Thursday, September 21, 2006
Their Name is on the Bottle, Just Not the Wine They Make
Cecil DeLoach, Mike Hogue and Michael Mondavi all share one thing in common. They run wineries, but others sell wine with their names on the label. This is what happens when you use your name to build a wine brand, the company is sold and then you decide to go back into the vineyards.
DeLoach, a San Francisco fireman, started his Russian River winery in 1975. The company made some great chardonnay and a number of other varietals. I was lucky enough to meet Cecil DeLoach and try some of his wines at a festival just as his label was taking off in popularity. In the super heated vineyard economy of the 1990s, DeLoach rapidly expanded. Along the way the brand lost some of its cache and DeLoach found it difficult to keep up the debt service. After filing Chapter 11, the company was sold to Boisset, a French firm, in 2003. While the DeLoach brand continues on, the DeLoach family found another Russian River plot of land and created Hook & Ladder Winery in 2004.
Mondavi left his family business after internal squabbles. Named after his father, the Robert Mondavi Winery had been in business since 1966. Constellation Brands purchased the company in 2004. Mondavi and some family members, using the Folio Wine Co. name, have since purchased the Francis Mahoney Estate Winery in the Carneros Creek area of Napa Valley and Aetna Springs Vineyard in Pope Valley, part of the Napa Valley appellation. Mondavi is making I'M, Oberon, Bocce and Hangtime wines at the facilities.
Hogue is the most recent brand name vintner to be back in the business without the use of his name. He founded Hogue Cellars with his brother Gary in 1981. In 2001, they sold it for $36.4 million to Vincor International, a Canadian wine company that Constellation Brands purchased earlier this year. Mike Hogue is part of a group that recently paid $184,000 for nine acres of land under the Mercer Wine Estates label. One of the company's neighbors will be the Hogue Winery.
So the question is when are you actually drinking a DeLoach wine? Does it say DeLoach on the label or Hook & Ladder? Companies and brands are sold in America on a daily basis, but it is a little different when there is a living brand icon who is suddenly disconnected from the namesake brand. When brands change hands production methods, raw ingredients and recipes can change, too. Even if those things stay the same, there is a loss of personality and individualism behind the label when the founders leave. While the new owners want to maximize the equity in the brand they just purchased, it is difficult for loyal customers to stay loyal when the first thing to happen is for the person behind the brand name to leave the company -- usually with a suitcase full of cash.
It will be interesting to see if DeLoach, Mondavi and Hogue can make magic strike their vines again -- this time without the power of their brand names.