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THE INSIDER'S NAPA / WINE

The patriarch in a storm

The valley is still watching Robert Mondavi. This time, to see how he faces the turmoil in his family business.

June 11, 2003|Corie Brown | Times Staff Writer

Robert Mondavi, the patron of Napa Valley, shows no signs of slowing down as he approaches his 90th birthday. He remains the man of the grand gesture, throwing a gala dinner party for 90 guests last week during the annual Napa Valley wine auction, a charity event he founded 22 years ago. Afterward, he claimed to have kissed every woman at the party.

But don't mistake him for a mere bon vivant. Mondavi is back at work, taking a hands-on role in the direction of his namesake wines.

The job is as monumental as the man.

After four decades as the defining force in the Napa wine industry, his company is in turmoil. Mondavi has staked his considerable reputation on a classic wine style that has fallen out of fashion, while his company's financial footing is slipping on the worldwide glut of wine. As he has begun charting new directions, there has been friction within the family.

Vintners across the valley are fixated on the drama, worried that Mondavi may have a cold that could be as contagious as his success. And they're worried that there is no one with the stature to replace the man who showed them how to become world-class winemakers, in the valley or anywhere else in California.

Mondavi was among the first to declare that Napa wine would rival the greatest vintages of Bordeaux, and he pushed to improve the quality of California wine in the 1960s. What he learned, he shared, setting a standard for cooperation that he insisted others follow. Wherever he made marketing inroads for Robert Mondavi wine, he also extolled the virtues of other Napa vintners, believing Napa's wineries would rise or fall together.

"How they come through this will affect everyone in the valley," says Tom Shelton, president of Joseph Phelps Vineyards. "Robert Mondavi's image is critical to Napa."

The troubles started two years ago, when wine critic Robert M. Parker Jr. called Mondavi's 1998 and 1999 vintages "uninspiring." Mondavi was producing "too many wines lacking flavor intensity," Parker wrote in his newsletter.

The Wine Spectator, another influential voice among wine's top echelon of drinkers, piled on more criticism.

Parker changed his tune when he tasted Mondavi's 2000 vintage. But he credited the turnaround to the installation of new oak fermenters and the hiring of renowned Bordeaux winemaking consultant Michel Rolland, not to the family's winemaker, Robert's son Tim.

The damage was done. Mondavi wines lost cachet with the inner circle of wine enthusiasts, the cutting-edge consumers who drive demand and prices.

The weak reviews, however, quickly became a secondary issue for Mondavi, as the excesses in California's wine production became apparent in 2002. More than 75% of the 9.4 million cases of wine that Mondavi produces each year are under its Woodbridge label, a grocery-store brand that sells for $6 to $8 a bottle. The glut ushered in $1.99 wines like Charles Shaw, hitting Woodbridge sales hard.

"Woodbridge is being decimated by 'Two Buck Chuck,' " says Bud Leedom, an equity analyst with Wells Fargo Securities. "They are at the worst price point you could be at in this market," he says, adding that there is little the company can do beyond potentially meaningless discounting and advertising.

The Robert Mondavi Corp. has been a publicly traded company since 1993, making the family-run winery a rare open book. On news of depressed profit, the value of Mondavi stock has plummeted. To lift the stock price -- down 22% compared with this time last year -- the company has put 10% of its vineyards, or 1,500 acres, on the sales block, along with one winery.

Last month, the company took the added step of laying off 100 people, or 10% of its workers. After Tim Mondavi protested the cuts, the company announced he was taking an unscheduled leave of absence, creating the impression among investors, as well as neighbors in Napa, that the winery was operating without a guiding tastemaker.

Not so, says Michael Mondavi, Tim's older brother and the family member now heading the company as chairman of the board. "Tim is our wine master. Tim has traveled the world over. He is without a doubt one of the best wine men around."

In a joint interview with his father, Michael Mondavi dismisses the speculation, saying Tim has simply taken his first vacation in decades and has been "resting" in Hawaii. "He's back on Monday. Batteries recharged. Ready to go."

Robert Mondavi, ever the patriarch, dominates the interview, however. "When you have to make money in a corporate environment, you begin to cut a few corners. You can make good wine, but not the best," he says. "Woodbridge was a distraction," he adds, noting that a key mistake was associating the lesser wine with the Robert Mondavi name.

"He and I consistently had a difference of opinion on this," Robert Mondavi says, referring to Michael, who lets the backhanded slap pass without comment.

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