HarveyFamilyWineBlog

Wine & Magic Blended into One Great Event in Napa Valley

Back in June, I wrote about a great wine tasting/magic show that we participated in in Chico.  Well, now we are going to host  one in St. Helena. (along with our Fulton Lane neighbors--Big Horn Cellars, Calafia & David Fulton Winery).   Proceeds will benefit the St. Helena Kiwanis.

This is the first event of its kind for Napa Valley--an afternoon of Enchantment with international champion magician, David Minkin.  He has performed for the likes of Johnny Depp, Chriss Angel, & Rob Reiner.  The hardest part was determining a date when all of us AND the magician would be available.  Unfortunately, we didn't realize all the winemakers are scrambling in the thick of harvest.

Two Wine Tours & Shows on Sunday, October 11th.

Tour #1 begins 1:00 pm

Tour #2 begins 4:00 pm -  Limited Seating - 50 seats per show

Start your tour @ 890 Fulton Lane for Wine Tasting of five wines from Big Horn Cellars, Calafia, Scott Harvey, and Jana Wines paired with hors d'oeuvres from Fulton Lane's own Panevino--one of Napa's finest caterers.

An hour later you will meander across the street to David Fulton Winery for a taste of their acclaimed Petit Sirah and settle in to be amazed by David Minken's one hour of magic.

Amble across vineyard lined Fulton Lane to our house to enjoy dessert, chocolates, port and dessert wines and we can celebrate the magician, David Minkin's birthday.  This is where you can redeem your $20 gift certificate for a 4 pack of wines and have an opportunity to purchase any of the wines tasted at a 15% discount.

It would be great to see you there.  You can purchase tickets at www.scottharveywines.com/magic

Blogging Inspiration from ZAP

Scott and I attended the general meeting for ZAP (Zinfandel Advocates & Producers) hosted at V. Sattui in Napa Valley yesterday.  It's a terrific organization and really works hard at promoting Zinfandel.  Scott was one of the founding members 16 years ago.  Today we make five Zinfandels (Vineyard 1869, Scott Harvey Amador Old Vine, Scott Harvey Amador Mountain Selection, Jana Napa Old Vine, and InZinerator) so it's a variety that's very important to us.

After a delicious lunch, the meeting portion began.  A scholarship fund at Sonoma State is being set up in honor of Don Reison, formerly of Ridge Vineyards.  In addition, they announced a raffle fundraiser for an amazing trip to Hawaii--roundtrip airfare for 4 and a 7 night stay at the Marriott Wialea.  Raffle tickets are only $20 apiece for this wonderful opportunity.  Contact us if you're interested.

Featured speakers were the following bloggers:  Andy Gamitian who created Flights Wine Blog, Christian Oggenfuss of www.vintuba.com, a wine centered video and podcasting blog, Thea Dwelle, Luscious Lushes blog, Ray Johnson author of The Good Life and Enjoying Wine, and Russ Beebe, Winehiker Witiculture.  The Twitter and social media specialist was Lisa Adams Walter of Adams Walter Communications.  Most of the speakers were early pioneers of blogging and it's been beneficial to their careers.  I'm glad Scott was there because now that harvest is over, I hope you will see many more posts from him.  He has a lot of knowledge to share. 

Halloween in Napa Valley

Terra is one of the best restaurants in Napa Valley.  It's not the type of place one would think of to go for Halloween.  We discovered Halloween at Terra three years ago with our friends, Bill & Connie, and now can't imagine Halloween without Terra.  This year we had our friends from Orange County, Dean and April, come to visit especially for this treat. Dean had the best costume.  Management agreed that this was the first time a bare-chested customer was ever served on their premises.    
The staff really gets into the spirit, as you can see.  How many times are you visited by a flower pot during dinner. 

Scott was excited to find a German Fruhburgander - an early ripening mutation of Spatburger (Pinot Noir).  It is classified as a separate variety.  It went perfectly with their Signature dish - Broiled Sake marinated Alaskan Black Cod.  As you can see, the entire staff got into the spirit of the evening. We had hoped to go to the Silverado Brewery bash afterwards but decided we were pretty satiated with food and drink at Terra.

Relocating our Tasting Room in Sutter Creek on September 19

After almost three years in our wonderful little, historic building that housed our tasting room, we have decided to move to Main St.  The town of Sutter Creek is only a few blocks long, but being on Eureka St. just a block off Main Street, made it difficult for people to find us.

We discovered a spot about twice the size of our current tasting room right next to the Foxes Bed and Breakfast. Here are a few pictures of the empty building.  We someday hope to utilize the upstairs with its widow's walk for private tastings and seminars.

