Verite is a Jackson Family holding. Surprised? Does this change your view of the wines? I hope not.

Goldfinger - We have been discussing the effects of brand ownership changes. Trying to disregard the "why's" of the sales, as they aren't really relevant.

Jean is a great lady whose wealth was well-earned. She built that vineyard and brand from, literally, nothing, to one of the most sought-after wines in the world. I wish her and her family nothing but the best.

quote:

In recent years, Screaming Eagle, Etude and Merus among others have succumbed to the fat check.

Missed the point? I don't think so. I agree the general discussion in the body of the thread has drifted to more specific relevance, but this premise put forth by the thread originator is bunk as it pertains to SE.

Yangarra Estate is part of the Kendall-Jackson conglomorate and makes terrific and very balanced wines year after year at reasonable prices. I think they outperform almost all other larger production Aussie shiraz, grenache and GSM blend makers in the $15-20 price range on a year in and year out basis.

Sanford was one of my favorite wineries for many years. When the Sanfords had the split with their corporate investors and went their own way (to open Alma Rosa), I stopped buying new Sanford releases. A few months ago, I went and tasted at both wineries, and my wife and I were forced to admit, Sanford was making wines at least as good as before the split, and they were making better wines than Alma Rosa is right now (though it's not really a fair comparison, given the outstanding vineyard sites which Sanford owns). The tasting room experience was funkier and more friendly at Alma Rosa, whereas Sanford was pretty blandly corporate and impersonal, but the wines themselves, there was little doubt to either of us which are better, even despite our prediliction to come to the opposite conclusion.

It will be interesting to see what happens to Stag's Leap after the takeover. My guess is that it will improve considerably, but that's just a guess.

I think, as with most things, the answer is mixed if you really looked into it without biases about evil heartless corporations and artisanal family producers etc.

quote:

Originally posted by winerugger:
Verite is a Jackson Family holding. Surprised? Does this change your view of the wines? I hope not.

Nah, I think it is cool they have a boutique side project.

Still don't understand how Verite would fit under the topic. They haven't sold it, and it is not really possible as what larger entity than KJ would pay for it?

I think Dave brought them up as examples of small, high-end wineries that operate in separate facilities under the umbrella of a larger company (ie Etude).

I don't know their histories, so I can't tell you whether they were all started as KJ brands or were purchased.

I don't think it really matters, as the point is that some larger companies do well leaving these alone and letting them do their thing, while some don't. My personal experience tells me that publicly-held entities are all about the share price and will do whatever it takes to satisfy their investors, while private investors can tolerate lower ROI's to a point (in exchange for being part of a lifestyle business).

And while some small, high-end wineries don't sell complete ownership a la Merus per se, they aren't necessarily owned by those with whom you associate them, because, hey, starting a winery takes a lot of cash. Witness Pax Mahle leaving his eponymous winery.

In essence, these equations:
Big company = evil
Small, starving artist = pure and good

are way oversimplified. But, hey, folks can believe what they want.

For the record, I work for a small, family-owned winery that has 0 outside investors. I can tell you that it took them a long time to grow that way, though, meaning the opportunity costs during those growth years were high.

winerugger,

I appreciate the perspective and the intellectual honesty of your contributions to this thread.

Thanks

There are so many variables being discussed here that I feel like we've only got oblique arguments (in the truest sense of the word) going on, and I fear that I've only contributed to confusing the issue. My apologies.

I don't think anyone begrudges Jean Phillips, Joel Peterson, Burt Williams, Tony Soter, or anyone else the money they made or the lifestyle they chose in selling their wineries. I certainly didn't take that from cab chris's opening topic.

There is so much gray area as to how, why, and the results of each of these brands being sold, it's tough to draw too many comparisons. (winerugger's right: Ravenswood and Williams-Selyem are not the same at all. I feel similarly about many aspects of the sales, but explaining them all would only defocus the argument, which I am avoiding.)

There is also a big difference between brands that have been established and sold (Screaming Eagle, Etude, Ravenswood, Williams-Selyem, etc.) and winemakers and/or owners taking on business partners in the process of building a brand (Kosta Browne, Pax, etc.). The latter group is exempt from this discussion IMO, as cab chris's topic seems to be more about those at the top selling and the affect on the brand name.

