C. Mondavi & Sons: Learned it on the Grapevine

For the Mondavi brothers, the cup is definitely half full.

Imagine a consumer business where the product you’re investing in today won’t hit store shelves for another six years, where a small aberration in weather patterns can devastate your annual output and where you compete with about 14,000 peer producers for the attention of a handful of regional operators licensed to distribute what you’ve made. Welcome to the world of wine making.

“You decide what to plant, then you plant and in four years you get your first crop—then it’s another two years before you get to sell that crop,” explains Peter Mondavi Jr. of the family winemaking empire, C. Mondavi & Sons, founded by his grandfather. “So it’s a very capital-intensive business and you have to look way out. When you plant you hope the market trends six years out are what you anticipated them to be.”

Despite the challenges innate to creating a complex and fragile substance from a notoriously fickle fruit, Mondavi never seriously considered another career. And for good reason. “The wine business is our love, our hobby and our profession,” he says. “And it affords us a wonderful lifestyle that we enjoy.”

Having grown up “driving tractors, walking the fields and tasting wines” in the business, Mondavi is heir apparent, along with his older brother Marc, to the $50 million family company. The brothers currently divvy up responsibilities by label: Peter heads the company’s Charles Krug Napa Valley brand, consisting primarily of Bordeaux varietals. Marc leads the CK Mondavi division, a line of value-priced table wines. Each holds equal shareholder votes on strategic decisions, with their father, CEO Peter Sr.—whose ongoing leadership at age 96 underscores current health claims about the benefits of modest wine consumption— retaining the deciding super vote.

But while the senior Mondavi remains at the helm, his sons have guided some major moves to refocus and reinvent the company. Since 1995, the third-generation Mondavis have slashed the number of wines being produced by half and invested a hefty $25.6 million in converting to certified organic vineyards and adopting sustainability initiatives.

After their father steps down, plans call for the two brothers to take co-CEO titles, managing their separate divisions as always and coming together to hammer out big-picture strategy. [For details on a similar arrangement already in place at Amway, see p. 16] When that time comes, the Mondavi family will have to hope the third-generation brothers fare better than the second generation. Brothers Peter Sr. and Robert inherited Charles Krug Winery from their father, Cesare, in 1959. Soon thereafter, contention over business strategy led to a family split, with Robert leaving the business to launch his own ultimately very successful winery, which was later sold to winery holding company Constellation Brands.

In more recent years family relations have improved, but branding restrictions resulting from the rift still bar C. Mondavi & Sons from any use of the family name beyond a modest tagline that reads “Peter Mondavi Family.”

But Peter Jr. is confident that the brothers will be able to co-lead amicably. “We’re very different and obviously we have arguments, but at the end of the day we get along,” he says. “And unlike Robert and Dad, we agree on the fundamental thing—a commitment to being family oriented. We’re 100 percent aligned on that.”

Ultimately, that orientation may be well suited to a finicky business like winemaking, where quarterly results are tricky to predict and the ROI on any capital investment under consideration would send your average CFO into hysterics. “We’re fine on return on sales—it’s return on assets that’s a different story,” says Mondavi, who suggests that when evaluated on purely a financial basis, C. Mondavi & Sons would be a prime candidate for liquidation. “If you were to look at the return on the [market value rather than book value] of our assets, we’re abysmal.”

Fortunately, that’s not the family’s benchmark, he adds. “Basically all the money in the world doesn’t substitute for the benefits and the pride we get in producing our product.”


  • Get the CEO Briefing

    Sign up today to get weekly access to the latest issues affecting CEOs in every industry
  • upcoming events


    Strategic Planning Workshop

    1:00 - 5:00 pm

    We are in a period of rapid change. Customer needs, technologies, competitors and internal capabilities require companies to review and update their strategies for the new realities. In this workshop, strategy experts Steve Rutan and Denise Harrison will show you a systematic approach to strategic planning to help you refine or redefine your business strategy and approach including:

    • Learn what you need to know to develop an effective strategic plan. Put the right players on the strategic planning team.
    • Develop strategies that leverage your company’s unique position in the marketplace. Lift your management team beyond “business as usual” thought processes and activities.
    • Translate your strategies into action. Achieve your vision for success and generate superior financial results.
    • Identify exactly what you need to do now to position your company for future success.

    To sign up, select this option in your registration form. Additional fee of $695 will be added to your total.

    New York, NY: ​​​Chief Executive's Corporate Citizenship Awards 2017

    Women in Leadership Seminar and Peer Discussion

    2:00 - 5:00 pm

    Female leaders face the same issues all leaders do, but they often face additional challenges too. In this peer session, we will facilitate a discussion of best practices and how to overcome common barriers to help women leaders be more effective within and outside their organizations. 

    Limited space available.

    To sign up, select this option in your registration form. Additional fee of $495 will be added to your total.

    Golf Outing

    10:30 - 5:00 pm
    General’s Retreat at Hermitage Golf Course
    Sponsored by UBS

    General’s Retreat, built in 1986 with architect Gary Roger Baird, has been voted the “Best Golf Course in Nashville” and is a “must play” when visiting the Nashville, Tennessee area. With the beautiful setting along the Cumberland River, golfers of all capabilities will thoroughly enjoy the golf, scenery and hospitality.

    The golf outing fee includes transportation to and from the hotel, greens/cart fees, use of practice facilities, and boxed lunch. The bus will leave the hotel at 10:30 am for a noon shotgun start and return to the hotel after the cocktail reception following the completion of the round.

    To sign up, select this option in your registration form. Additional fee of $295 will be added to your total.