 

We've been working hard building walls and getting everything ready.  The wine bar will be three times the size so we're hoping for three times the sales.  There are two wine tasting rooms in Sutter Creek right now with another one scheduled very soon.  We all hope to have Sutter Creek-the town Sunset Magazine declared to be the gold country's best- become a wine destination. It truly is the jewel of the mother lode.

Scott's daughter, Paulette Harvey Williams, and long time resident, "Muffin" Simpson will be taking care of day to day operations.

Saturday, September 19 will be our opening with a Grand Opening to follow later in the fall.  Stay tuned for great deals all weekend, however.

Mention you read this blog and you have the opportunity to purchase a 3 Liter Double Magnum of Syrah for $30 (Regular $85)

Hope to see you there

Winery economics

We are often asked how a standard winery business plan works.  As with so many things these days it is changing as our style of marketing changes.  In the past we depended on and sold most of our wine through distributors in what is known as the three tiersystem.  We produce wine, it is sold to a distributor who sells it to a store or restaurant who then sells it to you. 

Lets say our cost of goods (what it cost to produce a case of wine) is $50.  We then sell that wine trying to generate a 50% gross margin, which means we would sell the wine to the distributor for $100. Out of the $50 generated above the cost of goods we allocate $20 for cost of sales (what it cost to sell the wine, salesperson wages and expenses, any discounts, travel etc.) and $20 for general and administrative (the cost run the wine company) and hopefully there is a $10 bill left for profit.  It is what we call the 50, 20, 20, 10 rule.

The distributor than takes the case of wine they paid $100 for and add their laid in cost, (what it cost them to get the wine to their state and their warehouse, any state taxes, etc.)  The typical laid in cost for a case of wine from our Napa Valley warehouse to a distributor in Chicago is about $8 dollars.  So they take the laid in cost , now $108 and work off of that.  The distributor then marks the wine up 33% on laid in cost or 25% of their selling price.  This number is the same, $35.64.  $35.64 is 33% of $108 or 25% of $143.65.  Often,if the distributor will be offering quantity discounts, they will add this to the asking price, so they can discount it back.

Next the store takes its purchase price, now $144 and and works on 50% on cost or 33% on sale.  This number is $72.  $72 is 50% of $144 or 33% of $216.  So the case of wine that cost me $50 ($4.17/bottle) cost the wine buyer in Chicago $216 case or $18.00 per bottle. 

This distribution three tier system is rapidly being taken over by the larger wine companies that can get and hold onto the distributors attention.  As a small winery the amount of money generated by our brands for the distributor is far less than that of a large higher volume winery.  The amount of attention the distributor sales staff gives your wine is directly correlated to the percentage of gross revenue your brand generates for the distributor.  Therefore, we are being forced to find other ways to get our wine to the consumer.  If we can sell our wines direct to the customer either through our internet website, our tasting rooms, wine clubs, third party internet websites, we can keep a higher percentage of the customer dollar or sell the wine for less.  As we slowly change from the three tier distributor system to direct sales our 50,20,20,10 rule changes more to a 60,30,20,10 rule or 70,35,25,10 rule. 

Blogging and the Opportunities it Creates

This blog is the first of what will hopefully be a daily blog.  A new discipline that I'm told I need to do for the ever changing way that wine is sold.  Actually, I think it is a good idea and a great opportunity to better communicate with our enjoyable and wonderful customers.

 

A high percentage of winemakers enjoy staying in the winery and the wine lab and are not fond of meeting the actual people that enjoy their art.  When you have a winemaker that is a people person, you have a real asset.  What better person to explain the art behind each wine than the person who put it together.  The winemaker is the most credible person for this job.  If they enjoy people and are good at public speaking, they are the best person to convey the wine's story.

 

For the last thirty seven years I have been doing just this selling wine through the three tier distribution system by visiting each market area.  While there I’ll ride around with sales people visiting wine shops and restaurants, do tastings for the distributor sales staff,  tastings for restaurant staffs and winemaker dinners all to get the story out. 

 

Along comes the internet.  A new opportunity to tell the wine's story directly to anyone interested in reading the blog.  How wonderful!  Now I can do it from my office, while looking out the window over the beautiful Napa Valley Vineyards.  Only problem, my prose seem to flow in an understandable fashion, but my spelling is horrific.  Thank goodness for spell check.

Verasion in the Napa Valley

It's August in Napa Valley and a buzz word dominates the conversations between winemakers and growers.  The word verasion signals the beginning of harvest.  We all know that a high energy time of year is right around the corner.