If SE is going to fall into any part of this discussion, I think it's too early to tell. Exempting them for the moment, if we consider every other sale of the top echelon, small wineries (whether they were bought by a corporation or by a single owner who may or may not have quality as a top priority), is there a single one whose reputation either remained as high or grew still higher? Etude, (Merus may still be too early to tell as well), Stags Leap, Robert Mondavi (though this was never a small boutique winery, was it?), Ravenswood, (Chateau Montelena is WAY too early to tell), Williams-Selyem (though they haven't fallen/changed as much as some others, they're not at all regarded as they once were), etc. IMO they've all fallen a little or a lot since their being sold. Returning to the essence of cab chris's original question, "Do these brands lose their luster after they're sold?" History says yes. Will the same happen to SE? This is their chance to over-come the odds. I wish 'em well; I love a champion.

cdr - Thank you. I don't frequent this board as much as I used to, but I found this thread title irresistible. I hope I can add to the discussion.

stickman - thanks for the well-thought out response. I feel this discussion is headed somewhere.

In response to your post, here are my thoughts:

#1. I agree that selling the entire business and taking on partners are separate. However, an investor, especially in a capital-intensive business such as ours, is not interested in small portions. In essence, what I'm saying is that typically, what's purchased or given as equity is a controlling interest. Which explains why someone such as Pax Mahle can be pushed out without taking the brand with him. You dig?

So, really, what is the difference between selling a controlling interest and selling the entire business? In my eyes, honestly, it's a semantic difference. In one case, the proprietor is kept on as a consultant. In the other, the winemaker is a salaried employee and/or receives royalties/dividends. The only difference between the two is who pays Uncle Sam.

#2. If what we are talking about is reputation, then certainly every brand is taken down a notch among wine geeks when it sells. What we should be asking is whether it's a fair notch.

I would relate it to VW buying Bentley.....who feels cool owning a $150K VW-produced car?

But does VW owning it mean it's now an inferior car?

Anyways, in my eyes, the question is whether or not the wine improves or declines. People automatically assume it will decline, which is what I'm challenging.

For what it's worth, I think SLWC's wine will increase in quality exponentially in the next few years. The winemaking staff will now be free to do what they feel is best without WW looking over their shoulders. The question is whether they will get a fair shake. In wine geeks' eyes, methinks they won't.

quote:

Originally posted by winerugger:
... typically, what's purchased or given as equity is a controlling interest. Which explains why someone such as Pax Mahle can be pushed out without taking the brand with him. You dig?

Ya, speaking for myself, I dig. Anybody else not dig?

quote:

If what we are talking about is reputation, then certainly every brand is taken down a notch among wine geeks when it sells. What we should be asking is whether it's a fair notch.

Fair point, and this is probably why we should just relax and let the wines speak for themselves. In the case of Screaming Eagle, most of us haven't/won't actually get a chance to taste it, so it really is only the reputation that we're talking about. And if the opportunity arises for those of us on the outside to buy a bottle, when the wine costs so much (what is it now, $750 on release?) and is so rare, reputation means everything.

I wouldn't underestimate, however, how quickly we wine geeks could be singing the praises of such wines; all it takes is a 95+ score or two, and we'll jump right back on the band-wagon. I saw a rather insightful joke on the cover of The Onion 'newspaper' which read something to the effect of, "Financially Hard-hit Americans Demand New Bubble to Invest In."

I buy wine based upon what is in the bottle. Wineries like Etude and Hartford which are now owned by large corporations are still delivering the goods.

quote:

Originally posted by winerugger:
I would relate it to VW buying Bentley.....who feels cool owning a $150K VW-produced car?

VW also owns Lamborghini and Bugatti. If I had a million to drop on a car, I would not opt against the Veyron simply because it is made by VW.

Hell, you could say there IS pride in ownership of Bently because it is the little bro to two more expensive brands.

quote:

Originally posted by winetarelli:

quote:

Originally posted by winerugger:
I would relate it to VW buying Bentley.....who feels cool owning a $150K VW-produced car?

VW also owns Lamborghini and Bugatti. If I had a million to drop on a car, I would not opt against the Veyron simply because it is made by VW.

