The State of the Doon: A (Possibly Supererogatory) Kvetch with a Moderately Happy Ending

Maybe not enough time has gone by to really breathe the deep sigh of relief that I am longing to breathe. And maybe I’m being a bit indiscreet in talking about matters that are generally not spoken about so openly.

I almost lost the Doon. Not because the wines were no damn good. Really, rather quite the contrary.1 After selling off the large brands eight years ago, it proved unexpectedly to be monumentally difficult to right-size the company, i.e. find a scale that was profitable, whilst remaining more or less congruent with my truest values and the stated aspirations of the company.2,3 Further, rebranding, is/was, as they say, a bitch, or at least it would so appear in an age of complete information (and misinformation) overload.4 There is still an enormous amount of misleading noise that continues to circulate about the company, or the “brand” as it is known, even so many years after the sale of Big House, Cardinal Zin and Pacific Rim.5
Big House Red
We came perilously close to the edge with an impatient lender, who was tired of seeing red ink, and, despite the fact that the company possessed significant assets, and the amount borrowed was relatively paltry relative to those assets, the aforesaid lender remained uninterested in extending the precious lifeline of a credit facility. This was despite evidence that the service of the debt was, at least to my green eyeshade wearing viewpoint, more or less a morçeau de gâteau, a piece of piss, as the Brits would have it; indeed, certain structural elements had been put into place that would allow for the virtual certainty of sustainability if not imminent profitability, but “loan fatigue” as it is known in the business had enervated the banco to the point where it had to lie doon in a darkened room with cold, witch-hazel soaked compresses on its febrile P and L statements.
Book keeper
I learned a lot about people, viz. bankers, lawyers and other diverse algal slash muciligenous life-forms, specifically how utterly greedy and gratuitously craven they could be. But mostly I learned that it is a very cold world; you have to look out for yourself and cannot necessarily count on having an angel at your back simply because your cause is virtuous (or your wines have much improved).6
Angel
The company is now making money – not tons of dough, of course – but on a nice pleasant upward inflection, one that will take some time to build to any real significant accumulation of capital density, if you will. Our new lender7 has us on a relatively short leash, which is not entirely a bad thing,8 as the very last thing we wish for is to be caught in a cash crunch, unable to promptly fulfill our obligations to our sometime long-suffering vendors. And yet there are a number of projects that I am extremely keen to move forward and prontissimo of course, it goes without saying. These projects largely focus around getting the very ambitious Popelouchum germplasm-diversity plantation back to full-speed ahead, as this project has a non-trivial temporal horizon, which, to my great consternation, already seems to have begun to recede into the mid-distance.9

