Category Archives: family wine businesses

The Curse of Corporate Wine-Think Déjà Vu?

October 15, 2024 By in economic crisis, family wine businesses, wine, wine markets 3 Comments

The global wine industry continues to adjust to the “new normal” market environment, with recent news stories focusing on strategies to support demand (Come Over October), grubbing-up programs to reduce grape supply, and restructuring wine winemaking businesses (Vintage Wine Estates bankruptcy, Duckhorn Vineyards acquisition, etc.) after a surge of consolidation fueled by cheap money came to a sudden end.

The restructuring has sometimes returned wineries to the people and families that founded them. In other cases (here I am thinking specifically about Stags Leap Wine Cellars and Col Solare in Washington State) a family-winery partner (the Antinori family) has acquired control from its unintended private-equity co-owner. I hesitate to generalize, but the situation suggests that the advantages of family ownership and control in the wine business are becoming clear again.

I wrote a series of columns about family versus corporate wine regimes back in 2015 and I thought it might be useful to re-publish excerpts from two of them now because the issues they addressed seem relevant again today. Hope you find them interesting.

The Curious Dominance of Family-Owned Wine Businesses in the U.S.

May 5, 2015

Last week’s column about the rise and fall of the Taylor Wine Company of New York raises a number of interesting issues and one of them is the singular importance of family-owned and privately-held businesses in the U.S. wine industry and the very mixed record of publicly-listed wine corporations. In retrospect, a case can be made that Taylor’s downfall began when they made the initial move from family ownership to public corporation.big10

The conventional wisdom holds that family-owned and privately held firms can be very successful, but their scale and scope are necessarily limited. Corporations, it is said, can have better access to capital and may be able to negotiate risk more successfully because of limited liability structure. You might expect the largest firms in any given industry to be corporations and this is true in some industries, but not in others.

Wine Exceptionalism

Wine is one exception to the dominant corporation rule. Here (above) is a table of the ten largest wine businesses in the U.S. market (measured by estimated or reported volume not value of sales) for 2014 and 2003. The data are from Wine Business Monthly, which publishes an analysis of the 30 biggest U.S. wine firms each February.  I’m looking at just the top ten to keep the analysis simple, although I should note that these ten firms collectively account for about three-quarters of all wine sold in the U.S.

Looking at the 2014 data, you will note that only four of the top ten firms (those in italics) are public corporations or subsidiaries of public corporations. The other six are family-owned or, like The Wine Group, privately-held and together they produce more than half of all the wine sold in America. [editors note: There was a typo in te graph, which should list The Wine Group not The Wine Company.] The bias towards private- and family-ownership is even stronger if we look at the next 20 wineries where only a few corporate names like Pernod Ricard make the list.

Looking closely at the 2014 numbers it is hard not to be impressed by the growth of family firms Delicato and Jackson Family Estates and also the success of Ste Michelle Wine Estates, which seems to behave like a privately-held firm even though it is a subsidiary of a public one, albeit in a different line of business (Altria specializes in tobacco products, not drinks).

All in the Family

Family- and private-owned wine companies are if anything more important today than they were before the Great Recession. Why are family-owned wineries so vibrant despite their structural economic limitations?

The conventional answer to this question — and there is in fact a substantial academic literature dealing with family businesses and even family wine businesses — stresses the ways that family businesses take a multi-generational approach and are able to negotiate the trade-off between short run returns and long run value. Corporations, it is said, are sometimes driven too much by quarterly returns and end up sacrificing the long term to achieve immediate financial goals.

When business requires a long run vision, it is said, families gain an advantage. Wine is certainly a business where it is necessary to look into the future if only because vines are perennials not annuals like corn or soybeans and successful brands are perennials, too.

Another school of thought examines issues of trust and transactions costs within the firm and the ways that family ties can reduce internal barriers and make interactions more effective.  It is commonplace to say that wine is a relationship business and family firms may have advantages in this regard. I have knows some family wine businesses that even go out of their way to work with family-owned distributors and so forth.  I think one author saw family-to-family links (the Casella family and the Deutsch family) as keys to the success of Yellow Tail brand wine.

Maybe the Real Question Is …

There are good explanations for the success of family-owned wine businesses, but sometimes they feel a bit ad hoc, tailored to explain a particular case and less capable of generalization.  And they often fail to fully account for the fact that many family businesses (and family-owned wine businesses) either fail or, like the Taylor family, end going over to the dark corporate side. Family relationships can be good, bad or ugly — you cannot think of the Mondavi family story without channeling an episode of Family Feud) and not every new generation wants to stay in the business. So there must be something more here than simple families think long-term. But maybe we are actually asking the wrong question.