Hell, you could say there IS pride in ownership of Bently because it is the little bro to two more expensive brands.

Well now that we are getting into it, Porsche is the majority holder of the VW auto group.

Technically, Porsche owns Lambo, Bugatti, Bentley, Audi, VW, SEAT, and Skoda.

quote:

Originally posted by Sticky2:

quote:

Originally posted by winetarelli:

quote:

Originally posted by winerugger:
I would relate it to VW buying Bentley.....who feels cool owning a $150K VW-produced car?

VW also owns Lamborghini and Bugatti. If I had a million to drop on a car, I would not opt against the Veyron simply because it is made by VW.

Hell, you could say there IS pride in ownership of Bently because it is the little bro to two more expensive brands.

Well now that we are getting into it, Porsche is the majority holder of the VW auto group.

Technically, Porsche owns Lambo, Bugatti, Bentley, Audi, VW, SEAT, and Skoda.

Well, that is sorta my point... no one thinks of Porsche as the same thing as Seat as the same thing as Lamborghini. Just like I don't really think anyone thinks of Etude as the same thing as Fosters beer or Hartford as Kendall Jackson. Provided that the wineries maintain their wn identities and styles, ownership change really doesn't affect my decisions here.

Mark Herold out at Merus. My original point reinforced in spades!!!!

quote:

Originally posted by cab chris:
Mark Herold out at Merus. My original point reinforced in spades!!!!

Mark was reporting to his ex- wife.

Although I have never been divorced, I'm not too surprised it was time for one of them to exit.

chris- what was your original point that was reinforced? Does bringing in Paul Hobbs make Merus more recognizable to moderate wine geeks or less? Does it add some luster? Will they sell more wine?

Honestly, I'm not sure.

I was surprised it happened so soon, but that it would eventually happen was inevitable.

I'll tell you what was reinforced. Merus just lost a whole lot of luster with the ousting of Mark Herold. I could care less about the hierarchy within the Foley Wine conglomerate. The fact is that Mark Herold was Merus, plain and simple. Along comes Paul Hobbs who is undoubtedly a top flight winemaker and has crafted some wines that I must say are stunning, but he is spread rather thin these days with more than a dozen projects on two continents. Mark Herold made Merus in his garage, a little blood, sweat and tears you might say.

quote:

Originally posted by JimmyV:

quote:

Do boutique wineries lose luster when they sell out

Yes. And then they are replaced in the hearts and minds of consumers by new start-ups, and the cycle continues. There was a lot more buzz about this year's release of Scarecrow than there was for this year's release of Screaming Eagle. And if it matters, the return on investment for Scarecrow was much higher, percentage-wise.

Tell that to Jean Phillips.

Most likely yes. If the winery maintains the SAME philosophy and the SAME vineyard practices, then maybe not. But in most instantances, YES.

quote:

I'll tell you what was reinforced. Merus just lost a whole lot of luster with the ousting of Mark Herold. I could care less about the hierarchy within the Foley Wine conglomerate. The fact is that Mark Herold was Merus, plain and simple. Along comes Paul Hobbs who is undoubtedly a top flight winemaker and has crafted some wines that I must say are stunning, but he is spread rather thin these days with more than a dozen projects on two continents. Mark Herold made Merus in his garage, a little blood, sweat and tears you might say.

Chris - We shall see, my friend, we shall see.

Methinks Merus will have very little problem selling wine in the future.

Consultants are always spread thin. It's in their best financial interest to be as such. If Herold had an Associate WM, she was probably doing the lion's share of the work anyways.

these boutiqy winereis loose lot of luster. once they get top billing or on a wine mag site it boring man boring. give me something new. winemakers think they dont have to do squat. just kiss booty. get points. kiss more booty and get more points. most are fruit bombs especailly cali pinot noirs

winerugger

I am not saying that Merus will have a problem selling in the future or that the product will be inferior. What I am saying is that they have lost luster in my book because the guy who created it is gone!

If I go shopping for anything which is available at a large corporate store and a Mom and Pop store I think you know where I'm getting the goods.

Big business may win in the boardroom and on wall street but in the hearts of loyal customers, it's Mom and Pop that get the nod.