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Winemaking for fun and profit (pg. 2)

October 7, 2008: 10:47 AM ET


This was exactly the kind of fresh start Chuck McMinn was looking for. A startup junkie and tech industry lifer, the 56-year-old McMinn co-founded broadband provider Covad Communications in 1996. Life at Covad was a roller coaster. Under his watch, the company did an IPO, a bankruptcy, and finally an LBO. McMinn and his wife purchased Vineyard 29 eight years ago and moved to St. Helena full-time in 2004 to start anew. Vineyard 29 sits on a perch tucked just far enough off highway 29 that you could drive by it a thousand times without realizing it exists. The McMinns have built a "cash-flow positive" business producing wines that sell for up to $225 and have settled into a wonderful life. But it took adjusting. "It's not ready, fire, aim, like Silicon Valley. It's ready, aim, aim, aim, aim, fire," he says, sitting at his desk wearing tech-executive plumage: a yellow polo, fleece vest, and khakis. "You have the time to make the right decision. And you don't have to be 100% focused on the business."

McMinn has fashioned Vineyard 29 into what he calls the "chateau model." He makes 2,000 cases of wine from his 20-acre estate, 5,000 cases from purchased fruit, and crushes 5,000 for other growers. When he's not working, McMinn volunteers with and donates to local charities and has made plenty of friends. Having both a business and a life is a new experience to him. "I would have loved to have given back to the community in Silicon Valley," he says. "But there, if you're not running 20 hours a day, you're losing, because someone else is running 19."

Not every arrival eases into the community so well. Some flee a previous life with arms waving and hair on fire, and set the place ablaze when they arrive. Take Jayson Woodbridge, 44. At six-four, 260 pounds, with a flowing salt-and-pepper mane and wraparound titanium sunglasses, Woodbridge, owner of Hundred Acre, sticks out here like a Hell's Angel in a library. But he was even less a match to the bespoke suits of investment banking, where he worked on oil and gas deals until 1998. With triplets on the way, he fled west to explore his passion. "The stock market was insane," he says. "I couldn't understand what was going on, and I felt lost for the first time in my life."

We're in his "office," for lack of a better word. It's worth describing how we got here. He wouldn't provide an address or even directions. Instead, he said to call when I was on the way. At that point he instructed me to drive to an intersection, get out of the car, and wait. After he showed up in his Mercedes SUV, we walked to a stone building nearby. He opened an unmarked door on the second floor and closed it behind us. We stood in a steel vault until he opened another unmarked 1/4-inch steel door with a biometric scanner to reveal a cavernous pied--terre complete with a pool table, nine-foot paintings, cherry walls, a one-of-kind Hamer guitar, Roche Bobois leather couches, racks of wine, a kitchen, and a laser security grid covering the whole thing.

Unlike most owners, Woodbridge serves as his own (self-taught) winemaker. Unlike McMinn, he's hardly a community pillar. Some wineries refuse to pour at events that Woodbridge attends because of his Harley-riding entourage and brash style. He's been disciplined by the planning commission for not having an occupancy permit (Woodbridge settled the dispute by donating $100,000 to charity), and has faced complaints from neighbors and even a criminal charge (it was later dropped) for making wine without a license. But he's a critical darling - and proof that more than one personality type can succeed here.

Woodbridge paces his office and explains how he got his start. "I never made a single model, never a single spreadsheet, and I had no business plan," he says. "I just threw everything I had at the business. What it was going to cost was what it was going to cost. I wanted to make a wine to define our time."

In an effort to do just that, he's made a $20 chardonnay called Gold with 24-karat specks, and he's winning awards for his $16 Layer Cake shiraz and malbec. But his highest-profile projects are his single-vineyard cabernet and shiraz. Workers harvest clusters individually, making as many as five passes on a row over the course of weeks, as opposed to the usual single sweep. Picking a cluster only when ripe allows the vine to supply ample energy to the remaining fruit. The wine spends 30 to 50 months in French oak barrels. This unique attention to detail garners both phenomenal scores and outlandish prices. The 2006 Hundred Acre Kayli Morgan notched 94 to 96 points from Parker; $600 buys a three-pack.

Woodbridge won't talk finances or production, but he sold two homes, borrowed to the hilt, and still barely got in. I suggest that Napa vintners are like ball-team owners: You do your best to not lose money year-to-year and make a mint when you sell. He nods. "Owning a vineyard is a long-term yield instrument," he says. "I'm never going to see the money. I'm never going to own a home in Tahoe. But maybe my kids will."


Woodbridge and McMinn are old hands compared with some of Napa's newbies. There's Hi Sang Lee, a Korean importer and founder of Dana Estates, soon to release its first wine for $275 a bottle. Then there's former AOL CEO Barry Schuler, who founded Meteor Vineyards, and Susan Hoff, the daughter of Best Buy founder Richard Schulze, who started Fantesca. The most talked-about new release, though, Ovid Napa Valley, comes from Mark Nelson and Dana Johnson.

Like so many others, the Ovid founders began drinking more wine as their incomes rose, started traveling to Northern California, and eventually moved there. Nelson founded Ovid Software in New York City, which he sold for $200 million in 1999, and now also runs a private equity fund, Mithras Capital, which owns 1.7 million shares of Yahoo (YHOO, Fortune 500). (He was in the news this summer, blasting Jerry Yang and Steve Ballmer for botching Microsoft's attempted acquisition.) The couple scouted a plot of land on Pritchard Hill, up the slope from Screaming Eagle; the property had what the locals call "good dirt." The only problem: Most of it was buried under rocks. "The rocks were a real quandary," says Nelson. "We figured out that to truck the rocks off would take four trucks operating five days a week for ten years." Instead, they cleared the rubble from 15 acres, used some for roads and decoration, and landscaped the rest. "We didn't know what we were getting into," adds Johnson. "It was not a popular project. It was loud."

Nelson and Johnson had their own formula for how to make world-class wine. It once was enough to call an acclaimed winemaker like Helen Turley and let her work her magic on a new project. But the highest-profile projects today tend to be highly collaborative among specialists. Nelson and Johnson lured the A-team for Ovid: David Abreu, Napa Valley's grape whisperer, is vineyard manager; the winemaker is Andy Erickson, who also makes Screaming Eagle and a handful of other projects, including his own label, Favia. Michel Rolland, the world's most influential wine consultant, and Napa Valley's star architect, Howard Backen, also signed on. Assembling such a crew is not easy. "It's like dating with these people. You don't just phone them up and say, 'I'd like you to work with me,'" says one industry insider. "To get to someone like David Abreu interested, it takes 18 months of courtship."

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