Maybe the question isn’t why family-owned wine businesses are so strong and instead why corporate owned wine businesses are sometimes so ineffective. Is there something about wine that turns smart corporate brains to mush (not all of them, of course, but maybe some of them)? Come back next week for some thoughts on this provocative question.

The Curse of Corporate Wine-Think?

 May 12, 2015

Protecting Assets versus Leveraging Them

One difference that I have noticed about family wine businesses versus some of the corporations regards the role of key assets such as brand and reputation.  Many family wineries that come to mind seems to see their role as protecting brand and reputation so that they will continue to provide benefits well into the future. Some corporations that come to mind, on the other hand, seem to focus on leveraging brand and reputation in order to increase short run returns.

What’s the problem with leveraging a brand? Leverage has the potential to increase returns in any business, but it also increases risk. And one risk is that the integrity of key assets can be undermined by the leverage process itself.

An example? Well, I hate to pick on Treasury Wine Estates because they have seen enough bad news in the last few years, but one of my readers emailed me in dismay when a news story appeared about Treasury’s latest market strategy. I’ll use this as an example, but Treasury isn’t the only wine corporation that I could pick on and maybe not even the best example

One element of Treasury’s plan is to develop brands for the “masstige” market segment, which means taking a prestige brand and levergaing it by introducing a cheaper mass market product that rides on the iconic brand’s reputation. 

Masstige? Sounds like something from a Dilbert cartoon, which means of course that it is a totally authentic contemporary business term. Prestige fashion house Versace, for example, seems to have developed a masstige product line for mass market retailer H&M. The line was launched in 2011 and I’m not sure where it stands today. Maybe it was a big success? If  masstige  worked for shoes and dresses, how could it be a bad idea for wine?

I’m sure a prestige association helps sell the cheaper mass market products, but I can think of some examples in the wine business (Paul Masson? Beringer?  Mondavi?) where it might have undermined the iconic brand itself a little or a lot, which seems self-defeating. I know that has happened in the fashion field (think about how the Pierre Cardin brand was diluted by cheap logo products) so I imagine it could be a factor in wine, too.

Think Global, Source Global

Here’s another example. Regional identity is more important in wine than in some other industries and Treasury owns some famous “wine of origin” brands — wines associated with particular regions, which are valuable assets.  But my worried reader was concerned about Treasury’s plan to source globally to expand the scale of some of these regional brands.

“Building scale via sourcing breadth is one of the most critical platforms necessary for the globalization of wine brands,” according to the report. Gosh, that even sounds like corp-speak, doesn’t it? Logical, I suppose, but maybe locally-defined brands need to be locally sourced to maintain authenticity? Maybe consumers would be suspicious of a Stags Leap wine, to make up an example, that is sourced from Australia or some other distant place as a way of leveraging its brand power? I wonder just how flexible these terroir-based brand concepts are in the real world where consumers are the ones who decide what is authentic and what is bogus.

Global Market Moral Hazard

Some big wine corporations that have had troubles in recent years seem to have made the mistake of thinking that big global markets will soak up all that they (and the other big firms) can produce. It’s a matter of global-think. The global markets are huge. There’s always a market for another dozen containers somewhere in the big world of wine, or so it might seem, and so the risk of failure is misunderestimated, to use a GW Bushism.

In finance we would say that the false sense that the global market is always there to bail you out leads to moral hazard and this is probably true in wine, too.  Moral hazard encourages excessive investment and promotes booms and the busts that often follow. What seems to be true for an individual company is not necessarily true for an industry and misunderstanding this sort of risk is downright dangerous in an industry like wine, which is by its nature subject to cycles and booms and busts.

If private- and family-firms avoid the tendency to think global when their markets are local and thus avoid misunderestimating risk and if they really do work to preserve rather than leverage key assets it might help explain their lasting power and influence. Lots of “ifs” there, but its a theory. What do you think?

The Curse of Corporate Wine-Think?

May 12, 2015 By in family wine businesses, wine brands, wine markets 6 Comments

When I wrote about the global financial crisis in my 2010 book Globaloney 2.0: The Crash of 2008 and the Future of Globalization, I focused on three forces that I saw as both key to the crisis and limits on global finance: misperceptions of risk, the excessive use of leverage and the resulting moral hazard, which produced the boom and then the bust.

Now, as I think about the reasons why corporations are not more dominant in the wine industry, I find myself returning to those same themes. Is this an important insight, or am I just a broken record? You be the judge!

