CK Mondavi Finds Growth Opportunities Without Chasing Trends

The fourth generation of the Mondavi family, internally referred to as the G4, is stepping up to play a larger role in the family business. They each bring with them unique experiences from outside the family business including entrepreneurial ventures like the Mondavi sisters’ Dark Matter Wines. However, there’s no indication that this changing of the guard will usher in a revolution in the company’s business model or focus. In fact, CK Mondavi and Family is taking steps to sharpen focus on their core products, market, and competencies.

Mondavi G4

“Our grandfather died two years ago now, and a lot of times we’ve witnessed in our neighbors that when the patriarch passes away things shift, they sell or the culture of the company changes,” says Riana Mondavi, “But that’s one of the things we want to make sure people recognize; the Mondavi family is still here. Doing things like the label change and putting the fourth generation on the board of directors is our way of saying: We want this to keep moving forward.”

The G4 have roles as shareholders, board members, and brand ambassadors, but only Riana Mondavi works for the family business full time as Director of National Accounts, On Premise.

The family business did look at some of the hottest trends including rosés, canned and kegged wine, but concluded that it was not a good fit for them, and that they were better off narrowing their focus and playing to their strengths.

“As far as a dry rosé goes, I’d love one,” says Riana Mondavi, “but we’ve paired CK Mondavi down to varieties we’ve been doing for a really long time; we call it our core six, and our strategy comes down to doing those and doing them well. Because even at over one million cases, we still have a huge amount of opportunity out there.”

Pairing down to just six varieties meant cutting Moscato and White Zinfandel from the CK Mondavi lineup. “White Zinfandel was a trend we tried to follow, but it’s going away,” says Riana Mondavi, “and we weren’t the main players in that market, so we decided not to beat our heads against the wall in a market that’s not going anywhere right now.”

The strategic choice to focus on the core six also means that CK Mondavi isn’t about to venture into any of the new trending packaging spaces like canned or kegged wines. CK Mondavi bottles everything on their own onsite bottling line, which isn’t setup to handle cans or kegs, and Riana Mondavi explains that it would be a considerable expense to get the wine out to another canning or kegging facility. “We’ve had the discussion about kegs, but it’s kind of a wash when it comes to the margin aspect of it.” “I’m not saying there isn’t going to be something new from CK Mondavi in the next several years, that talk is always out there, and I think we’d be remiss if we didn’t at least open up that topic, but rather than continuing to add to it and throwing stuff against the wall to see what sticks, we’re taking advantage of some of this low hanging fruit that’s still out in the marketplace.”

While CK Mondavi is determined to stay true to their heritage and core products, they know they cannot stand still but must keep refining their product within the scope. Charlie Gilmore, who took over as head winemaker two years ago, has found the family run business very receptive to ideas for improvement. The 2017 release of CK Mondavi is the first vintage made fully under his direction, and one of the changes he made was to the Chardonnay; dialing back the amount of Muscat and adding Viognier to the blend.

“You want to make sure that the wines you make continue to go up in quality, and they continue to respect the heritage of those wines. So you try to make incremental improvements along the way,” says Gilmore. “It’s a small shift, taking a tiny bit of Muscat out and putting a little bit of Viognier in; a small percent of the blend can make a big difference in the end product. We don’t think the customer will see too much change between the vintages, but they might say ‘Oh, this one is a little bit better.’”

Priced at $6.99 the CK Mondavi wines fall into one of the toughest price segments, which according to Nielsen has been declining for years with a nearly 5% loss over the past twelve months. However, while the segment as a whole is suffering, CK Mondavi is capturing enough market share within the category to achieve stable growth.

“In this industry and definitely this price point there’s a lot of competition,” says Gilmore, “so we have to keep fighting to win, and it’s across the board from winemaking to sales, every one of us has to be hungry to keep the company going in the right direction, and we’re doing that.”

Last year CK Mondavi updated their brand label to a more modern look and added the word ‘family’ to the brand name now: CK Mondavi and Family. “We feel it means something to the consumer,” said Marc Mondavi, “we’re a family owned corporation, there are no outside shareholders.”

Riana Mondavi agrees with her father about the importance of emphasizing the brand’s strong family heritage on the bottle. “The fact that we can have Mondavi on the label is huge, people trust it, they recognize it, and it creates for an amazing consumer base just out of the gate. It’s our task to take the next step to promote it and show that we may be the old guys in town (we’ve been around for 75 years), but we’re still here, and we’re still doing great things.”

Not only does CK Mondavi have plans for continued growth, they also have confidence in their continued supply of California grapes. They own 1850 acres and only about half of it is planted, so when they need more grapes to grow the brand, they have the space to expand, and they also have strong multigenerational relationships with many California family grape growers.

“My dad’s funny, he tells the sales team, ‘keep selling, I’ll find the grapes!’” Riana Mondavi laughs, “but we’re lucky that my grandpa started these relationships a long time ago and my dad and uncle have maintained them. These amazing family grape growers that we continue to lean on are going to be a huge part of making sure the brand maintains its quality and continues to grow, which at this volume and price point we’re in is very difficult for some people.”

So while there’s been a lot of change at CK Mondavi and Family over the past two years; the loss of Peter Mondavi Sr., a new winemaker in Charlie Gilmore, an updated package, and now the entry of the fourth generation of Mondavis into the business, they remain committed to their heritage and core brand promise.

“We’re comfortable with what we’re doing, and we want to do it to the best of our ability,” says Riana Mondavi. “That’s one of the ways we’re going to maintain California only and 100% American, if you stretch yourself too thin, you lose sight of what you do best.”

By Kim Badenfort