‘The Prisoner’ wine creator talks about his restless pursuit to craft the next cult libation

CEO Spotlight

In this monthly series, the Business Journal talks with who occupy the lofty spot in a local organization, asking about their professional and personal opportunities and challenges.

Dave Phinney needs to consciously tell himself to slow down.

Phinney, 49, is the mastermind behind the cult wine The Prisoner, which was sold to Constellation Brands in 2016 for $285 million. He sold the Orin Swift Cellars brand to E. & J. Gallo Winery the same year for $300 million then sold the Locations brand to Gallo two years later for an undisclosed sum.

But his latest endeavor being the Savage & Cooke distillery located on the former Mare Island Naval base in Solano County’s largest city, Vallejo.

Part of his never-ending quest for the next exciting project could be because he describes himself as being undiagnosed with attention-deficit/hyperactivity disorder (ADHD).

He bought a 1959 GMC truck in the spring to restore it. “There was no real reason to do it other than it sounds like fun,” Phinney told the Business Journal.

One of his escapes is going with his family to their lake home in northeast Vermont. He calls it “one of my happy places.” Cell service doesn’t exist there. Still, it’s hard to turn off his creative juices.

“Two days after I get rest and a good night’s sleep I’m already thinking of new projects,” Phinney said.

While he likes to have fun at work and in his spare time, Phinney is contemplating how to help others, to leave a legacy beyond adult beverages. He’s a big believer in the Montessori education philosophy and hopes to bring it to more people in the Napa Valley where he lives.

The following is an interview with Phinney that has been edited for space and clarity.

How did you come up with The Prisoner, which is a blend of zinfandel, cabernet sauvignon, syrah, petite sirah, and charbono?

It was a happy accident in 2000, which was a very challenging vintage. I had a lot of small lots of wines that I didn't want to bottle separately so I just threw them all together and that's how we made The Prisoner.

Having created a cult following with The Prisoner, do you hope to do the same with one of your spirits being made at Savage and Cooke distillery?

Absolutely. I think it's already starting with The Burning Chair (bourbon) and, well, all three of them because they're very similar. It’s kind of hard to re-create The Prisoner.

It still amazes me the success it has after 20-something years, so that may be a little bit of a tall order. You can't plan that. If you're trying to plan to be cool, you're not going to be cool, you're going to lose.

If you're planning on coming up with a cult line that's going to have an emotional effect on people and you're trying to go through the playlist, there's no playlist. You have to listen to the customer, see what people like, and be really thoughtful about it.

Even though you sold Orin Swift Cellars to Gallo in 2016 for $300 million, you are still very much involved in its operations. What are your responsibilities, and why do you continue to be part of the company?

The sale was much more like a partnership, and it's been amazing. It's allowed me not to worry about a lot of the sales and the day-to-day, banking, and lines of credit.

I get to do the fun stuff and be out in vineyards, strategize on labels, come up with new ideas. It's been almost a second act.

I'm curious about the business side of the wine business, but that's not what gets me excited. What Gallo has done is let me go back to the fun things.

How are the wine and distilled spirits industries alike, as well as different?

They're alike because we're selling alcohol, and it requires a three-tier system. (After Prohibition, beverage alcohol distribution between the states largely required three independent players: producer, wholesaler and retailer. That has been changing since a 2005 U.S. Supreme Court ruling that paved the way for interstate direct-to-consumer sales, if allowed by state law.)

You’d think after all these years, I wouldn't still be surprised, and that's not exactly the right word, but you can make an amazing vodka in a week, less than a week. The idea of not having to wait for harvest to have product and need more; we can just make more. That still blows my mind.

Savage & Cooke operates out of three buildings on Mare Island, which was the first naval shipyard on the West Coast. How does that history play into your business model?

We try to be really respectful of a friend of mine, Kent Fortner, who has Mare Island Brewing Company. He really plays into the history of Mare Island and the island itself. Other than Savage and Cooke being named after some former Navy men that worked in the yard, we really try to be respectful of Kent because that's kind of his story. He got there first, and he's really leaned into that.

What was the hardest lesson you learned early in your career, which you now recognize as an important one?

There are some that I continue to see, which is I don't want to say not everybody's as honest as I am, but I'm a little too trusting.

I won't change that because I don't choose to live my life that way. What I've learned is to trust, but confirm. There's a lot of people that care more about the money and think it's a game, and to me it's not a game.

