Issue link: http://read.dmtmag.com/i/111102
he 2011 sale of the 100-year-old Seghesio Family Vineyards brand to Erle Martin's Crimson Wine Group caught many by surprise. But the Seghesio family, now in its fifth generation in Sonoma County, had a variety of reasons for making the move, which has let some family members cash out, permitted others to move on to other projects, and allowed others to stay involved with the prestigious winery. Former Seghesio CEO Pete Seghesio spoke with Vineyard & Winery Management (V&WM) about why he and his family decided to sell, his ongoing role with the brand, and his family's plans for the future. [V&WM] After 100 years in the wine business, what was it that convinced your family that it was time to sell? Pete Seghesio [ PS ] There was a portion of the family that wanted out. It's a very capital-intensive business that's worth a lot of money, and the accountants tell you, "Pete, you've got nowhere to go but down from a valuation standpoint." It's pretty tough to buy out family at full price, family that wants to get out. For close to a decade I looked at whether we could split off a portion, sell off a portion, could we take on additional debt? As I look at it, it's a bit of a pruning-back period, so that we've got portions of the family that now have their own ranch where before everything was intermingled. I have the San Lorenzo vineyard (in Alexander Valley). Ted (Seghesio) and his dad and his five siblings have the Cortina property in Dry Creek Valley. My sister has another ranch, and so we'll see where it goes over the next few years. We've pruned off some of the older wood, and we'll see where the new shoots go. I had some family members whose health was not that good, and this allows them to take care of themselves. [ V&WM ] What's your role at Seghesio, and how much of a role do you want to continue to play in the company? Seghesio knew Erle Martin (left) for many years before Martin bought the winery. [PS] I've known Erle Martin, the CEO of Crimson, for probably eight or nine years. We were friends before this, and I am in the process of transitioning myself out of a job. It's a slow transition – basically a three-year transition – but that's the goal that Erle and I worked out together. At the end of next year, I'm going to be strictly a brand ambassador. I'll do a couple of days a month, if there's an important tasting or an important event at the winery or something like that; I'll be the storyteller, the historian representing the family history. [ V&WM] How is the transition of ownership going? [ PS] The first year of the transition was teaching Erle all the different parts of what I did with the company, whether it was how we managed the wine club, how we structured the club, how we did our sales allocations, how we did our production allocations, our directto-consumer and wholesale, how we had our grape team and structure set up. We brought on my cousin, Ned Neumiller, who is a fifth-generation Seghesio. Ned came on in May 2012 and has learned the Seghesio way, and now in the winter months, he'll see the pruning sessions. Erle's company has learned most of the other parts, and has split those among his team and among the Seghesio team. The great thing is that pretty much all of our (Seghesio) team, except the sales team, was retained or had an opportunity to stay, and a lot of them have had an opportunity to move up or take on more responsibility that I used to have. [V&WM] Of your family, who is staying on to steward the brand? [ PS ] I'll stay on as an ambassador, you've got Ted, who is the winemaker, Dave Seghesio, who does operations and mechanics, Ned Neumiller is grower relations and grapes, and Jim Neumiller, who farms the estate. So you've got five or six family members actively involved. SEGHESIO w w w. v w m media.com M a r - A p r 2 0 13 | V I N E YA R D & W I N E RY M A N A G E M E N T 105