Note: This is the final column in the current series on family wine businesses. This column is more speculative than the earlier ones — as many questions as answers! — reflecting the fact that it is difficult to generalize about either corporate wineries or family and private wine firms.

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Asking the Right Questions

Last week’s column ended by questioning the question of the curious success of family wine business. There are good explanations for the success of family-owned wine businesses, I wrote,  but sometimes they feel a bit ad hoc, tailored to explain a particular case and less capable of generalization.  And they often fail to fully account for the fact that many family wine businesses  either fail or, like the Taylor family, end going over to the dark corporate side.

The question of why family wine businesses are successful isn’t easily answered. But maybe we are asking the wrong question. Maybe the issue isn’t why family-owned wine businesses are surprisingly robust and instead why corporate owned wine businesses are sometimes ineffective? Is there something about wine that turns smart corporate brains to mush (not all of them, but a few)?

Protecting Assets versus Leveraging Them

One difference that I have noticed about family wine businesses versus some of the corporations regards the role of key assets such as brand and reputation.  Many family wineries that come to mind seems to see their role as protecting brand and reputation so that they will continue to provide benefits well into the future. Some corporations that come to mind, on the other hand, seem to focus on leveraging brand and reputation in order to increase short run returns.

What’s the problem with leveraging a brand? Leverage has the potential to increase returns in any business, but it also increases risk. And one risk is that the integrity of key assets can be undermined by the leverage process itself.

An example? Well, I hate to pick on Treasury Wine Estates because they have seen enough bad news in the last few years, but one of my readers emailed me in dismay when a news story appeared about Treasury’s latest market strategy. I’ll use this as an example, but Treasury isn’t the only wine corporation that I could pick on and maybe not even the best example

One element of Treasury’s plan is to develop brands for the “masstige” market segment, which means taking a prestige brand and levergaing it by introducing a cheaper mass market product that rides on the iconic brand’s reputation. 

Masstige? Sounds like something from a Dilbert cartoon, which means of course that it is a totally authentic contemporary business term. Prestige fashion house Versace, for example, seems to have developed a masstige product line for mass market retailer H&M. The line was launched in 2011 and I’m not sure where it stands today. Maybe it was a big success? If  masstige  worked for shoes and dresses, how could it be a bad idea for wine?

I’m sure a prestige association helps sell the cheaper mass market products, but I can think of some examples in the wine business (Paul Masson? Beringer?  Mondavi?) where it might have undermined the iconic brand itself a little or a lot, which seems self-defeating. I know that has happened in the fashion field (think about how the Pierre Cardin brand was diluted by cheap logo products) so I imagine it could be a factor in wine, too.

Think Global, Source Global

Here’s another example. Regional identity is more important in wine than in some other industries and Treasury owns some famous “wine of origin” brands — wines associated with particular regions, which are valuable assets.  But my worried reader was concerned about Treasury’s plan to source globally to expand the scale of some of these regional brands.

“Building scale via sourcing breadth is one of the most critical platforms necessary for the globalization of wine brands,” according to the report. Gosh, that even sounds like corp-speak, doesn’t it? Logical, I suppose, but maybe locally-defined brands need to be locally sourced to maintain authenticity? Maybe consumers would be suspicious of a Stags Leap wine, to make up an example, that is sourced from Australia or some other distant place as a way of leveraging its brand power? I wonder just how flexible these terroir-based brand concepts are in the real world where consumers are the ones who decide what is authentic and what is bogus.

Cupcake Vineyards, a Wine Group brand, is an example of a multi-regional strategy that has been astonishingly successful, so it is clearly possible to build a globally sourced brand and perhaps this is Treasury’s model. But I’m suspicious of the idea of leveraging a place-specific brand through global sourcing. Does it make sense to try to turn icon Penfolds, for example, into a Cupcake look-alike? Maybe! But I worry that you’d lose what’s important about Penfolds in the process.

Treasury has no doubt studied this thoroughly and they are probably right about their strategies and I am probably wrong, but it seems problematic to me. I wonder if family firms are more likely to resist corporate wine-think and  try to protect key assets like a prestige brand or a regional identification while corporations are driven instead to try to leverage these assets to expand their market share? I am sure there are counter-examples to this theory and I can think of a few myself. I’d appreciate hearing from readers in the comments section below.

Global Market Moral Hazard

What about moral hazard? Some big wine corporations that have had troubles in recent years seem to have made the mistake of thinking that big global markets will soak up all that they (and the other big firms) can produce. It’s a matter of global-think. The global markets are huge. There’s always a market for another dozen containers somewhere in the big world of wine, or so it might seem, and so the risk of failure is misunderestimated, to use a GW Bushism.