So, instead of spending my days in glorious rapture at Popelouchum, sunscreen-slathered, Tilley hat bedooned, diligently at work in the springtime castration of the male flowers of carefully selected vinifera grapes (with the intention of pollinating them with a worthy male parent),10 and in the fall, making careful observation of the results of these breeding experiments,11 teaching myself the rudiments of plant genetics in the evening hours, here’s how I spend my time these days: repairing and goading/enlivening our wholesaler distribution network.12,13,14
Flowering grape cluster
I am far from a maven on the subject of the 3-tier system in the U.S.; there are some strong plusses and minuses to it, but the amount of effort it takes to sell wine through the system is now truly ridiculous for wineries of our size who are on a limited budget.15,16 We have a relatively heterogeneous distribution network – a few large distributors (generally relics from the Big House era), a few very small ones (possibly a function of my desire to distance myself from the Big House association), and a number of mid-sized ones, a scale which seems to work reasonably well for our portfolio, apart from the vexatious fact that they seem to continually be getting snapped up by the large ones.17
Enormously large wholesaler warehouse
I’ve learned a lot of interesting things in this quest to shore up our sales network, many of which I should have assimilated when I was in junior high. Some of our distributors have been enormously successful in selling our wines; others significantly less so. But, it’s the same damn wine! What inferences might be drawn as to why the wines work some places and not in others? I have to think that it comes down to the matter of perception, and as such I can’t help but feel like I’m back in junior high school again. When you’re in junior high, you’re either riding high (relatively speaking) with a coterie of friends who think you are the coolest, or you’re on the outside, looking in, which can be very lonely, indeed. (In elementary school, a few years prior, this dichotomy was represented by whether or not you were believed to possess the “cooties” contagion by the alpha members of the savage clan.)
Bratty kids
Now, as grown-ups, if your brand is large enough, you don’t really care if you’re thought of as being cool or not.18) (You are rather more focused on whether you are growing marketing share and/or making reasonable margins.) But if you’re smallish to middling as we are, how you are thought of by the people who sell your wine is absolutely crucial; they are truly the gate-keepers, and will determine whether that Cornas-loving independent retailer somewhere in the wilds of the mi-ouest will ever be shown Le Pousseur. Dealing with wholesalers (properly) requires a significant amount of care and feeding. The point of all of this discussion of the vagaries of the wholesale system is that while I am personally quite fond of a number of our distributors, the reality is that excessive reliance on this channel makes us somewhat subject to the whims of fashion – are we hot (or not) this decade? And more significantly, it makes us subject to any number of forces well beyond our control. Will the brilliant, sensitive and responsive fine-wine distributor with a soft spot for Rudolf Steiner, suddenly get acquired by an Evil Mega-Wholesaler from, say, a major Southern state?
Rudolf Steiner
But, most significantly, I am just tired of all of the schlepping; I would like a simpler life, and not have to work so hard, spending so much time on airplanes and air-conditioned hotel rooms.19 We must learn how to get a lot better at selling our wine directly to customers (DTC), which, if we play it right, could take a tremendous amount of pressure off of the wholesale channel.20
Sisyphus
The light recently went on when I realized that not only am I planning to engineer possibly the coolest grape-growing project in recent wine growing history, i.e. the creation of perhaps 10,000 new grape varieties at Popelouchum, through a very focused grape breeding project,21,22 but perhaps I needn’t necessarily wait until the company is throwing off massive amounts of cash to finance this laudable, if slightly risky, venture. The project is not obviously monetizable – it will take a very long time before it yields any real tangible results – but it is a supremely interesting project and one that has potentially real value to the viticultural community as well as to the larger world.
Enormous diversity of grape population
I am turning over in my head the opportunities we might be able to proffer to a potential investor. For an investment of X, perhaps you might have a grape variety named after yourself, and achieve some sort of immortality. Maybe the Bruno Koslowski grape, for example, might become the next Pinot noir? The Wanda Berkowitz grape the next Nebbiolo?23 I would certainly wish to design the creation of this multitude of new varieties to exist as something like “open code.” No doubt that figuring out the logistics of just precisely how to do this might be a bit challenging, but let’s say you are a viticulturist somewhere in the world, for the investment of Y, you might be able to tour the vineyard (when it comes to fruition), and pick out the one or two or ten varieties that truly speaks to you, and secure cuttings (phytosanitation restrictions permitting, and all waivers duly signed) of same to take back to your planet of origin – Texas or Australia or South Africa or wherever. Maybe it would just be the ability to attend a great party once a year at the incredible site or the ability to purchase Bonny Doon wines or the first produce from Popelouchum at a significant discount?24 But, it would seem that there is certainly something of real value that we might offer above and beyond the knowledge that one has done something useful.
CSA produce, fava beans
But for now, it’s pas mal d’aeroports and beaucoup de Marriots and Daze Inn and highly caloric winemaker dinners (I try to remember when I can to eat vegetarian while on these trips or at least to skip at least one of the intermediary courses), and the Midwest in the summer and the Southeast in the spring and winter, and remembering to pack my 200 mg. of Zen in order to stay focused at all of those sales meetings.
200 mg. of Zen
I’m writing this to you from a Starbucks in a very pleasant town in the Midwest, one that I will certainly visit again soon; the 3-tier marketed schleppeur du vin follows Nietzsche’s Law of the Eternal Return. But jet lag and insomniacal thrashings and Nietzsche aside, there is a slight spring in my step, knowing that with a little planning and the beneficence of some enlightened Doonstahs, this need not be something I will do forever.

