order to industries and competitiveness. Sometimes it 
gets out of balance. Right now it's probably a little bit out 
of balance. The same thing with labeling and the hassling of 
us on some of those issues. In fact, there's a point where 
they're just hassling and not real consumer issues- -they're 
more political. We need to be more like the Japanese and the 
Europeans in the United State in that respect- -more 
commonsensical--and not just listen to the squeaky wheel, the 
little 1 percent of people who yell and scream and make 
50 percent of us wonder what the hell we are doing that for. 
That's our political system, I guess. 

Jacobson: Are economic contributions that the wine industry makes 
something that the National Wine Coalition--? 

Moone: Oh, definitely. The amount of taxes that we're already paying, 
sure, and excise taxes the regressive taxes; we're always a 
sin tax. We're always being hit on those things, and of course 
we'll be hit again. We're being hit at the state level. All 
the governments are out of money, so we're being hit 
everywhere. But if our consumption goes down, then their 
revenue goes down. What they all say is, "Well, we're going to 
keep the same amount of sales." They put it in their budget, 
and then they don't get the money. Then they're back in the 
same old trap again. 

In fact, the best thing they can do to get money is to 
leave us alone, because we're growing and paying tons of taxes 
now. Let us continue to prosper. That story we need to tell, 
and we are telling it. But we need to tell it better, more 
often, and more professionally. 

Jacobson: You need to tell it in Thomas Jefferson's rebuilt wine cellar. 

Moone: Exactly. It crossed my mind [laughs]. And there are people in 
the government who understand this --you know, the leaders in 
Congress. Not enough, but there are some. 






103 



Wine and Spirits Wholesalers' Association 



Jacobson: You are also a member of the Wine and Spirits Wholesalers' 
Association. What is your involvement there? 

Moone: We're just a member there. We go to the annual meeting, show 
our products , and all our distributors come by and taste our 
wine and tell us they love us. That's about it. 

Jacobson: How has that been helpful, just in terms of an annual event? 

Moone: In the initial stages it was to get distributors and to get 
distribution all over the country. Now that we're a very 
mature company with distribution everywhere, it just gives us a 
chance for their top management to see our top management. 
We're so busy we really don't get to see each other enough, so 
at least for that one bit of time we get to sit down for an 
hour and talk. 



Wine Industry Culture 



Jacobson: 



Moone : 



Would you say that there's a wine industry culture? 
there is, how would you define it? 



And if 



Well, there's certainly a wine industry culture of commonality 
among all of us that are involved in making and producing 
wines. To some degree the people who grow grapes are in the 
same culture; they share in it. It's a real pioneering kind of 
spirit. You know, we're not a business that's a big major mass 
media business; we're kind of a belly-to-belly business, where 
you really have friends that support you and buy wine and 
things . 

And it's one of sharing. I mean, if someone calls up and 
says, "We need a tractor," or "I've got something I need to 
ferment , " if we have the place for it , we do it . Then when you 
go out in the street it's competitive as hell, and they're 
trying to take you off a wine list [laughs]. But here in the 
environment of the valley it's a wonderful fraternity. 

They're also good people who are real capitalists; they 
put their money where their mouth is. They bellied up to the 
old bar and bought the vineyards and built their wineries, and 



104 



they're out there tasting it and talking about it. It' 
wonderful. They're real committed people. 



Transcriber and final typist: Judy Smith 



105 



TAPE GUIDE -- E. Michael Moone 



Interview 1: July 24, 1989 1 

tape 1, side a i 

tape 1, side b 13 

tape 2, side a 25 
tape 2, side b not recorded 

Interview 2: September 12, 1989 37 

tape 3, side a 37 

tape 3, side b 47 

tape 4, side a 62 
tape 4, side b not recorded 

Interview 3: September 26, 1989 71 

tape 5, side a 71 

tape 5, side b 81 

tape 6, side a 93 
tape 6, side b not recorded 



INDEX -- E. Michael Moone 



106 



affirmative action, 13 

Alexander Valley, 63, 64, 66 

Almaden Vineyards, 20, 21, 34 

Anderson, Wally, 11 

anti- alcohol movement, 86, 90 

appellations, 64, 67 

Aquilano, Tom, 16 

Asti winery, 43, 65 

AWARE (American Alliance for 

Research and Education), 93-94 



Beckstoffer, Andrew (Andy), 95 
Bel Arbors brand, 53 
Beringer Vineyards, 16-17, 37-49, 
50, 63 

advertising, 40-41, 46, 47, 48- 
49, 58-59 

airline business, 32, 78 
brand, 20-21, 30, 32, 35, 74, 81 
building a national sales 

organization, 22-23 
culinary arts, 83-88 
distribution, 32, 46 
focus on 750 milliliter business, 

