Several weeks ago we were visited by Pete Mondavi and he shared with us the history of his family's land holding in Napa Valley and the expansion of the Mondavi and Charles Krug operations over the last decades. In the subsequent Wine Circle session, I asked him how his ancestors had approached the process of evaluating the quality of land for purchase in the early 1900s given the lack of modern oenological techniques for soil analysis. His response struck me - he basically noted that his ancestors just took a look at the land (one plot of which was a dairy farm at the time) and though it would be a reasonable place to plant a vineyard. Fast forward to the present and the quality of Napa as a wine growing region is very widely accepted as fact but thinking back to the earliest growers in Napa, they really had no idea when they bought land for $1,000-2,000 an acre that they were standing on a future gold mine (if their finances held out long enough to get them to the modern era).
This exchange got me thinking about how much of success in wine growing, not unlike business in general, can be attributed to a healthy dose of luck and how little that gets talked about in the evaluation of the industry. In the words of our strategy professor from first year, there seems to be lots of "retrospective rationalization" that these first winemakers were visionaries and knew something that others did not. Not to take anything away from these first growers, many of whom took great personal and financial risks to plant vineyards, but I think that any history of a wine region should try to take a more balanced view of the luck involved while still celebrating these pioneers for the risks they took. I also believe that acknowledging the role of good fortune can make the field seem more accessible for those with a passion for wine - while soil samples can tell you a lot, sometimes you just need to take a leap of faith and if you have the resources you should feel empowered to give it a chance. After all without that leap of faith, who knows whether we'd even be talking about Napa today.
Jordan, great post - thanks for sharing! One of my favorite podcasts is NPR's How I Built This. The host, Guy Raz, asks his guests (who are famous and successful entrepreneurs) at the end of each episode how much of what they achieved is attributable to luck vs. skill? Typically the guests answer that it was a combination of both.
ReplyDeleteI do agree with your assessment that the Mondavis were very lucky in how they were able to purchase such a large amount of high quality Napa land for so cheap. However, to push back on you a bit, I do think that in order to continue to be successful after that initial purchase, the family did utilize a lot of skill. Noting that each of the family's properties in Napa had different soil and climate and terroir characteristics, the family expertly figured out the optimal grapes to plant and how to best harvest them given the conditions. Had I been just as lucky as them and purchased the land, I don't think I would have been nearly as successful.
It's a very interesting question, especially given the fact that most of these wine producing families have owned the property for quite some time. There is some value to land selection given that many were searching for land to farm - though they likely did get lucky to have the "terroir" they have that produces good wine. In some ways, I've begun to think that as the number of wine producers grows rapidly the industry is becoming more and more into a real estate investment play at its core with wine as a method to generate additional cash on an appreciating asset. That being said, the Mondavis in particular are a bad example of this as they have managed to create an incredibly successful brand on top of that real estate investment - however as we have gone through this class I've found this to be the exception not the rule.
ReplyDeleteThrowing in an optimistic perspective - in addition to luck, there is an element of passion and pleasure-seeking that also led to this particular ecosystem and economy. There may have been other more practical uses of the land, such as keeping it as a dairy farm or growing other high-value crops such as what we've seen in the Salinas area. But Napa Valley is often described as God's country, with both abundant resources and natural beauty. I have to imagine that such a location also motivated the desire to build a business in wine. This decision to prioritize human enjoyment also translated nicely to the food and hospitality culture that subsequently developed in the region. And the theme continues to reverberate in brands such as Far Niente - where quality, enjoyment and leisure are prioritized and perfected as a purchasable art.
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