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Greg La Follette on selling Tandem

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I spoke with Greg right after the sale was announced. To quote from the press release: “Pete Kight, proprietor of Quivira Vineyards & Winery, has acquired Tandem Winery in Sonoma County in partnership with Tandem owner/winemaker Greg La Follette, who remains with Tandem and will focus on winemaking and viticulture.”

This is an important transaction, not only because Greg, who is De Loach’s executive winemaker and consults all over the globe, is an important winemaker, but also because it testifies to the financial difficulties facing so many family wineries, as well as the nation. On a more personal basis, Greg is a standup guy and an inspiration to an entire generation of younger winemakers.

greglafollette

S.H. Why did you sell?

G.L.F. My Dad fell ill with cancer, and it’s expensive, healthcare being what it is, so I needed the money. Dad had some shares [in Tandem], and Pete Kight came forward and said, “Not only will I buy your dad’s portion, but I’m interested in Tandem as well.”

Will there be anything different at Tandem?

Absolutely! I have more funding now. I don’t have to have a day job and work 100 hours a week, and have this be my weekend and evening job anymore. I now have a day job and it’s called Tandem. That is so cool. The quality of my life will improve, which translates into the quality of my wines being at least what they were. We could actually buy some vineyards and build a winery and really honor the growers who have been behind me for so many years.

Are you still with DeLoach?

To some extent. At some point I will depart entirely, but at the moment there are some really great young people I want to mentor. And DeLoach has been very good to me.

What is the impact of the recession on small family wineries like Tandem?

They’ll have a hard time dealing with this economic environment. It requires boots on the ground, pressing flesh with distributors. The big guys have the resources to get out there with key accounts and meet with them, but the little guys don’t have the time or money to get out there to Miami or Chicago to meet with people and say, Here’s why you should buy our wines.

How serious could things get?

We may be in for a bloodbath for small wineries. No one is looking after them. They’re being left to their own devices. You’re talking about a winery a week that’s being sold or went belly up: Flowers. Stevenot. Sebastiani. The wine industry needs a lot more expertise in the financial sector than it has now.

[This is Steve] I don’t know about you, but I was SO proud watching today’s swearing-in of President Obama. He was led through the Capitol by my former Mayor, Dianne Feinstein, and my former congresswoman, Nancy Pelosi. In the small world of San Francisco, our lives have crossed. These are two classy dames, in the words of the late, great Herb Caen. May history shine upon them and upon our new President.

  1. It is so sad what not only the economy, but also the three-tiered system, has done to small wine companies. The system makes it nearly impossible for any small company to survive. It’s nearly impossible to get out and about as a winemaker if s/he only produces several thousand cases a year.

    Big companies give their wholesale companies cash incentives to move wine through the system (said she, the former district sales manager with an eight state responsibility, including northern California).

    Economy of scale tells you that the rich get richer, and those on the other end of the production schedule have got to be very, very creative and forge some kind of relational bond that supercedes cash incentives.

    Is that even possible?

    And, yes, yesterday brought tears to my eyes.

  2. Morton Leslie says:

    I would love it if all wholesalers stopped doing their job for an extended period of time so that everyone who belly aches about them would finally realize the important function they perform in getting our product into the hands of the consumer. Are they perfect? No. Is there a realistic alternative? No. If you really want a difficult job, try being a wholesaler anytime, not just today in this terrible environment. Imagine being a rep selling wine who depends on commissions.

    Usually the wineries that complain or blame their failure on wholesalers are the ones who cant sell their wine in their own local market. The real problem is they usually have nothing that special to sell or they fail to hold up their end of the partnership they have with the wholesaler.

    All of the big, bad companies with the “unfair” advantage were small companies at one time. They just had the work ethic and smarts to do what they needed to do to grow. Today, there are hundreds of small wineries thriving and growing in the three tiered system. These small companies catch on to what is required of them on their side of the partnership. They make the wine the customer wants, or make the customer think they want it. And they succeed. Those that don’t, inevitably fail. It is really just a function of survival of the fittest.

    This downturn will expose the wineries that have solid business practices and solid products. They will do more than just survive.

