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North Bay Business Journal

Tuesday, April 12, 2011, 2:05 pm

Foley ‘major’ stake key to $3 million new round for Crushpad

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    Foley Family WinesSONOMA –  Bill Foley has added to his growing portfolio of wine companies with what’s being described as a “major investment” in Crushpad, a custom winery for thousands of hobbyists and small-scale labels that moved to Napa Valley a year ago and now is bound for another of Mr. Foley’s holdings, Sebastiani Vineyards in Sonoma.

    Mr. Foley is taking a minority stake in Crushpad, but his is the largest contribution to what is expected to be a $3 million round of funding, according to Mark Marinozzi, vice president of marketing for Crushpad.

    “Foley is a piece of the investment pie,” he said. “A lot of previous investors re-invested, and a number of clients are private investors.”

    Crushpad logoAmong those previous investors are members of the board of directors, which includes Peter Engel, a top West Coast investment banker with JPMorgan Chase and owner of a small Sonoma County vineyard, Jean-Charles Boisset, president of St. Helena-based Boisset Family Estates, and Gap Inc. founder Bill Fisher, who started Manzanita Capital.

    Crushpad has received more than $15 million in funding since it began, according to a spokesman.

    By the end of this month, Crushpad plans to relocate to a starting production space of 5,000 square feet in the Sebastiani winery at 389 Fourth St. E., located a few blocks from Sonoma Plaza. Crushpad has been operating out of Silverado Trail Wine Studios northeast of Napa since March of last year.

    “This move to Sebastiani will allow us to further refine our winemaking processes to produce even more phenomenal wines, while giving our clients the opportunity to showcase their brands to tens of thousands of Sonoma tourists at our new tasting bar, opening later this year,” said Michael Brill, Crushpad founder and chief executive officer.

    The tasting bar will serve the company’s more than 100 clients in the Crushpad Commerce program and include features such as touchscreen informational kiosks and automated wine blending and dispensing stations for tasting. The new facility will allow more collaboration between client vintners and employ web-based collaborative winemaking technologies, according to the company.

    “We will have a more traditional tasting room experience and a mashup of education and Exploratorium in the wine country,” Mr. Marinozzi said. “We’ll have our own tasting room staff but honor and respect the hospitality Sebastiani has had for years.”

    One motivation for the move was providing a more exclusive hospitality setting for Crushpad Commerce partners and fans than could be accommodated at the Silverado Trail facility, particularly with growing production of William Hill and Richard Wollack’s Tetra brand there, according to Mr. Marinozzi.

    The online system for tracking development of client wines — called Crushnet — will be blended into the main company website in coming weeks. Clients can see data collected from their barrels and request samples be sent to them for tasting parties or to their friends for remote collaboration.

    The move from San Francisco’s South of Market to wine country has come in stages. In February 2009, Crushpad and custom winery Bin to Bottle in south Napa entered a winemaking services agreement intended to provide larger production options for Crushpad Commerce clients. A year later, Crushpad announced it was moving to leased space at Premier Pacific Vineyards’ Silverado Trail Wine Studios. Then last summer, an order-fulfillment deal was reached with Napa-based IBG.

    Crushpad will continue to offer its clients the option of using Bin to Bottle for expanding production, with Crushpad’s winemaking team making visits to the Napa facility to guide projects, according to Mr. Marinozzi.

    “We have that option for clients who feel a strong need to maintain ‘vinted and bottled in Napa’ on the back label,” he said.

    Conversely, Crushpad will continue to work with Bin to Bottle’s clients that have a smaller-scale project or are reducing production.

    Commercial clients still represent just more than half of Crushpad’s revenue, down from around 70 percent in early 2009 largely because of the tough selling environment for fine wines.

    IBG’s large American Canyon fulfillment facility will continue to fulfill orders, he said.

    Crushpad customers have created more than 5,000 wines since its founding in 2004 in San Francisco. The company expanded winemaking to the Bordeaux region of France in 2009.

    Mr. Foley acquired Sebastiani Vineyards from the namesake family around the beginning of 2009 and put it into a new wine company called Foley Family Wines. Starting in 1996, his portfolio now includes more than a dozen California, Washington and New Zealand wine brands, including Chalk Hill acquired last August, a vodka brand and two hotels, such as Le Mars in Healdsburg. Foley Family Wines relocated from Sebastiani to Chalk Hill Winery near Healdsburg after the acquisition.


    UPDATE, April 20, 2011: Crushpad has received more than $15 million in funding since it began, according to a spokesman.

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