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WINE: Family policies a tool to keep business separate

Amid the tax, estate and strategic planning that goes into helping a family business survive from generation to generation, wine industry families such as the Seghesios of Alexander Valley are increasingly codifying guidelines for relationships between relatives and the business.

In the wake of a jolting 1993 tax audit that led to a generational transfer of the company, the new generation of Seghesios started implementing new company governance, President and CEO Peter Seghesio said at the Business Journal Wine Industry Conference earlier this month.

Key to better governance for the Seghesios was the drafting of a family policy and directives document. Such documents are common with family businesses in other industries but are only starting to garner attention in the wine business, according to Deborah Steinthal of Scion Advisors in Napa.

Such documents can take 12 to 18 months to craft because of interpersonal issues that need to be addressed, she noted. A common objection to such a document is the fear of a loss of a family atmosphere in the company, yet it can actually improve relations.

“It depersonalizes issues that could be confrontational,” she said of a family business constitution. “Treat your family like family and your business like a business.”

Common elements of family policy documents are statements of mission, values and beliefs, a code of conduct, a shareholder agreement and rules for how family members can be involved with the company.

The Seghesios went through board minutes over the years and compiled the hard-fought decisions. Among them was a requirement that family members coming to work for the business must have worked for an outside company for at least four years and have been promoted.

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The fruit of Dick and Alis Arrowood’s private winemaking venture, Amapola Creek Vineyards & Winery, is now evident with the first release – 800 cases of 2005 cabernet sauvignon and zinfandel retailing for $55 a bottle. Mr. Arrowood, 62, still holds the title of winemaster at Arrowood Vineyards & Winery in Glen Ellen. Vintner Jess Jackson acquired that winery along with Freemark Abbey and Byron in a bankruptcy sale.

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Wine People

Heidi Barrett, the winemaker who took the Screaming Eagle brand to cult status, has brought her perfect-score-winning touch to Fantesca Estate & Winery in St. Helena. She left Screaming Eagle just after it was sold to Charles Banks III and Stanley Kroenke in 2006.

For 20 years of her 26-year winemaking career, Ms. Barrett has been a consultant winemaker helping to launch or propel a number of North Coast notables, such as Dalle Valle; Vineyard 29; her own brand, La Sirena; and the label for A-list viticulturist Jim Barbour, who oversees Fantesca’s vines.

The nearly one-year-old Lake County Winery Association has its first executive director, Susan Mesick, and is planning ways to connect local wineries with local restaurants and resorts. She has been in food and agriculture public relations for 25 years with Ketchum and Fleishman-Hillard agencies in San Francisco, specializing in work with commodities boards for California strawberries and prunes, New Zealand kiwis and U.S. potatoes.

The group also is putting together promotional ideas such as bringing in notable Bay Area concierges on float planes to sell them on the wining and dining opportunities in the county and setting up water taxis on the lake to ferry visitors between shoreline tasting rooms.

Mendocino County Winegrape and Wine Commission is set to find a replacement for John Enquist by May, according to chairman Ed Berry Jr. Mr. Enquist was with the county winegrape association as executive director for eight years and then became the commission’s first president when local growers and vintners approved the formation last year. Mr. Berry said that about 60 applicants from both inside the county and outside vied for the job.

Sonoma-based Don Sebastiani & Sons International Wine Negociants is rearranging its salesforce as the company expands. Principal Donny Sebastiani moved from director of marketing to chief marketing officer and head of sales for the Three Loose Screws division, which has the mass-market brands Smoking Loon and Pepperwood Grove. Eric Rabinoff, senior vice president of sales and national sales manager for the division, reports to him.

Lou Barbero, San Francisco market manager for the Three Loose Screws division, is moving to Seattle as northwest area manager. He replaces Matt Scarlet, who is now in charge of the Midwest for Don & Sons’ The Other Guys division of wine shop and restaurant brands. Bryan Snyder now manages Three Loose Screws sales in Washington and Oregon and reports to Mr. Barbero. Don & Sons is consolidating sales for The Other Guys under National Sales Manager Jean Arnold. Steve Bei, manager of California broker sales, now is West Coast market developer.

Bacchus Capital Management LLC, a year-old San Francisco firm specializing in wine-related mezzanine and private-equity investments, brought on Mike Jaeger as president and COO. Mr. Jaeger previously was president for Vincor USA before Vincor was acquired by Constellation Brands. He served as president of divisions of Constellation before Vincor and after the acquisition.

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Submit items for this column to Jeff Quackenbush at jquackenbush@busjrnl.com, 707-579-2900 ext. 206 or fax 707-579-8475.