  1. I truly believe – and I am one fussy character – that the Bonny Doon wines greatly over-deliver in the price/quality relationship, at least by New World standards; this, counter-intuitively of course, is part of the problem, i.e. we use fairly expensive grapes in wines that occupy challenging market niches. I swear that if I hear one more time from a wholesaler or retailer or consumer, “Show me whatever you’d like as long as it isn’t Syrah,” I will…” Well, I don’t quite know what I would do. But it continues to bug me that the most interesting wines that we are making – the Cigare Blancs (normale and Réserve), the sundry Syrahs, the premium Rhône blends (you know which out of this world wines I’m talking about), are among the wines that are begging comprehension, … even still. []
  2. I have written elsewhere about the poignant irony of producing wines from bordelais cépages chez Doon. Le Randall d’antan – the one given to Wildean aphorisms like “I will not kiss lips that have (recently) used oak chips or “It takes a strong dose of courage to swallow wines made from bordelais cépages” – would be spinning in his Graves, as it were. []
  3. While idealism is an exceptionally admirable trait, perhaps my initiative to produce wines that were somehow more “pure” than those of the pre-existing line-up was not received with as much éclat as I had hoped. That we were producing more biodynamic wines was greeted with a yawn, as was the quixotic initiative to introduce ingredient labeling to our wines. After the sale of the big brands I chose to eschew the high-tech, “unnatural” process of cryo-extraction, which we had previously used in the production of the insanely popular and highly profitable product, Vin de Glacière, in favor of the decision to patiently and virtuously await the (significantly less dependable and far more expensive) benign arrival of botrytis, the “noble rot.” But, what price nobility? []
  4. Like many other things in life: rebranding is much harder than you expect, takes much longer, and is way more expensive than you could ever imagine. It should only be attempted by a qualified marketing professional, one who understands the complex intricacies of the ever-changing wine business. (That totally rules me out.) I am Kemo Sabe, moi, I who know nothing. The problem, very simplistically stated, is that everybonny knows, or imagines he or she knows what the wines of BDV are like. (Fun, fruity, relatively inexpensive and insouciant – just check out those funny labels! – is the response that most often comes to mind. But this view of the brand or the current State of the Doon, just no longer obtains, as I will protest till I’m blue in the face.) []
  5. The oddest and most disturbing thing I often hear is that it is believed by some that I no longer own Bonny Doon, and that I’m enjoying something like a leisurely retirement, presumably playing a lot of golf. I am playing a lot of gulf – the chasm that exists between what I would truly like to be doing and how I actually spend my days. []
  6. Fortunately or unfortunately, I’ve always had the fantasy that I was in some sense untouchable, that no matter how bad things looked, a path to safety would emerge. Of course I now realize that it is not through an external agency that this path appears, but rather through lots of thoughtful if gut-wrenching searching, a lot of work, and some fortuitous luck thrown in. []
  7. To whom we are incredibly grateful. []
  8. Though not entirely a good thing either. It has not quite reached the unwillingness to purchase green bananas phase, but I am arithmetically challenged as far as having a fairly sucky denominator of truly productive years remaining. []
  9. The most imminent project calling out for completion is the excavation of a reservoir, allowing us to store water to irrigate young vines and fruit trees, but as importantly, bringing avian life to the site, and by extension, freshness and vitality, which all of us could use in no small measure. []
  10. Vinifera grapevines are hermaphroditic and will self-pollinate, which is not what you want to see happen, as it will lead to the expression of recessive genes, and far less interesting and robust progeny than you had with the parents (vegetatively propagated from cuttings). []
  11. In summer, it’s tying up vines, suckering, thinning and hoeing, the latter activity being about as Zen as it gets. []
  12. This mostly means lots of visits to the sundry markets, speaking to the salesmen and “brand managers” at sales meetings, “work-withs,” sometimes known regionally as “ride-alongs,” the perils of which (mostly having to be a passenger in a car with a salesperson who texts while driving and steers with his knees, whilst inputting an order before the witching hour of 4:00 p.m., when all orders for next day delivery are due, recklessly weaving in and out of traffic), I am certain I have shared with you at least once. Then there are the “trade lunches” and “winemaker dinners.” Truly no one likes eating out at nice restaurants more than I do, but the sheer enormity of animal protein as well as the butter and cream-enriched everything proffered at these dinners has not changed significantly since I wrote, “Lard, Randall, My Son,” so many years and eddying arterial circuits ago. []
  13. But there’s also the issue of replacing certain distributors who for whatever reason are not doing the job. This is somewhat analogous (and almost as much fun) as breaking up with a romantic partner. Not that there is truly much heartbreak associated with these separations – business is business after all – but one can’t help but ask oneself just how one went wrong. Was it us or was it them? (Note, it is usually, but not always “them.”) And what was I possibly thinking when we started up with them in the first place? But you wonder: Maybe if I had just paid more attention, visited the market more often, perhaps the relationship could have worked out differently. When I go on these visits to non-performing markets, the first question I ask myself is: Can this relationship be salvaged, though I usually know the answer to that question before I go. So, I’ve been spending a lot of time talking like a Dutch Uncle to underperforming distributors, meeting potentially new distributors, attempting to gauge the sincerity of their affections and whether their promises are real or are they simply empty pretty words. And of course, it is conceivable I am on these distributor dates because we have on a few occasions been the dumpee rather than the dumper; this has taken a little bit of getting used to, as certainly in the heyday of Big House this would essentially have been unthinkable. []