Yes, it's a game in the sense that it's competitive and it's fun, but you can compete and not lie, cheat, steal, and (expletive) people over. If that's what you have to do to make money, then I don't want to work with you. I don't care how much money I can make. I'm not going to do that.

What would you redo in your career if you could and why?

It's not that I would redo anything, but it's something that I struggle with to this day. I don't want to say when enough is enough. I have days when I realize: slow down, enjoy it.

We've been fortunate to have some successes, but I think my memory's very short and I instantly want to do a new project or something new. I think as I'm getting older I'm realizing that at a certain point I should just enjoy it and relax.

What was your first job and what was your first career job?

My first job was tying Christmas trees for tips on to people's cars. My first career job was working for Robert Mondavi winery as a temporary harvest worker; bottom of the barrel.

When you were a child, teenager, even college is this the job you thought you would have one day? If not, what were your earlier career aspirations?

Once I knew this was going to be my job, there was no question. But most of my young adult/teen years I thought I was going to be involved in law and politics, and after working in both those sectors I couldn't run fast enough and far enough away.

I never want this to come off the wrong way, but I kind of knew this was going to happen, whatever this is.

I never worried about success or money or anything. It's not that I’m blessed. I mean, I am blessed, but it's not like I waved a magic wand. The harder I work, the more I practice, the luckier I get.

I always knew that if I put my head down on whatever I decided, and that's what my parents told me, once you figure out what you're going to do, the money will come.

I knew if I was willing to put in the work and I really truly loved what I was doing, that I was going to be successful, for lack of a better word.

My first goal was to work a harvest. That, to me, was success. Then it was, someday, maybe I'll be a winemaker, someday maybe I'll have my own brand. Now it all happened very quickly because I was twenty-something-years-old and an idiot.

I was thinking about it this morning in a non-business way. We've always been extremely involved in different charities and, and trying to have some I don't want to say legacy, but I think it's time to start thinking about that and trying to leave a more important mark on more than just the business world.

What concerns do you have looking out five years?

I don't really think that way. I don't really have any concerns. My mind doesn't really work that way, and it’s probably that I'm just not smart enough. I'm not a big strategic, analyze this and go do that.

One concern I do have is that it's getting harder and harder for people in the wine business to do what I did because the price of entry is so high now.

And the availability of distribution isn’t there. I'm concerned that there won’t be this continuing wave of young men and women forging their own paths anymore because it's pretty daunting and it's impossible to get distribution.

What is your approach to making tough and important business decisions?

I would say that most important is that we actually make a decision. We don't overanalyze things.

We don't have paralysis through analysis for big decisions. It sounds kind of trite, but I like to sleep on things — not for a week though.

I'll take a day if it's enough of a decision that I even need to sleep on it. What we try to do is make a decision, own the decision, and then, right or wrong, deal with it. I see a lot of people that get hung up on every little eventuality and then miss an opportunity or end up making the wrong decision because they're just so in their own head.

What qualities in other executives do you try to emulate?

Company culture.

Having a good company culture is probably the most important thing because if you surround yourself with really good people, you let them do their job, you treat them right, and you pay them well, then things just seem to work out.

Even if the product fails, it's not because everybody didn't try their hardest. We got audited by the state Tax Franchise Board because our unemployment rate was so low. They thought we were lying.

How have your mentors impacted your career?

I haven't had that many mentors, so that's a tough question.

But I read a lot and I listen to a lot of podcasts. I would say whether they're actual mentors or people I've read about I think that the commonality is being honest, being true to yourself and being very loyal to your customers and it's not specifically to any one business.

Where I've seen people be successful in not just business, in life, there's usually a lot of self-deference, deprecation, honesty and caring. Those aren't usually words that get thrown around as it relates to business.

Right now, I'm deep into the history of Tesla and Elon Musk and, love him or hate him, the guy was relentless, used his own money, had a vision, and saw it through. I think when you look at a lot of highly successful people, entrepreneurial people, they're true to themselves and they're sort of relentless.

What is your opinion about the future of the national economy and how will that affect your businesses?

I think the biggest effect is that inflation is real and for a period of time there's also supply chain issues. I think good labor is getting harder and harder to get. I see an entire generation of extremely entitled, specifically white people, mainly male that don't want to do the work, but they want my job and the money.

I don't care if you went to Harvard or wherever. It used to be you got a trophy when you won and everybody else cried. That's good. I remember losing and crying, not getting a participation award. You lost and it should suck, so try to win.

