[caption id="attachment_78856" align="alignright" width="200"] Peter Mondavi[/caption]
ST. HELENA -- Peter Mondavi, 98, and his sons Peter Jr. and Marc operate C. Mondavi & Family, producers of the luxury-tier Charles Krug brand at Napa Valley's oldest winery as well as the mass-market CK Mondavi brand.
Peter Mondavi Jr. is set to be a panelist at the Business Journal's Impact Napa: Wine conference Thursday in Napa.
Production of Charles Krug annually is about 75,000 cases of wines, including the Generations blend and the flagship cabernet sauvignon, from just more than 500 acres of Napa Valley vines. The brand has scaled down over the years as some smaller-production varietals were pared from the portfolio.
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About 1.6 million cases of CK Mondavi are made annually, and a key source for that is about 900 vine acres in the Dunnigan winegrowing region of Yolo County.
The company has about 120 full-time employees, including a national sales force.
Peter Mondavi Jr. spoke with the Business Journal about the prospects for the wine business from the perspective of a producer of popular-premium and luxury-class wines, business growth in Napa Valley through revenue rather than production and preparing the business for the fourth generation.What’s the outlook for the wine business?
We bring a lot of history and experience, with the family being here since 1943. We've seen all the ups and downs.
I focus on high-end brands, and Marc focuses on CK. We’re extremely diligent to separate production from those two markets and usually don't talk about them together.
For the Charles Krug and Napa Valley wines in general, it suffered noticeably in the recession, but it has recovered quite nicely. From a national standpoint, I see the demand for luxury brands to continue, but the sourcing is somewhat restricted. Napa County has about 45,000 acres planted latest figure, and there's not a lot more to be developed -- might be a few thousand acres here and there. I do see demand for Napa Valley luxury brands continuing and supply on a long-term basis being constrained.
For the industry, we are starting to see consolidations of luxury and high-end brands in California and coastal properties and even up to Oregon and Washington. Companies are expanding their portfolios of high-end and luxury brands by purchasing outside Napa Valley.
For CK Mondavi and brands that are larger, it competes clearly against international spectrum with Australia, Italy, France and Spain. It will continue to be competitive.
The big concern there is the distribution system, and consolidation of that system is the biggest bottleneck. A fair number of producers around world are being constrained in their sales. That has to be marketed and sold and we take full responsibility to maintain relevance in marketplace and distribution system.
Recent reports have the demand side continuing to grow as well. More people are slowly migrating to wine as the alcoholic beverage of choice. Supply is not forecast to keep up with demand. We have to have tactical efforts to get through the distribution system.What’s top of mind for your business?