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When generational leadership changes at a winery



The drinks business reported the other day, based on a 2013 interview, that Aubert de Villaine is “training [his] nephew, Bertrand,” to take over the Domaine de la Romanée-Conti. That must surely have caused some to wonder if Burgundy’s most famous winery will still be the same when Aubert is gone.

My 2 cents: I doubt, actually, that the change will have any impact on DRC’s quality, reputation or price. Bertrand has worked alongside his uncle for years; the de Villaines have been preparing people for a long time. This entry, from French Wikipedia, states that, as long ago as 2009, Aubert “presented his nephew Bertrand” as his “futur successeur.” Two years later (2011), the online magazine for American Express reported, “[P]eople are watching closely as [Aubert] grooms his 40-year-old nephew, Bertrand de Villaine, to take over.”

 In other words, many times, over several years, the de Villaines have prepared people for the changeover. One certainly can appreciate, in retrospect, with what careful choreography the family has rolled out the succession, fully understanding that collectors invariably get nervous when something changes at their favorite winery: the loss of a prized vineyard, a buy-out, a change in barrel regime, financial difficulties, all these can be major causes of worry. But a change in top management, with its commanding vision of winemaking style and technique, is perhaps the most concerning, and surely prompts people to “watch closely,” especially when the wines are among the most prestigious and coveted in the world.

I can think of few things that are as emotionally fragile than the connection people have with a favorite winery. You may own a stock: it goes up and down: you ride with the tide. With a winery, as soon as the perception hits that it’s changed for the worse, it’s almost impossible for the proprietor to correct course. So many things can go wrong and derange the winery-consumer relationship. Think of all the products that have had to go into damage control, not because their quality actually suffered, but because doubt had been strewn in consumers’ minds. And when it comes to succession at wineries, things don’t always go smoothly. The classic example here in America is, of course, the case of Robert Mondavi Winery, where the succession—let’s face it—was a disaster. This is not to say that anyone did anything wrong, just that somehow misperceptions were allowed to spread, which led to actual impacts on sales, and the next thing you know, the Mondavis are out and Constellation is in.

I could cite many other examples of failed successions. Napa Valley alone is strewn with the remnants of once-great wineries that slipped after their founders ceded control. What are the lessons to be learned, then, concerning succession, for wineries that wish to remain vital for generations? One is to make sure than someone—a son or daughter, a nephew, anyone close to the family—is ready, willing and able to step in when the time comes. Second, the family has to thoroughly saturate the future leader in best practices; even the greatest winemaker, if she takes over the helm of a great winery on short notice, will require a period of time, usually measured in years, to get up to speed. A young family member who’s been working alongside the father all his life can much more easily step into dad’s shoes.

Finally, the older generation has to prepare the general public well in advance of the coming shift, not spring an overnight surprise on them. Wine consumers do not like surprises. As we’ve seen, this careful fore-warning is something the de Villaines accomplished with superb finesse and timing, which is why nobody is going to worry about DRC’s future under Bertrand’s leadership.

  1. Bob Henry says:

    Aubert’s winding down his DRC contributions could be a godsend for California: his joining his brother-in-law Larry Hyde in spending more time overseeing Hyde Vineyards and the HdV bottlings.

    And mentoring protégés here in The Golden State.


  2. Bob Henry says:


    “Larry’s partnership with de Villaine, who also happens to be his cousin’s husband.”

  3. Bob Henry says:

    On the subject of the generational transfer of wealth (such as winery assets) to the next familial generation . . . a subject that Bill Harlan has been thinking deeply about for years.

    From The Wall Street Journal “Main News” Section
    (July 1-2, 2006, Page A1ff):

    “A Successful Vintner Pours His Passion Into Dynastic Dream;
    Europe’s Wine Clans Inspire Mr. Harlan’s Grand Plan;
    Grooming a Teenage Son”


    By Julia Flynn
    Staff Reporter

  4. Very important topic- which is why succession planning is frequently a theme at industry gatherings like the Financial Symposium and Unified. Unfortunately, the US government puts many more roadblocks than the Frrench do to smooth multi-generational transfer of businesses, be they wineries, cotton farms or corporations. (read inheritance taxes etc.)

    Further examples of CA families doing grape and wine succession well, despite the odds: The Ledbetters of Vino farms, the Langes of Lange Twins and the Smith family of Paraiso.

  5. Bob Henry says:

    Sustaining a California vineyard/winery to the third generation is incredibly difficult.

    (I believe Rob McMillan of Silicon Valley Bank has written about this subject on his wine blog. Hey Rob, chime in here with some statistics.)

    Mom and Dad founded the vineyard/winery to satisfy their ambitious (read: “mid-life crisis”?) yearnings.

    Their kids — raised in an urban environment before moving to “wine country,” and sent off to college in major urban centers (e.g., San Francisco, Los Angeles, New York, Boston, Chicago) — feel “put upon” to join (and sustain) the family business when they would prefer to pursue their own ambitions outside of agriculture.

    News reports like these underscore that dynamic tension:

    “West Coast Wineries Are Up for Sale — Quietly;
    A wave of recent deals show investors see opportunities in wine,
    while owners see an exit strategy.”



    “… While small wineries can succeed by selling most of their inventory direct to consumers and large producers have muscle with wholesalers, those in the middle — annual production of 5,000 to 15,000 cases, for example — can’t get much attention from distributors unless the brand is hot.”


    “… ‘I’ve never seen more wineries for sale in California than there are today,’ [said Charles Banks, who through investment groups such as Terroir Selections purchased Santa Barbara Syrah specialist Qupé in October and Napa veteran Mayacamas Vineyards in April.] … Banks … estimates that between 30 to 50 percent of California wineries are either in financial difficulty or aren’t as profitable as they could be.”

    And this press release:

    “Over the last year [2014?] there have been more than $335 million in sales of vineyards, vineyard estates and plantable land in Napa and Sonoma Counties. This doesn’t even take into account confidential sales or wineries.” – David Ashcroft Real Estate

    [Link to press release by real estate firm is no longer active.]

  6. Bob Henry says:

    Quote from the Los Angeles Times “Business” Section
    (April 24, 2016, Page C9):

    “Transitioning a family business to the next generation isn’t easy, said Ken Ude, director of the USC Marshall Family Business Program.

    “Only 30% of family-run companies make it . . . from the first generation to the second. Only 12% make it to third generation and less than 5% make it to the fourth generation.”


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