  14. These distributor “dates” have a lot in common with so-called real romantic dates, i.e. figuring out if your prospective partner has two dimes to rub together, whether you and your prospective partner enjoy anything like ideological/philosophical compatibility (what percentage of their portfolio runs 15+% EtOH?). Do they in some sense really “get” you, will they remain true, i.e., will they return your calls long after the courtship is over? Because, it must be noted, your relationship with your wholesaler is not strictly speaking a monogamous relationship. Your wholesaler has quite a number of other suppliers in his stable; your potential partner has a virtual hareem, if you will. And to continue the analogy, you don’t want to be just a pretty face in the crowd; you want to know where you fit in the overall ecology, where you stand in the uxorious ranking. []
  15. Its utility has largely broken down for both mid-sized wineries as well as for mid-sized distributors. Wineries on the very large scale and a select few on the very small scale generally seem to be the most successful. In the middle, where many of us live, it’s just rough. []
  16. The modern 3-tier wholesale wine and liquor distribution system in the U.S. is, as you know, a direct outgrowth of Prohibition, after which the new wholesale wine and spirits industry (many if not most former bootleggers) were charged by the individual states with the task of writing the legislation that would regulate them. (N.B., this has been in some cases the cat guarding the henhouse.) The 3-tier (supplier/wholesaler/retailer) system was in most states largely designed to insure the orderly disposition of goods through the relevant arteries of commerce, such that all players would receive a fair “cut” of the action. The resemblance of the 3-tier system to the Mafia practice of dividing up territories and proscribing appropriate mark-ups to such industries as narcotics, prostitution and gambling, is quite striking. But, to its credit, for many years the system has worked quite well in bringing wines and liquors to market in an orderly fashion. []
  17. I have in fact introduced our wines to a new distributor at one sales meeting, only to hear at the end of the aforesaid meeting that the company had just been acquired by a significantly larger (and unfortunately evil) one, thus utterly negating the utility of that visit. []
  18. Though “cool” is generally desirable, all things being equal. If you’re a large brand, you probably have a young millennial on the payroll, charged with navigating FaceBook, Twitter and InstaGram, in the vague hope of understanding how social media might work in attracting members of this mysterious demographic to your generic and generally beside-the-point brand. (You are most likely keeping your millennial in hipster cocktails and cappuccino, but probably not accomplishing much else. []
  19. While we will never cease doing business through the wholesale channel – it’s quite crucial to maintain a presence or visibility on a national scale – when you have a limited amount of wine to sell that is highly in demand, you just don’t have to work as hard to sell it. This is Supply & Demand 101. []
  20. I am also utterly persuaded that the existence of Estate wines, specifically an Estate bottled, dry-farmed Le Cigare Volant and Le Cigare Blanc, will represent a much more compelling sales proposition through whichever channel it is sold. This is perhaps too important to mention in a footnote, but we are working quite diligently to see this vineyard established. []
  21. The thought here is to try to identify unique individual plants that may be particularly well adapted to the growing conditions of Popelouchum, but also, more broadly, to world-wide growing conditions, which have been sufficiently altered due to global climate change. Further, the project is really a deep study of the proposition of true sustainability. Can grapes (and other crops) be cultivated in something like a truly self-enclosed system or at least with absolutely minimal inputs? Can we find a methodology that will lead to the creation of truly unique products, thus capable of forever competing on the international stage, which will confer a greater degree of economic sustainability? But the real value is, as I believe, the creation of a massive amount of new germplasm, which is potentially an extremely valuable gift to the future. []
  22. But also to observe what a suite of grapes, all slightly different one from the other, but still related, are able to contribute to the complexity of an utterly unique wine. []
  23. This is not to say that the identification of what constitutes a brilliant grape variety will be particularly easy While it is relatively easy to identify some of the overt indications of wine quality – smaller clusters, aromatic or flavor intensity, evenness of ripening, disease resistance, etc., some of the more subtle indicators – the ability to transparently transmit soil characteristics, most notably, may be a lot more difficult to detect. []
  24. It will be a little while before we have wine or olive oil in sufficient quantity to purchase, but I could certainly see subscribers participating in some sort of CSA, with a lot of fava beans (they’re very good for enriching the soil) coming their way. []