There is certainly a lot of excitement at our house when verasion starts.  The reason that verasion is important is because it tells us when harvest will be.  When the first berries start turning purple, we record that date.  During the next two week period, we record the changes.  Once all the grapes are purple (full verasion) it will be 40 to 45 days until harvest.  We know now when we are going to be really busy.  I get excited as I discoverthe distinctive characteristics that this vintage gives us as I taste the first purple berries.  This vintage is shaping up to be one of the best!

Riesling Wars at the St. Helena Wine Center Napa Valley vs. Germany

Our local wine shop, the St. Helena Wine Center, does weekly tastings which are pretty creative.  A couple of weeks ago it was Napa vs. Germany in a Riesling tasting.  Among the Napa producers was our Jana 2007 Old Vine Riesling, Trefethen 2007 Dry Riesling, the 2008 Smith Madrone Spring Mountain, 2008 Terra Valentine Spring Mountain, Egelhoff 2008 Riesling and the 1995 Stony Hill. 

The German wines were a 2007 Von Simmern Hattenheimer Nussbrunnen Kabinett Troken (troken means dry), 2007 Selbach-Oster Zeltinger Sonnenuhr Spatlese Troken, 2007 Stephan Erdener Treppchen Feinherb Kabinett, 2007 Dr. loosen Wehlener Sonnenuhr Spatelese, 2007 Donnhoff Schlossbockelheimer Kupfergrube Spatelese and the 1990 Richter Veldenzer Elisenberg Spatlese.

Three of us Napa producers went through the wines together, Jana & I, Stu from Smith Madrone and Hailey from Trefethen.  All the wines were great showing both ageability and the many sides to Riesling.

The Napa Rieslings except for ours where produced in a higher alcohol richer style.  Napa Valley produces grapes with full maturity, but not over ripe maturity at 22 Brix, while Germany gets mature flavors at lower brix.  Germany being a cold climate grape growing region needs to let the grapes hang longer into the fall to reach grape maturity, and because of the long hang time reaches maturity at lower brix maintaining higher acidity.  The difference betwwen Napa (what I call warm climate Riesling) and Germany (cold cimate Riesling) was well shown in the wines poured.  Both styles are delicious.  You could tell by what we all purchased what each of us preferred.  I ended up taking home the Von Simmern and the Selbach-Oster.  Our Rieslings are made more in the German Halb Troken Kabinett style.  It takes some careful experienced winemaking to develop this cold climate style from Napa's warm climate grapes. 

Shareholder Meeting Part II - The event

Now that I've explained the parameters leading into our fifth annual shareholder meeting, I'll tell you how it went.

For the last four years we have always had the shareholder meeting in St Helena at our office and home.  We have a lot of shareholders from both sides of the Sierra's, the foothills and from Reno.  This time they asked to have the meeting in Amador county where we get so many of our grapes.  What a great idea, the venue not only made for an interesting time, but was much less expensive.

As the shareholders where showing up for an 11 AM meeting they where greeted in the banquet hall of Teresa's Restaurant in Jackson, Amador County with a cold glass of the Jana Rose.  Teresa's is a famous old family style Italian restaurant that started out as a boarding house for the gold miners, built and operated by Teresa Giurlani.  Today it is still producing wonderful family style dinners and is run by Teresa's grandchildren of which Phil and Jenny Giurlani are shareholders. 

Following the meeting we progressed right into a tasting of the new releases, all the 2006 vintages of the Scott Harvey Mt. Selection and J&S Reserve Zinfandel, Barbera and Syrahs as well as the new vinatge of the Jana 2005 Cathedral.  The Cathedral is our Napa Valley top of the line meritage style Cabernet Sauvignon blend.

The  tasting moved right along into lunch preparred by Joe Giurlani.  He has prepared many a great wine dinner for me and my guest over the last 30 years.  When I ran Santino Winery and had a wine distributor group in town, I always went to Joe to take good care of them.  Lunch kept coming one course after another and went great with the wines.  We finished lunch around 2 PM.  The group was instucted to go get some rest and report back to the Teresa's parking lot at 4 PM for a vineyard tour.