45-46 

market research, 38-39 
marketing challenges in the early 

'70s, 20-21 

ownership changes, 72-73 
personnel, 17-20 
pricing, 22, 43-44 
public relations, 48-49 
rebuilding the winery, 39 
relationship with distributors, 

23-24 
renaissance of the label, 37-38, 

45 

role of foreign investment, 71 
salespeople, 25-26 
School for American Chefs, 49, 

84, 85-86 

streamlining the portfolio, 44- 
46 



vineyard acquisition and 
management, 18, 41-42 

wine competitions, 47-48 

winemakers, 39-41 
Berry, Jan, 4 
Berry, Richard, 4 
Biane, Jon, 26-27 
Biggar, Jim, 20 
Bras, Bob, 16, 21 
Brown- Foreman, 28-29, 55-56 
Bureau of Alcohol, Tobacco, and 
Firearms, 33-34 



C & B Vintage Cellars, 16, 55-60 
California Wine Promotion, 92-93, 

95 

Canada as a wine market, 76-77 
Carter, Rick, 26 
Cat Canyon vineyard, 69 
Cesario, Michael, 26 
Champagne Deutz , 62, 63 
Chateau Le Tour, 86 
Chateau Souverain, 20, 24, 27, 30, 

41, 43, 49, 64-65, 66-67, 68, 69, 

70, 74, 75, 78 

restaurant, 64-65, 84, 85 
see also Souverain Cellars 

wine and food seminars , 85 
Chateau St. Jean, 63, 66 
Christian Democrats [Italy], 28-29 
Clos du Bois winery, 66 
Coleman, Bill, 11 
Common Agricultural Program, 79 
Communists [Italy], 27-28 



Danko, Gary, 64, 84, 85 
De Luca, John, 93 
Deboeuf, Georges, 57, 86 
Definition of a Winery Committee, 

95-97, 98 
Dotson, Jim, 86-87 



107 



Edna Valley, 68 

EEC, 79 

England as a wine market, 78-79 

Estrella River Winery, 67 

Europe, exports to, 74, 78-79, 80 



Fee, Knight, 23 

fetal alcohol syndrome, 89-90 

Fetzer Vineyards, 45-46, 51 

fighting varietals, 50-54 

Fontana Candida winery, 27-29, 30, 

55-56 

Food and Wine. 64 
Foster, Bill, 26 



Gagliarducci, Jim, 100 

Gallo, E & J, winery, 5, 15, 50, 58 

General Shopping Company of 

Luxemborg, 72, 73 
Glen Ellen Vineyards, 51, 52, 53 
Godu Shousay Company, 75 
Gruppo Italiano Vini, 27 



Higgins, Linda, 25 
Hudson, David, 84 
Hudson House, 48-49, 84 
Hulse, Fran, 47 



imports, 29, 55-60 
Inglenook, 20, 21, 45-46 
Isenberg, Ted, 14 



Japan as a wine market, 75-76, 77 

78, 80, 81 

Jefferson, Thomas, 94 
Johnson, Bruce, 4 
Johnson, Randy, 4 
Jones, Gary, 26 
jug wines, 20-21, 29, 35-36 



Kamman, Madeleine, 48, 64, 84, 85- 

86, 87-88 
Kay, Guy, 17-18, 19 



Kenwood, Tor, 83 
Kidel, Ray, 9 
Klenz, Walter, 19 

Labruyere family, 72-73 

Landers, Ann, 94 

Los Hermanos brand, 17, 20-21, 27, 

29-30, 31-36, 46, 51 

airline package, 31-32 

declining sales, 35-36 

light wines, 33-34 



Maher, Richard, 13-14, 21-22, 31 

Maison Deutz, 56, 57, 61-63 

Margve, Dario, 25 

Mason, Bob, 16, 23 

McClelland, David, 10, 12-13, 25- 

26 

McGowan, Inez, 31 
Meridian Vineyards, 20, 30, 32, 41, 

68, 69, 70, 74 
Meyer, Justin, 63, 66 
Mondavi, Robert, winery, 45-46, 50, 

51, 53 

Monderot, Jean Luis, 86 
Monmoussen, 81 
Moone , E. Michael 

career at Procter & Gamble, 9- 

14 

cooking interest, 8 

early responsibilities and 
training at Beringer, 16-17 

early years, 1-2, 3-5 

fraternity experience, 4-5, 7-8 

involvement with Sunmark company, 
100 

joining Beringer, 6, 15-16 

university education, 2-3, 7 

wine interest, 4-7 



Napa Ridge brand, 30, 49, 50-54, 

67, 69, 70 

Napa Valley, 64, 96-98 
Napa Valley Vintners, 99-101 
National Wine Coalition, 91, 95 
Nelson, Mars, 3-4 
Nestle, S.A., 42, 72 
Nightingale, Myron, 18, 19, 39-40 



