By Laurie Wachter
As a third-generation descendant of an iconic Napa Valley wine family and the owner of the oldest winery in Napa Valley, Peter Mondavi, Jr. understands the difficulty of keeping a family-owned winery in family hands. He guides C Mondavi & Family—in partnership with his brother Marc—with a strategic, long-term eye. His goal is to lay a path for future generations of Mondavis to lead in their turn.
“We are one of the only family-owned wineries to remain so in the post-Prohibition,” says Peter. “My grandparents bought the winery in 1942. Many wineries founded in the late 60s or 70s are no longer in the original family. So, we standout for our longevity.”
Leading with the future in mind
“His family is iconic,” says Justin Faggioli, who sits on the C Mondavi & Family Board of Directors. “Peter has been able to establish himself as a leader within the wine industry with the name Mondavi, but not because of the name Mondavi. He’s a thoughtful person – both an intellectual thinker and a graphical thinker – who carefully examines the issues.”
Although Peter’s uncle, Robert, was better known, it was his father, Peter Sr., who focused on keeping Charles Krug and the Mondavi name in the family. In Peter Jr. and Marc’s business model, they sit on the Board of Directors, which includes outside members. The board then oversees the executive leadership team managing the family enterprises.
“My dad and especially Uncle Robert were more vocal in taking a direction. They would constantly talk about it, support it, promote it. When you have an executive leadership team, as we do now, it’s a delicate balance. If you take a more prominent, active role, they’re no longer the leaders. We don’t want that, as we have a great team assembled. I like to set the direction and guide their actions and decisions in that direction. The board and the actions of board members should illuminate the long-term goal or aspiration for the company and, in our case, the next generation.”
Hank (Henry) Salvo, who is also on the board, agrees, “Peter is always looking at the bigger picture. All his questions relate to how to improve the legacy of the family and the C Mondavi brand.”
Building the Mondavi Legacy
The Mondavi name is arguably the most recognizable in the Napa Valley. Peter Jr.’s Italian immigrant grandparents, Cesare and Rosa Mondavi, helped rebuild the wine industry after Prohibition ended. Cesare, who had been selling bulk grapes in Lodi, became a partner in the Sunny St. Helena (now Merryvalle) winery in Napa Valley. The industry had suffered from more than a decade of neglect, and the Great Depression was in full force. Cesare and his sons Peter and Robert ultimately built a wine business that became a Napa Valley legend. Buying the run-down 150-acre Charles Krug winery in 1942 was an early, pivotal decision in their rise. The renowned winery, founded in 1861, started the wine industry in Napa Valley.
Peter Jr. and Marc took the reins from their father in the 1990s, though he remained involved until his death in 2016. They immediately set to updating the Charles Krug wine portfolio to realign with the tastes and expectations of wine consumers.
“The Mondavi Family includes two primary brands, CK Mondavi and Charles Krug,” says Justin. “Peter and his brother Marc have together helped focus the spotlight on the Charles Krug brand. In the 70s, it was one of the premier brands, and now it is regaining its status as such.”
“The founding luxury portfolio in the 90s was a legacy portfolio,” explains Peter, “with many varietals that were popular in the 60s and 70s. With new players coming into the Valley, it was easy to see it was becoming Bordeaux West – Cabernet Sauvignon, Sauvignon Blanc, Merlot. We eliminated the tertiary varietals to focus on the Bordeaux.”
That strategic move meant replanting most of their vineyards in Bordeaux grape varietals. To ensure consistent quality, Peter installed a state-of-the-art temperature control system at the winery. He also led a $9.5 million restoration of the two historic landmark buildings built by Charles Krug, which still house the Charles Krug Winery he heads. His brother Marc oversees the CK Mondavi portfolio, which focuses on affordable wines.
Growing the Consumer Base
Peter followed his father to Stanford and studied Engineering. Back in the family business, he put his degree to work by taking over an expansion his father had begun. Then Peter found his sweet spot in sales and marketing.
“I focused on sales and marketing because it impacts the long term,” he says. “In the 1980s, it was a relatively closed industry in Napa. We didn’t have the internet then, so I was feeling a bit isolated. I needed to broaden my views, and the idea of Business school popped up.” He returned to Stanford to earn his MBA.
“Business school gives you a full rounding,” he says. “I concentrated on the elective classes and the strategy side of things. That informs my passion today and helps me be an advocate for the next generation.”
“I put direct-to-consumer (DTC) and the wholesale system on equal pedestals for our winery model. I see them as synergistic. With technology today, we can get closer to the customer. We introduce more people to our wines and cement the relationship with our customers through DTC. And we can offer wines that are not available in the 3-tier system.”
As Hank says, “One important factor of the wine business is that what you sell at the winery is much more profitable than through a wholesaler. You want to sell at least 30% of your business through the back door. To do that, you have to give people a reason to come up to St Helena – to keep going up the valley.”
To draw people up the valley, Peter has developed Charles Krug as a cultural hub. Partnering with the Napa Valley Film Festival, Charles Krug sponsors the event and hosts screenings, special tastings, and culinary events. He has also encouraged other events at the property, including tastings on the lawn, a comedy series, and a rotating speaker series. They offer six kinds of pizza and sell house olive oil and four types of salumi crafted by Pete Seghesio using their wines.
“I love cooking,” says Peter, “I grew up in a foodie family that revolved around the Italian culture. Dinner meant homemade pasta and farm-to-table – before it was a movement. That has a direct impact on our wines, which we craft to be on the table and complement the food.”
Preparing for Future Generations
Peter is now focusing the work of three Mondavi generations on paving the way for the next generation. He and Marc have six children between them – Marc and Janice’s four girls and Peter and Katie’s daughter and son. Only one is on their payroll right now and Peter is OK with that. It makes sense to him that the fourth generation should experience working for someone else and perfect their marketable skills before joining the family business.
“My Dad instilled in me that you have to have a passion for the business,” says Peter. “You also have to come in with the mindset that this is a family business, and strategic decisions should be made with the intent of keeping it in the family.”
Peter has that passion. As Hank says, “This is his life. His name is on the bottle, and he takes it very personally.” In Peter’s case, his passion is not only for the winery but also for preserving the family legacy of stewarding the oldest winery in Napa Valley for future generations.