Why Big Corporations Can’t Make Fine Wine
Last year, Michael Mondavi rattled the cages of corporate producers of wine – including the largest, Constellation, who purchased Mondavi wines in 2005.
As reported in an article in Harpers, Michael Mondavi bluntly states major corporations are not capable of success in the fine wine market. “…only independent or family businesses had the passion to succeed at this level.”
“When big corporations enter, those brands lose their passion, those brands lose their style. The chief financial officer starts making winemaking decisions,” he said. “I had the partial luxury of running a publicly-owned company [Robert Mondavi] for 11 years. The ability to ask the question ´how do I make better wines – what’s the right thing to do?’ evaporates. You start talking to the chief financial officer and ask the question ´how do I improve earnings?’, not `how do I make better wines?´, `how do I improve the return on assets?´, not `how do I establish a better quality vineyard for 10 or 20 years from now?´.”
“The questions that CEOs are forced to ask are quite different to the questions that independent proprietors take in running their own businesses. Wines in the consumer product arena are ideal for corporate ownership but when you move from that style of wine to fine wine it’s passion and dedication that’s needed.”
Clearly, independent proprietors have financial considerations that influence their decisions as well. The difference, however, may be that the artisan producer of fine wines sees the quality as a concrete manifestation of a very personal vision. Each vintage is a reflection of the artisan’s success or failure in achieving that vision. Every year the outcome is personal. And, every year, the owner is emotionally invested in repeating and exceeding each success, as much for personal validation as for financial remuneration. I believe this is the source of the “passion to succeed” that Mondavi attributes to independent and family wineries.