108 



Nivens, Jim, 68, 69 



Ogilvy, Jay, 89 
Olmo, Harold P. , 66 
Ortman, Charles, 20, 68, 69 



Paul Masson winery, 34, 37 

Peterson, Tom, 20, 66 

Powell, Vate Levatus , 13 

Predergast, Claire, 16 

premium wine business, 35-36, 91- 

92 
Procter & Gamble, 9-14, 25-26 



restaurant wine sales, 35-36, 53- 

54 

Rhine House, 78 
Ryan, Bill, 14, 19 



Safeway Stores, Inc., 20 

San Antonio vineyard, 42, 69 

San Francisco Chronicle. 64 

Santa Barbara area, 52, 64, 67, 68, 

69, 70 

Sbragia, Ed, 19, 40-41 
Sebastiani Vilneyards, 21, 29 
Silver Oak, 63, 66 
Sisquoc Vineyard Wine Cellars, 69 
Snowbrand Company, 75 
Sonoma area, 64, 66, 67 
Souverain Cellars, acquisition, 63- 

65 

sparkling wine business, 70 
Steinhauer, Bob, 18, 41 
Sutter Home Winery, 51, 52, 53, 59 



Tardivat, Jean, 62 

Targeted Export Assistance Program, 

79-80 

Tchelistcheff , Andre, 18 
Thomas Jefferson Foundation, 94 
Thompson, Janelle, 25 
Tonjum, Jim, 18-19, 47, 48 
Torrance , Dean, 4 
Travaglini, Jean Carlo, 56 



V<jJ.pe, John, 91, 95 
Vorpahl, Jerry, 93 



Wallingford, Dick, 19-20, 27 
Windisch, Pat, 78, 84 
Windsor Vineyards , 5 
Wine and Spirits Wholesalers' 

Association, 103 
wine business, long-term nature, 

71-72 

wine consumption, 91-92 
wine distributors, 16 
Wine Growers of California, 98-99 
wine industry 

culture , 103 

economic contributions, 101-102 

government regulations, 101-102 

health issues, 89-90, 93-94 

product liability, 90 
Wine Institute, 95, 96, 99 

Market Development Committee, 

89-90, 92-93 

Wine Spectator. 39, 56, 64, 71 
Wine Train, 97-98 
Wine World, Inc. 

exports, 74-82 

importance of industry affairs, 
96 

premium brand development, 70 

reshaping product lines, 29-30 

vineyard purchases, 64, 65, 67- 

69 

Winefood Consortium, 27, 55 
winery tourism, 96-97 



Yeutter, Clayton, 76 



Zonin brand, 56, 58 



Grapes Mentioned in the Interview: 

Cabernet sauvignon, 65, 66, 67, 71 
Chardonnay, 41, 52, 61, 69 



109 



Chenin blanc , 43 
Pinot noir, 61 
Zinf andel , 43 



Wines Mentioned in the Interview: 

Asti Spumanti, 58] 

Barenblut, 21, 37, 45 

Barolo, 57 

Beaujolais, 57 

Brunello di Montalcino, 57 

Cabernet Sauvignon, 6, 21, 32, 37, 

38, 39, 43, 44, 45, 51, 53, 54, 

63, 66, 68, 74, 78, 79, 80, 82 
Centanni, 28-29, 56 
Champagne, 56-57. 61-63 
Chardonnay, 32, 37, 38, 43, 44, 45, 

48, 51, 52-53, 54, 59, 68, 69, 

74, 75, 78, 82, 87, 88 
Chenin Blanc, 82 
Emerald Dry, 37 
Frascati, 27-29, 30, 55-56 
Fume Blanc , 44 
Camay Rose , 45 
Gattinara, 56 
Grey Riesling, 4 
Grignolino, 37, 45 
Malvasia Bianca, 4, 21 
Orvieto, 57 
Rioja, 56 
Sauvignon Blanc, 43, 51, 53, 74, 

78-79, 82, 87 
Traubingold, 21, 37, 45 
Vouvray, 57 
White Zinfandel, 42-44, 50, 51, 53, 

54, 64, 65, 74, 75, 76, 82 
Zinfandel, 5, 53 



Lisa S. Jacobson 



Born in San Francisco. B.A. cum laude, Pomona College, majoring 
in history; studied at Oxford University. Experience in market 
research and museum research. 

Editorial assistant and alumni news editor, Public Affairs 
Office, Pomona College. 

Research manager, interviewer, editor, and writer with private 
oral history organization, specializing in business history. 
Since 1986, researcher, interviewer, and editor with Regional 
Oral History Office, in fields of business history, wine 
industry, and social history. 



1242 



82