NG: The Next Generation in Wine smooths business transition
Winery owners often hold much of their wealth in the winery itself or in ownership of vineyards where they grow grapes for production. As they look toward retirement, winery owners may decide that their best long-term investment strategy is to pass the reins on to their offspring. If they build the winery's business, expanding production and sales, that next generation can inherit a steady flow of profits that sustain them indefinitely.
Respecting the family transition of winery assets, a group of heirs and eventual heirs of wineries formed a group dedicated to educating themselves on marketing, money management and investing, called NG: The Next Generation in Wine. Most of the 27 members are located in the Napa Valley, and most are under 40 years of age. The organization was founded in 2007.
Garrett Busch, proprietor and CEO of Trinitas Cellars in southern Napa County, became president of NG in May 2014. The group does both social and educational events, and recently hosted a series of seminars on succession planning — wealth transfer to the next generations — as well as on financial management.
To be a member of NG, the 'requirement is that you are a second or later generation working full time for a family's winery,' said Busch, who is from the second generation. 'You have a mix of people from their twenties through their fifties.'
'In 2002, my mom and dad founded Trinitas,' he said. His parents have little involvement in day-to-day operations. 'I do most everything now,' he said. The company has about 18 employees, including Busch's wife Betsy, CFO.
The winery produces about 20,000 cases a year, including 24 different varietals. 'We do a lot of really small case production projects,' he said. The most popular wines are chardonnay, a red wine blend, a meritage, as well as cabernet sauvignon and sauvignon blanc. Most of the grapes are purchased from various growers in Napa Valley. Trinitas wines range in price from about $25 a bottle to $135 for an amarone wine (Amarone della Valpolicella) bottled and produced in Italy using dried grapes. His father became enamored of the amarone wine in the 1990s, Busch said, and Trinitas makes 100 to 200 cases a year.
In Napa, the winery's high-end products are $75 single-vineyard cabernet sauvignon wines.
'Our goal for the NG organization as a whole is marketing' family wineries, particularly those that have been handed to the next generation, and those that have been kept within family management.
Since he started as president last year, he has brought in expert speakers. Members have varied roles in the wineries they represent, including upper management, winemakers and vineyard managers. 'Some family members are starting from the bottom,' working in tasting rooms, he said.
A recent meeting focused on accounting principles, led by accounting firm BDCo (Brotemarkle, Davis & Co.) in St. Helena.
'I've already been handed the top management role at the winery,' Busch said. Other members are going through transition to top management or are looking forward to that phase, 'trying to figure out those transitions,' he said. Some of the wineries have been around only a few years; others, in the family for decades.
'The number one thing when you are in a family business,' Busch said, 'is that the succession plan is not only not talked about, but is not really considered until it's too late in a lot of ways.'
His father is an attorney who does estate planning, so his situation was different, with advance preparation and ample clarity. 'He is always on the ball with the game plan,' Busch said.
Last year he brought in another expert to speak to the group about marketing, including how to market to each other.
When he first started in his role as CEO, there were roadblocks internally before employees discovered his leadership talent. 'But I have grown the company,' Busch said. 'We doubled our revenue and everything else.'
When he started, there were only nine employees — half the current number. 'A lot of the people here, I brought in,' he said. 'But the people here before me, it's all about gaining respect.'
'In society, there is a stereotype about the owner's son or owner's daughter,' he said. 'When you come in and prove what you are doing on your own merit, there's never an issue. Reasonable individuals see that and respect it. That's what I have experienced,' he said. 'Once you come in and do a good job, treat everyone with dignity and respect, you get the exact same in return.'
Lisa Augustine, co-founder and previous president of NG: The Next Generation of Wine, said the organization had other co-founders including: Holly Finkelstein of Judd's Hill Winery; Chris Hall of Long Meadow Ranch; Liz Marston of Marston Family Vineyards and Kristen Spelletich of Spelletich Family Wine Company.