What are the benefits and drawbacks to being located in the North Bay and doing business here?

The benefit is obviously it’s beautiful and there's a lot of very talented people in general. I would say the drawback is everything's more expensive.

If you could change one government regulation anywhere, what would it be and why?

Specifically, to wine and spirits, it would be to get rid of all these archaic post-Prohibition laws and get one set of rules across the country.

Having to deal with individual states some of the laws don't make any sense. They were written years and years ago and it would be so much simpler to have one set of rules, within reason, for every state. I'm not talking about taxes, I get that. There are so many different laws in every state, like in Texas, it's a four-tier system and every state's different, there's certain states you can't ship to, sort of business interruption regulations that aren't benefiting anybody.

The consumer wants the wine; they can't get it. We want to sell them wine. It makes it really clunky and there's no benefit to them.

What are you doing to attract employees? How has recruitment changed since the start of the pandemic?

Most of our recruitment and employees come from word of mouth and friends. We don’t use recruiters. I think our average employee is between 10 or 12 years, through that network of all these people, someone usually knows somebody.

Are wages the answer to recruiting great talent. Why or why not?

It shouldn’t even be in the conversation. It just needs to be fair and right. It's so individualized. It must be right for both parties.

I learned from an old grape grower if it's not a good deal for both sides, it's just not a good deal.

The numbers just have to work, but I've never had to entice anybody with money. We just pay people. I think what we do that is more of an enticement is: I don't care if you work one hour a day or 100 hours a day, and I don't want to know what you're doing, as long as it's getting done.

I've routinely forced people to take time off because I'm like you're working too much. There’s a lot of non-monetary benefits that I think people overlook. You don't have to tell me you're going to the doctor, life happens.

If you need to take a couple days to get your head straight, if the works getting done, I don't need to know about it.

You're still going to get paid. Ninety-nine percent of the time I never worry that anybody I employ isn't working eight hours a day. I worry that they're probably working more than they should be.

What advice would you give someone just starting his or her career in your industry?

Work as many harvests as you can. Work a harvest in the Northern Hemisphere, then go work a harvest in the Southern Hemisphere.

The only way, with wine specifically, is we only get one harvest a year, so if you can get two a year by doubling up, that means you're 50% smarter than the next guy or girl.

Start at the bottom, start by dragging hoses, learning how to drive a forklift, filling barrels, do that because those are skills. I tell my kids: learn to make something with your hands because at the end of the day, you'll have something that you can produce.

It starts in the vineyard and in the cellar and there's no alchemy, there's no silver bullet. Ask a ton of questions and get your hands dirty.

Would you want your children to be part of your business ventures?

Only if they wanted to. I've seen a lot of second and third generation kids that feel forced or obligated.

They want to go be a schoolteacher or a surfer, but they’re working at mom and dad's winery because it's a check and they feel obligated.

If my kids want to do it, I'll happily work with them. I'll probably try to find another friend in the business and tell them to go work for this other person first. Maybe not.

I'd give them a job if they wanted to just so I could hang out with them, but it's only if they truly want to and love it. You only get so many days on this earth and most of that's spent working, so go do what you like. I've made it pretty clear that other than the home that I inherited in Vermont from my parents, eventually, most of our physical assets are going to be put into some kind of a trust geared toward educational charities because first thing is, they didn't earn it, and I also don't want them to ruin their lives. I've seen more people's lives go the wrong way because they were given money or given things than I have the opposite.

Why don't you use email as a means to communicate with people?

I think that there's an entire generation that has a misconception that sending an email means you did your job, and it drives me crazy.

I was dealing with it this morning: So you sent them an email, OK. When? Yesterday. OK, did you call them? Did you text them? Did you drive to their house?

Emails are great for contracts and photos and stuff that you have to see. People equate email with work, and it's not.

People also say things in emails that they would never say to your face, and there's no nuance. Everything gets lost. I mean, I know people that are very successfully using email, it's not that. It's just, look, I'm outside right now, I don't sit in an office all day and look at computers. It’s not efficient for me.

Editor’s note: Phinney’s assistant asked him all of these questions that were emailed by the Business Journal, then transcribed the responses, and provided the publication with these written responses and the audio recording of their interview.

CEO Spotlight

In this monthly series, the Business Journal talks with who occupy the lofty spot in a local organization, asking about their professional and personal opportunities and challenges.

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