We meet at 4 PM to car pool to four of the main vineyards we produce the Scott Harvey wines from.  The first vineyard was the Bowman Zinfandel.  It was planted in 1974 and produces the bulk of out Mt. Selection Zinfandel.  It sits on top of the highest hill in the Shenandoah Valley having an amazing view of all the surrounding vineyards.  Shareholders' Dick Bowman, Jo Gledhill along with son Chuck poured us a glass of the Zinfandel as they pointed out all the other vineyards we were going to visit.  Next stop was fellow shareholder Bruce Manby's  Barbera Vineyard that is farmed by my ex-wife Terri Harvey.  As we tasted and enjoyed the wine she showed the group the difference in how Barbera looks and is farmed from Zinfandel.  The next was her own vineyard which is the oldest documented Zinfandel vineyard in America.  We produce the Zinfandel labeled "Vineyard 1869" from this vineyard.  1869 is the date of the deed that substanciates the age of the vineyard.  The deed was signed by Ulysses S. Grant in 1869.  As she was talking about the old vines I ended up stepping on a small Rattle Snake which pretty much ended the lecture as she went and got a shovel and promptly cut the snake in half.  The last vineyard is also a sharholder vineyard owned by Charles Spinetta.  It produces our Mt. Selection Barbera.  We walked out into the vineyard at 104 degrees and blesssed the new 2009 vintage still maturing on the vines by tossing a small amount of our Barbera on the vines.  This is done every year to bless the new vinatge so that it knows how to develop into a great vinatge like the previous ones.

For those shareholders that lasted through the vineyard tour, we all met up at Teresa's for dinner.  As usual, we weren't given any menus and left it to Joe to razzle dazzle us.  He did of course and the wines went well with the company and the meal.

Annual Shareholder Meeting for a Small Business

In California if you're a C Corp,  it's mandatory to hold a once a year shareholder meeting.  This is always a stressful time for us even though (in an earlier post) we mentioned how fortunate we are to have such a great group of shareholders. 

This is our 5th year anniversary.  A milestone for a small business.  It's impressive to see how important small businesses are to our economy.  Here are a few highlights from Small Business Association: 

• Represent 99.7% of all employer firms
• Employ about half of all private sector employees
• Pay more than 45% of U.S. private payroll
• Have generated 60-80% of net new jobs annually over the last decade
• The average annual revenue for a small business is $3.6 million
• The average annual revenue for a small business with a website is $5.03 million 

We have structured our corporation "Creative Wine Concepts" with the philosophy that it is a shareholder company for the shareholders.  The annual shareholder meeting is a great opportunity to bring all the company owners together to get to know each other and have a good time with their company. 

Over the years in all the wineries I have built and run I always had a policy, "any home winemaker that brought me their wine, I would evaluate the wine both tasting it and by laboratory testing and make any suggestions on what I would do if the wine were my wine".  These people not only became good customers for the winery's wines but when we started Createve Wine Concepts, they jumped at the opportunity to become shareholders and winery owners.  

To get these shareholders involved we developed a policy called, "tag along rights" meaning any shareholder that wishes to tag along can come along with me on whatever I'm doing that day.  If I'm going through the vineyards pulling samples at harvest time, they come along and help.  If I'm doing lab work and blending wine, I put them to work running alcohols and tasting the different blends.

This makes for a fun company with lots of owner participation.  The shareholders get to be involed in a winery and its operations only to the extent they want to.  We have have been fortunate to have a diverse shareholder group.  They have designed labels, produced videos, poured at wine tastings, sold wine, written pieces for us, provided good sound MBA type business and financial advice, driven truck during harvest delivering grapes, helped on the bottling line, helped with securing good pricing on bottling materials, among many other things. 

When  we get together once a year for the mandatory shareholder meeting, this diverse group comes together with a common goal, "to be part of a financially healthy wine company that is a leader in developing some of California's finest premium wines".  The wines are a true reflection of their combined efforts.

Making Room for the 2009 Harvest

In July, as the grape bunches are growing to full size, we are making room for the incoming vintage by bottling.  We are now bottling the wines taking up the space in the tanks and barrels that we will need for the new vintage.  This week we are bottling the Jana 2008 Old Vine Napa Valley Riesling and California Rose as well as the 2007 Scott Harvey Mountain Selection Amador County Barbera.  Bill and I have spent the last two weeks tasting through the final blends to make sure they are right.  From there the work orders are cut.  Yesterday was spent at the winery with the crew making sure the wines turn out like the final blends in the lab.  Tomorrow, we’ll be up at 4 AM to leave at 5 to spend a long day on the bottling line.  It’s a long process from bud break to bottling and exciting when the wine finally goes into the bottle.  Of course when we get home, we’ll just have to pop a few of the new wines for one last check. 

 

 Here's a video we took last August 22 when the grapes were being picked.  It's close to one year from vineyard to bottle.