27 Responses to “The State of the Doon: A (Possibly Supererogatory) Kvetch with a Moderately Happy Ending”

  1. James Lauters says:

    Wow … as always I am just awestruck by your thoughts and insight. Just a great read! Thanks so much.

    • Thanks so much. I had been a little bit stuck in the writing department; perhaps it was just a matter of hydraulics, with this material burbling up, owing to the build-up of pressure.

  2. Carl Helrich says:

    Randall, As always you have provided a wonderfully lucid and transparent description of what it takes to run/be part of/manage/ride the waves of a winery with a loftier goal than simple balance and P&L sheets. It’s amazing to see your thought process as it picks its way to learn from the past yet find a path to the future. I think we see more of the you in here than you think we might.

    I have dozens of thoughts connected to this post, perhaps your most revealing, although I am a bit shy to post them all here. Where we are on the east coast, we struggle not so much in the dichotomy of DTC:wholesale, but rather in the cash-flow vs. premium winemaking choices. Both are driven by financial concerns, but figuring out how to do one without compromising the other has been my greatest struggle.

    This is not so much a blog post, but rather the start of a larger discussion best shared with a group of like-minded individuals and several bottles of mind-blowing wines. –Carl

    • Carl, thanks so much for your comment. Indeed, more often than not there appears to be a real dichotomy between the path with heart and the path of commercial success/survival. I think that it really takes a lot of skill, luck to find a way to make these two paths converge. I’m a bit of a slow learner, so it’s taken me a while, but I think that finally I may well be on the path to bring these streams together.

  3. Simply brilliant stuff RG! And thank you for raising the usually taboo subject of d-i-s-t-r-i-b-u-t-i-o-n which is only just short of m-a-r-k-e-t-i-n-g and p-a-c-k-a-g-i-n-g on the hate list for many wine lovers and participants in online vinous chatter. For most of these people, wine should be good, good value, “natural” and sold – ideally at a loss -in plain packaging at the cellar door by unpaid gnomes (or the winemaker’s least fortunate family members).

    • D’accord on the industry’s willful opacity on some of these subjects. But I’m sure that there analogous problems in every industry with some artistic component – publishing, film, music, the art world – where the business of bringing the product to market is rather less rarified than the “product” itself. As I’ve lamented elsewhere (and often): the wine business, while always a business, has become rather more so, with a very different set of expectations. Maybe this is a romantic fantasy, but it seems that at least at one point, people were in the business out of a sincere love of the product, and the expectation of profit was somewhat secondary. Not so much these days…

  4. Alan Goldfarb says:

    Randall: thank you for sharing some of these and other thoughts with me my when we spoke for my Grape Collective interview (www.grapecollective.com/randall grahm). It was one of the most poignant interviews I’ve written in my career and that’s because you’re one of the most thoughtful, kind, and bright people in the wine industry. We’re all the better for your existence.

  5. Dan McNamara says:

    I read every word, understood about 70% but am convinced I need to buy your wine.

    • Indeed you do. They’re not half bad. Thanks for your comment.

    • Robin says:

      Randall is modest. They’re more than “not half bad”; they’re 99% delicious. (The 1% was the Querry, which I wanted to love but, sadly, found too dry. Also, bubbles and I aren’t always friends.) The Contra is especially toothsome. And affordable. Buying some tomorrow!

  6. Tom Kruse says:

    Good for you Randall.
    We all think you’re great!

  7. Marlene Rossman says:

    Although I am not a Gen Xer nor a Millenial (sp?), I think you rock!

