Family keeps vineyards going after selling off winery business

SMALL BUSINESS

August 24, 1992|By Jane Applegate | Jane Applegate,Los Angeles Times Syndicate

AHOPLAND, Calif. -- When 10-year-old Barney Fetzer heard his family's winery was being sold and they could no longer use the Fetzer brand name, he was worried that he would no longer be a Fetzer.

His father, Jim, the outgoing president, assured him and the rest of the Fetzer grandchildren that although their grandmother and 11 aunts and uncles were selling the successful family business, they would all still be Fetzers.

Two weeks after the Fetzers culminated a three-year courtship with Louisville, Ky.-based Brown-Forman Corp. by selling the thriving winery business, the family was still adjusting to the idea of giving up the legacy created by the senior Barney Fetzer in 1958.

Shortly after the sale became public, Jim Fetzer sat in a local cafe, outlining the family's plans. "We are not really losing what we really love -- the vineyards," said Fetzer, who serves as family spokesman. The Fetzers are keeping 11 of their 12 properties and have agreed to grow and sell grapes to Brown-Forman.

Although a non-compete agreement prohibits the Fetzers from selling wine or going into the restaurant business, they aren't worried about keeping busy. The family has already formed a new partnership, called Kohn Properties after Kathleen Fetzer's

maiden name.

"We'll start over," Jim Fetzer said. Plans call for the new entity to buy vineyard property around California and further the family's interest in organic farming and grape-growing.

Currently, 546 of the family's 1,400 acres of vineyards are certified organic by an industry group. The remaining acres are awaiting certification and are farmed without the use of synthetic pesticides or fertilizers. The Fetzers' experimental vineyard is a magnet for winemakers and scientists from around country.

When Barney Fetzer, a former lumber company executive, died in 1981, Jim Fetzer said, most people expected the winery to collapse. Instead, Barney's children turned the business, which began by selling grapes to hobbyist winemakers, into one of the six largest wineries in the U.S.

Fetzer, with its 300 or so employees, is best-known for its popular Chardonnay, White Zinfandel and Gewurztraminer wines. Last year, Fetzer Vineyards sold about 2 million cases of wine, with the average case selling for about $50.

"As the business grew, the business ended up running the family instead of the other way around," said John Fetzer, chief executive, on the day the sale was announced.

The Fetzers chose Brown-Forman over other suitors because they had a "good gut feeling" about the company, according to Jim Fetzer. Fetzer said although it is a big company, with 6,000 employees, Brown-Forman respects established brand names and is good to the employees of the companies it acquires. Although neither side is disclosing the sales price, sources close to the deal estimate it's worth at least $100 million and could be as much as $230 million.

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