Charles Krug Winery’s Peter Mondavi Sr. remembered as business leader

This story originally was published in The Press Democrat on Feb. 22, 2016.

Peter Mondavi Sr., who helped build up the American wine industry after Prohibition and whose family became synonymous with Wine Country amid tremendous growth and changes, died on Feb. 20 at his home in St. Helena. He was 101.

Mondavi was best known for his leadership of more than 50 years at Charles Krug Winery, which his parents, Cesare and Rosa, purchased for $75,000 in 1943 during an era when Napa Valley was known for producing cheap jug wine.

Along with his brother, Robert, Peter played instrumental roles in changing staid business practices and operations into the multibillion-dollar fine wine industry that today drives the North Coast economy.

“He definitely had a big footprint out there,” said Joe Ciatti, a partner at Zepponi and Co., a Healdsburg winery mergers-and-acquisition firm. “He always wanted to make good wines at good prices.”

While the gregarious Robert had the marketing expertise, the more modest Peter’s strength was on the operations side, pushing forth initiatives that revolutionized American winemaking. He was a key figure in developing the practice of cold fermentation of white and rosé wines, which has led to chardonnay becoming the most popular American varietal. Those wines previously had been fermented at high temperatures, which killed off their distinctive fruity taste.

With Peter’s backing, Charles Krug also became the first Napa Valley winery to import French oak barrels, which imparted subtle flavors into the wine that can soften the tannins or provide greater complexity.

The two, however, feuded over control and direction of the winery in the aftermath of their father’s death. In one notable incident, Robert smacked Peter twice in November 1965 during an argument over Robert’s purchase of a mink coat for then-wife Marjorie in anticipation of a state dinner invitation to the White House.

Their battle ultimately ended in up in court in a costly and nasty case that rocked Napa County. A judge in 1976 ruled that Peter, Rosa and the family partnership had acted improperly in cutting Robert out of the winery.

The judge ordered that Krug be sold and Robert be paid compensatory damages totaling $538,885 and a 20-percent share of Charles Krug. Rosa died a month before the verdict was read, with Peter then assuming the role of president and chief executive officer.

The two brothers, however, later entered into a settlement that allowed Peter to keep ownership of Charles Krug and provide compensation to Robert so that he was able to take over complete ownership of his Robert Mondavi Winery, which he founded in 1966.

Peter was born in 1914 in Virginia, Minn., the youngest of four children to Italian immigrant parents. His father, Cesare, later became a grape buyer to purchase California fruit for his winemaking neighbors. The family moved to Lodi in 1922. Peter went on to earn a degree in economics from Stanford University and served in World War II, returning stateside in 1946.

In a key move, Peter was able to lock up more than 800 acres in the Napa Valley during the late 1960s and early 1970s for the winery, which helped establish its estate wine programs. Ciatti noted that Peter was a frugal businessman and was cautious not to over-leverage loans with his bank.

“He was certainly a strong-minded businessman,” said Jon Fredrikson, a wine industry analyst. “He was a pretty tough guy.”

Unlike his brother, Peter did not look to be in the limelight. Peter noted that his proudest accomplishment in life was in holding family control over Charles Krug amid increasing consolidation in the industry.

“If I could, I would tell my father, I did the best I could during the difficult years. I was determined and we held on,” Peter said late in his life.

In contrast, Robert was unable to keep control of his winery that he operated with his two sons amid a spate of bad business choices. His winery was sold to Constellation Brands Inc. in 2004 for $1.3 billion in cash and debt.

The two later reconciled and in 2005 made wine together again for Auction Napa Valley from a lot - “Ancora Una Volta,” or “Once Again” - and raised $401,000 for charity.

Peter was able to grow the business that is now under the umbrella of C. Mondavi and Family, which also offers the lower-?priced CK Mondavi label. The company sold 1.7 million cases in 2015, making it the 13th largest wine company in the country, according to Wine Business Monthly. It has 1,400 planted acres in Napa County.

Peter’s sons, Marc Mondavi and Peter Mondavi Jr., now control C. Mondavi and Family.

Even up until his death, Peter remained active, including signing checks, and was board chairman until August. He was well-known for climbing two flights of stairs to his office, even in his advanced age.

He is survived by his two sons and a daughter, Siena, nine grandchildren and two great-grandchildren. His wife, Blanche, preceded him in death in 2010. Robert died in 2008.

A private service for family will be held at the St. Helena Catholic Church.