    • I’m not quite sure what the Millenials or Gen-Xers quite make of BDV. I don’t think the hipness quotient is really immediately discernible to the youngstah, would be Doonstah. Does sincerity count? Irony certainly does, but perhaps that was an artifact of BDV 1.0.

  8. Ray Sliter says:

    I’ll just go ahead and say it. You are a prophet. Almost every one of your numbered points read like dreams, realizations or fleeting thoughts I struggle to remember the next day. Thank you for spelling them all out for me in this illuminating composition. The lonely road to DTC : one wine club membership at a time.

    • Thanks so much for your comment. Indeed, you are absolutely right; building the sort of long-term, “sticky” customer affinity is a major undertaking. It’s a bit of a fantasy of mine that if I can get our customers out to San Juan and show them the magic of the place, the lightbulb will go on, in a way that cannot be replicated simply by offering them a great “deal” on a particular bottle of wine, even an exemplary one.

  9. Molly Wieser says:

    Should it be just one click from this blog to paying for an unconditional share in your ventures (because everyone who reads is sure it will be worth it), or at least to buy some wine? Potato salad is not our thing…

    • Of course, you’re right. I do sometimes get a bit ahead of myself. But when the crowd-funding program gets a little (lot) more solidified, you will not be more than a click away.

  10. Dave DeMent says:

    As long time D.E.W.N. members my wife and i are looking forward to long and prosperous continuing relationship with BDV …. Oh and more grenache please, the fortified sweet pink one of years ago was truly, one of your most memorable

  11. Thanks so much. ¡GARNACHA! (The Strong Pink Wine). We couldn’t call it that on the label, but that’s how I always thought of it. It was very cool, strange juice. While I am in total agreement with you about the brilliance of fortified pink, it does appear that a substantial plurality of our customers would prefer jumping off a cliff to the receipt of anything sweet from BDV, or at least that’s what our intelligence reports. #forgivethemfortheyknownotwhattheytaste

  12. judy says:

    ok, what happened to the “Vin de Glacier” desert wine? I moved away from SC Mtns to the Sierras years ago (’80’s), but look for this wine whenever I am back in the area- but to no avail. Best ice wine ever. Whatever shall I do?

    • To my great economic detriment, but possible spiritual advancement, it was after the sale of Big House and Cardinal Zin, than I decided I would publicly eschew highly interventionist winemaking (and tell me, what’s more interventionist than putting grapes in a freezer). So, we ceased the production of the utterly popular (and excellent) Vin de Glacière, and instead produced in rare years a dessert wine called Le Vol des Anges, and a few years later, Vinferno. Both of these wines are truly superb and arguably superior to VdG, but have not yet enjoyed the commercial cachet of the VdG. (VdG somewhat less expensive as well.) #nogooddeedunpunished.

  13. Bruce says:

    Put me down for being very appreciative of your wine biz musings. Far too much ‘vanilla’ in the wine industry. Thank you for the Neapolitan approach! Also glad you made it through the ‘Rocky Road’ phase. Bean-counter interactions are never fun.

    Hope there’s room for Gruner Veltliner in the upcoming/future vineyard.

  14. […] or at least it would so appear in an age of complete information (and misinformation) overload.4 There is still an enormous amount of misleading noise that continues to circulate about the […]

  15. Wine Mule says:

    So what ever happened to Mission (Listan Negro) grapes and bio-char?

    • Biochar still cooling its heels at our Popelouchum Vineyard. Listan negro, while brilliant in the Canary Islands, maybe not my first choice for San Juan Bautista. #patiencegrasshopper

Leave a Reply

* Required
* Required, Private

BATAAN DEATH MARCH

BATAAN DEATH MARCH - Book Tour

Randall Grahm Wine Maker Dinner with Chef Cindy Pawlcyn

Saturday, February 21
6-10pm
Cindy's Waterfront Restaurant @
Monterey Bay Aquarium
Ticket price $180/pp
Ticket sales begin Dec. 15
866-963-9645

View more events

@RANDALLGRAHM

MINISTRY OF TRUTH

SPIRITUAL GUIDANCE

 

2009 Le Cigare Volant RéserveElective Affinities

"Brilliant matchings of wine & literature"

CIGARE of the FUTURE | pg 253
with 2009 Le Cigare Volant ~
Réserve

More info on the Wines of
Bonny Doon Vineyard