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Historic Charles Krug Winery, Becoming The New Kid on the Block

by John Intardonato
September 17, 2007

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Charles Krug Winery turned 146 this year, and its owners Peter Mondavi and sons, Marc and Pete Jr., have been quietly investing in its future to see that it does not look its age. After spending $21 million updating their vineyards, and another $7.5 million recreating a unique dual-winery, they are popping another $6 million to restore the classic architecture that Krug himself built. With 850 prime acres and its modern facility, Napa Valley's oldest winery is acting like the new kid on the block-- and ready for all competition.

Recently, the St. Helena side of the famed Mondavi family gathered to discuss the new take on their historic winery as it moves into its third century of producing premium wine. Marc and Pete Jr. are pretty much in charge now. Their father, Peter, who will be 93 in November, still comes to his office everyday. Keeping a quiet profile, he is especially interested in the restoration of the original Krug buildings.

Pete Jr., a Stanford grad and the youngest of the triumvirate, acknowledged that the winery may have hurt itself by being too complacent in the past. "When you're dealing with such an important and historic place, you can get bogged down in tradition," he said. "We just didn't keep pace. We tried to offer too many varieties, and we didn't keep pace; but that has changed. Our focus now is to aggressively pursue our wine quality."

Marc (enology, UCDavis) agrees: "Until the mid-90s, we produced something like 28 wines under the Krug label-- like Grey Riesling, Chenin Blanc, Gewurtztraminer, Gamey, even a tawny Port, dry Sauterne, a Chablis," he said. "We needed to get rid of them. It was a nightmare in the vineyards, too."
Pete added: "We just went cold turkey, and in 1995 we just stopped producing them. We cut our offerings in half."

Marc concurred: "We went from 150,000 cases to 50,000 cases. We cut back a lot of dollars in sales for the short term, but we looked at it from a 10-to-15 year standpoint of where we want to be when we grow up, if you will. And we think we've found the right mix."

Pete continued. "We've narrowed it down to Chardonnay, Sauvignon Blanc, Pinot Noir, Zinfandel, Merlot, of course Cabernet Sauvignon. Plus we've created a special Mondavi family reserve portfolio-- a Bordeaux meritage called, "Generations," and a Vintage Selection Cabernet Sauvignon. We want to refocus on Bordeaux reds. Before, they were a third of our production, today they're over two-thirds."

The winery has replanted over 450 acres in the Napa Valley, and is converting all to CCCF organic certification. "By next year's harvest, the Peter Mondavi family expects to be among the largest certified-organic landowners in Napa Valley," Pete said.

With a $7.5 million infusion, there are also dramatic changes in the winery. They have separated their premium Charles Krug wines (now about 80,000 cases) from their inexpensive, 1 million-case CK Mondavi brand, and brought in a new winemaker, Adolfo Alarcon. John Moynier, their winemaker for 22 years, will stay with Marc producing the CK wines. "We've got new, specialized equipment for Krug, and it's kept separate," Pete said. Their small-capacity, Muller fermentation tanks have built-in augers for quick pomace removal. All have both refrigerated and warming jackets for cold soaks, and gentle warming to start fermentation, and for extended macerations.

Pete is particularly impressed with their new Sutter EPC100 Pneumatic Press from Switzerland. "They're the press of choice in Bordeaux," he said, "Because the holes and finish are very clean, it avoids aggressive tearing and shearing of the fruit, skins and the seeds. The programmability of the unit is also great. We now have sorting tables from Delta Stainless, and a metering table with three different size baskets. It's a new winery, a whole new operation, from top to bottom, all family financed." The new production area is enclosed under a huge canopy to shade the fruit from the sun during processing.

Marc said the changes were necessary and long overdue. "The idea began after our marketing agreement with Seagram ended in 1995," he said. "What precipitated the agreement was when distributors were consolidating in the mid 80s after fair trade went out. That really changed the complexion of the distributor network. We had 18 or 20 regional distributors in California in the 70s, but when fair trade went out everybody was all over the place. It became an out of control mess. Seagram approached us, and it seemed like it made sense to get some of their muscle in the market place."

Pete added: "In hindsight, it just didn't work for us. When the 7-year contract expired, we pulled it in, and went back to what we were."

Marc agreed. "Part of it was our fault, They were corporate, and we were family. It was a whole different ball game. The positive part, we started new-- Pete and I talked about resurrecting the Krug label and bring it back to the premium status it should be. We learned a lot. We survived."

In 1943, when their grandfather, Cesare, bought the Krug winery and 147 acres for $75,000, the family did some war-time refurbishing."Time has taken its toll on the buildings, and they're badly in need of repair and seismic retrofitting," Pete said. "We're reclaiming and numbering every piece of the usable wood and keeping the original glass and moldings." They are also reclaiming the 100-year-old redwood staves from the tanks. The famed carriage house will be used for events, and the building now used as a tank room, will be used to cellar barrels.

The brothers are upbeat about the future of Charles Krug and their decision to refocus the winery as an historic landmark and premium brand, and believe they can match anything in the Napa Valley. "We micro-managing everything now, in the vineyards and at the winery," Marc said. He is especially proud of their special label, "Generations," which is an outstandingly rich, spice driven meritage blend of Bordeaux varietals. He first crafted the blend in 1991, when he had both Merlot and Cabernet ripening at the same time, and only one tank. "Then a friend said he had four tons of Cab Franc for sale. My father was out of town, so I said, 'what the hell,' and did a field blend. Actually I called it a Bordeaux blend. When my dad came back, he ask why ' Bordeaux blend' was written on a tank. He thought it was a mistake. Well, I figured I'd already burned my bridges, and I knew I couldn't take it apart, so I told him I was fermenting 10 tons of Cab 5 tons of Merlot, and about 4 tons of Franc together. He looked at me. 'That's over $50 thousand worth of grapes, what are we going to do with it?' he said. I said we'll figure it out. We got plenty of time, a couple of years. One of our winery workers thought up the name, 'generations,' and my Dad said 'perfect.' We don't usually get our fruit coming together like that. So we usually do the blend right after first rackings."

Peter Sr. was in his office reviewing remodeling plans, and verified Marc's story. "I got to admit I was surprised, but it's a great wine. It fits in very well. It's softer and very drinkable," he said. He also remembered the 1944 refurbishing of the Krug estate. "It was during the war, and I was in the service, so it was all done under the direction of my brother and pop. That was quite an undertaking. and I have to give credit to my brother, Bob, because he contacted the right people and was able to get enough supplies to complete the work."

Except for his back problems, Peter said he is doing okay, and remembers well the family's first wine success, and its first endeavor to compete with French wine--Chenin Blanc. "Oh, Chenin Blanc was a big, popular wine-- from Vouvray, in France. So it's a great wine. We both worked it out, my brother and myself. It was a combined effort. I applied the cold fermentation and then sterile filtration that I'd studied in college. That was the secret. It was a very popular wine. but I think what happened was everybody started making it from lower quality grapes and that changed its quality. But it's a delightful wine." Charles Krug. Cesare Mondavi. Peter Mondavi. Napa Valley legends in one bottle.

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