Napa Valley vintner returns $1.2M coronavirus relief loan, recoups lost revenue via telephone sales

Napa Valley vintner Dario Sattui said he is returning a $1.2 million approved under a new, hot-in-demand federal program to help small-scale businesses make payroll while their operations are curtailed under public health orders intended to slow the coronavirus pandemic.

Sattui had secured a loan through the Small Business Administration's Payroll Protection Program to cover several months of pay for 135 full- and part-time workers at his Castello di Amorosa winery, aka The Castle, on the western slopes of the valley just south of Calistoga. The program launched April 3 as part of $2.2 trillion federal CARES Act but ran out of the initial $349 billion first allocated by mid-month. That's when Sattui said he had misgivings then decided to give back the money.

“All I want to do is the right thing,” Sattui said. “I could have used the money, but there are small wineries and restaurants that need it more. We'll survive, because we … have always been cautious to not have a lot of debt.”

The payroll loan program offers forgivable loans under certain conditions for up to $10 million to cover wages as well as other operational costs such as mortgage, rent and utility payments.The loan pool was replenished with $310 billion in a follow-up Congressional relief package signed April 24. But that's not expected to last long, given applications already in the pipeline for those funds.

Recipients of these loans have come under increased scrutiny, after reports surfaced that publicly funded concerns and large companies received loans. New York-based Shake Shack, Irvine-based Kura Sushi and Boston-area Wave Life Sciences USA are among the recipients that said they will give back their loans, according to the Associated Press, which uncovered their loans and dozens of others in regulatory filings.


Like other California wineries with vineyards, The Castle and V. Sattui Winery in St. Helena have been allowed under state and local shelter-at-home to continue viticultural and production operations, while public-facing functions such as the tasting rooms and hospitality facilities for weddings have been closed since March 15.

Opened in 1976 and named after Dario Sattui's great-grandfather, V. Sattui employs over 150 full- and part-timers, many of the latter working during two to five days a week, particularly on the busiest days at the properties: Saturday, Sunday then Friday. A $40 million building project over a decade, The Castle opened in 2007.


V. Sattui also applied for a payroll loan but wasn't approved, according to General Manager Tom Davies. “When the pandemic was announced, we were so scared of what the future would hold, then wine business groups said that this is a way we could get hold of money,” he said.

The wineries spent more than $100,000 each to help compensate workers based on hours worked in early April, until their unemployment payments arrive, Sattui said.

“We tried to keep as many staff on as we could,” he said. Projects that had not been a priority were undertaken, such as applying new stain to windows and doors, and refinishing the tasting room bar.

Each Sattui business attracts a few hundred thousand visitors annually, with a bit more going to the deli and wedding grounds at the longer-established St. Helena winery, Dario Sattui said. And all the wine produced is sold directly to consumers, mostly through the tasting rooms but also through the clubs, online and increasingly by phone.


Trouble is, visitor traffic to Wine Country tasting rooms started falling off precipitously in mid-February, a month before the shelter orders called for tasting rooms to close or go to only curbside pickup.

“We are really dependent on people coming through the front doors,” Davies said. “We host weddings, private events and special tastings, and that has come to a complete stop.”

The weeks of March 21 through April 25 have seen a dramatic direct-to-consumer channel shift from tasting rooms to online sales, including a slight increase in net sales by e-commerce and at the facility, according to a new report from Commerce7, a British Columbia-based firm that claims 273 global winery users, mostly from California. In looking at vintners that have been using the system since Jan. 1, the dollar volume of tasting room sales on the platform has been at the level of e-commerce before the pandemic, but online sales have climbed higher.

But share of sales via the wineries' clubs remains around one-quarter, after a spike of a few percentage points for the weeks of March 21 and 28, according to Commerce7. That's the “pantry stuffing” period just after the shelter orders that also caused a spike in beverage alcohol sales from grocery and other stores, per Nielsen.

But club cancellations have been outpacing sign-ups for new members in seven of the nine weeks since late February, a trend Commerce7 attributes partly to the closure of tasting rooms, a primary place where vintners sell memberships.


But one thing learned from the 2007-2008 recession is that when the phones stop ringing for orders, it's time to pick up the phone and start dialing, Davies said. From zero sales via outbound hospitality calls, also called telesales or outbound marketing, the share of sales for the Sattui wine business sold over the phone has grown to 28%, he said.

“I was reluctant at first because I don't like getting calls at home, but I learned quickly that people like talking about wine,” Davies said. “Wine is a relationship business.”

With the pandemic, the 13 people in the outbound sales team are now mostly dialing from home.

“It has been a savior for us,” Davies said. “We're not back to where we were before the pandemic, but we're selling a lot of wine.”

Dario Sattui is prepared for 2020 to be a “horrible year” for his wine businesses, but he learned to prepare for the worst after major hits from disasters in the past several years. First, there was the 2014 Napa major quake that sent images of downtown devastation to travelers around the world. Then came the massive wildfires that at times shrouded Napa Valley in thick smoke, even from as far as Paradise.

“If we've survived all that, we can survive this,” Sattui said.

Napa Valley Register first reported Sattui's plan to give back the loan.

Jeff Quackenbush covers wine, construction and real estate. Contact him at or 707-521-4256.

Show Comment

Our Network

The Press Democrat
Sonoma Index-Tribune
Petaluma Argus Courier
North Bay Business Journal
Sonoma Magazine
Bite Club Eats
La Prensa Sonoma
Sonoma County Gazette