  3. Right on Morton….making 1,000 cases of wine is easy when compared to selling 1,000 cases of wine.

  4. Good points. Morton.

  5. JD in Napa says:

    Thanks for the perspective, Morton.

  6. re: I would love it if all wholesalers stopped doing their job for an extended period of time

    Some might say that this is happening right now.

    In addition there is a big difference between _selling_ a product and merely taking orders.

    I would respectfully disagree with the statement that there is no realistic alternative to the three tier system, and that is selling direct. If you can’t get in front of the customer, you need to pull the customer to get in front of you, and this requires a different set of skill and priorities.

  7. To Morton Leslie, self proclaimed wine curmudgeon on Open wine Consortium:

    I worked with the three-tiered system for many years as a district sales manager for a wine company. I sold a LOT of wine for my company in the time I was a sales person. I was one of their top sales people, taking a company running $3 million in the red and turning that around into the black in only three years time. I averaged 65,000 miles a year, traveling to all but 10 states (mostly the deep south was missed).

    I have to ask if you’ve ever worked in sales, and I ask this with all due respect to better comprehend your level of understanding. You may have, I just don’t know. You’ve revealed very little of yourself on Open Wine Consortium. Perhaps you have your own blog with your own profile. I just don’t see it when I Google your name.

    My belly ache comes from working with wine writers in all US states, and knowing how – if I give them a wine sample – that if it’s NOT in a wholesaler’s portfolio in their state, they won’t/can’t even talk/write about it, because they don’t want to frustrate their readers.

    This is controlling the wine brands within states that AREN’T reciprocal, and they’re doing it illegally, if we are to believe the judgment of Granholm v. Heald. Illegal is illegal… Pure and simple.

    http://en.wikipedia.org/wiki/Granholm_v._Heald

    When something’s done illegally, we have reason – of the people, by the people, and for the people (do I have the sequence right?), to have objections for that which is unjust and not fair.

  8. Wow. Jo raises a question I was unaware of. This is something for an investigative reporter to tackle.

  9. Todd Quigley says:

    So exactly why did you decide to add politics to a piece about a winemaker, especially something that is just an opinion? Didn’t they teach you in journalism classes specifically not to do this ? This colors the whole article, and makes you look like a person full of their own self importance.

    Why is it so important that you make this statement that has absolutely no bearing on the rest of the article? If you want to bring politics into the subject of small, high quality wineries, vineyards and labels, you should have saved it for another seperate article.

    However, since you have now taken us into the subject of politics and the small, high end wine world, let me give you a view that you evidently did not consider: While I can only truly speak for myself, it is generally true that few winery, vineyard or wine label owners support policies that make their life harder, costs them more money and decreases their chances of operating a successful business.

    We are agricultural people and small business owners, and as such the policies of the three people you mentioned quite often run contrary to most of the interests of agriculture and running a small business in the black.

    It’s not that we are not socially concious and don’t want to help people and make the World a better place, it’s simply because more regulations and taxes do not help us to keep our businesses afloat, let alone profitable.

  10. Dear Todd, “So exactly why did you decide to add politics to a piece about a winemaker, especially something that is just an opinion?” The answer is because this is my blog, and as I explained when I launched it, I don’t want to limit my posts exclusively to wine and “objective” journalism. Although you’ll find that straight reporting constitutes at least 50% of my posting, I reserve the right to veer in different directions — and I am a person of strong political views. Sorry if it offended you. Thanks for your comment.

  11. Todd Quigley says:

    It’s not so much that I am offended, it’s just totally bizarre to close a piece on a person selling part of his label with a total sidetrack into something such as politics.

    One of the nice things about the wine world is that there is very little mention about politics except as to how it directly effects us.

    Maybe you should compare and contrast the stances of various politicians and how they effect the World of wine. For example, Rue Furch lost the district 5 supervisor slot to Efren Carillo because she is so against agg, while he was willing to work with us. They had two different visions on how to keep Sonoma green, and his kept more people employed.

    Anyway, Greg, Rick and I are doing a tasting for Ray Johnson’s class on the 10th. let me know if you want to come.

    Todd

  12. No 3 tier for me. All direct to customer sales. If you do not like the system fight it. You cannot kill a beast while feeding it.

  13. By the way the political thing was lame but I love your RRV book its very insightful.

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