In finance we would say that the false sense that the global market is always there to bail you out  leads to moral hazard and this is probably true in wine, too.  Moral hazard encourages excessive investment and promotes booms and the busts that often follow. What seems to be true for an individual company is not necessarily true for an industry and misunderstanding this sort of risk is downright dangerous in an industry like wine, which is by its nature subject to cycles and booms and busts.

If private- and family-firms avoid the tendency to think global when their markets are local and thus avoid misunderestimating risk and if they really do work to preserve rather than leverage key assets it might help explain their lasting power and influence. Lots of “ifs” there, but its a theory. What do you think?

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Thanks to everyone who has followed this series. Next up: what wine can learn from the analysis of the language of restaurant menus.

The Curious Dominance of Family-Owned Wine Businesses in the U.S.

May 5, 2015 By in family wine businesses, wine investment, wine markets 5 Comments

Last week’s column about the rise and fall of the Taylor Wine Company of New York raises a number of interesting issues and one of them is the singular importance of family-owned and privately-held businesses in the U.S. wine industry and the very mixed record of publicly-listed wine corporations. In retrospect, a case can be made that Taylor’s downfall began when they made the initial move from family ownership to public corporation.big10

The conventional wisdom holds that family-owned and privately held firms can be very successful, but their scale and scope are necessarily limited. Corporations, it is said, can have better access to capital and may be able to negotiate risk more successfully because of limited liability structure. You might expect the largest firms in any given industry to be corporations and this is true in some industries, but not in others.

Wine Exceptionalism

Wine is one exception to the dominant corporation rule. Here (above) is a table of the ten largest wine businesses in the U.S. market (measured by estimated or reported volume not value of sales) for 2014 and 2003. The data are from Wine Business Monthly, which publishes an analysis of the 30 biggest U.S. wine firms each February.  I’m looking at just the top ten to keep the analysis simple, although I should note that these ten firms collectively account for about three-quarters of all wine sold in the U.S. You can find a link to the whole list at the end of this column.

Looking at the 2014 data, you will note that only four of the top ten firms (those in italics) are public corporations or subsidiaries of public corporations. The other six are family-owned or, like The Wine Group, privately-held and together they produce more than half of all the wine sold in America. The bias towards private- and family-ownership is even stronger if we look at the next 20 wineries where only a few corporate names like Pernod Ricard make the list.

The picture becomes even more interesting if you look at the list for 2003, the first year that Wine Business Monthly released its Top 30 report. Many of the players remain the same, but the names of three public companies (shown in boldface) that were in the top ten a dozen years ago have disappeared by 2014: Beringer Blass Wine (now part of Treasury Wine Estates), Robert Mondavi Winery (now part of Constellation Brands), and Brown-Forman Wines, which sold its big Fetzer wine business to Concha Y Toro in 2011 so that it could focus on spirits. Concha Y Toro is #11 on the 2014 list.

Looking closely at the 2014 numbers it is hard not to be impressed by the growth of family firms Delicato and Jackson Family Estates and also the success of Ste Michelle Wine Estates, which seems to behave like a privately-held firm even though it is a subsidiary of a public one, albeit in a different line of business (Altria specializes in tobacco products, not drinks).

All in the Family

Family- and private-owned wine companies are if anything more important today than they were before the Great Recession. Why are family-owned wineries so vibrant despite their structural economic limitations?

The conventional answer to this question — and there is in fact a substantial academic literature dealing with family businesses and even family wine businesses — stresses the ways that family businesses take a multi-generational approach and are able to negotiate the trade-off between short run returns and long run value. Corporations, it is said, are sometimes driven too much by quarterly returns and end up sacrificing the long term to achieve immediate financial goals.

When business requires a long run vision, it is said, families gain an advantage. Wine is certainly a business where it is necessary to look into the future if only because vines are perennials not annuals like corn or soybeans and successful brands are perennials, too.

Another school of thought examines issues of trust and transactions costs within the firm and the ways that family ties can reduce internal barriers and make interactions more effective.  It is commonplace to say that wine is a relationship business and family firms may have advantages in this regard. I have knows some family wine businesses that even go out of their way to work with family-owned distributors and so forth.  I think one author saw family-to-family links (the Casella family and the Deutsch family) as keys to the success of Yellow Tail brand wine.

Maybe the Real Question Is …

There are good explanations for the success of family-owned wine businesses, but sometimes they feel a bit ad hoc, tailored to explain a particular case and less capable of generalization.  And they often fail to fully account for the fact that many family businesses (and family-owned wine businesses) either fail or, like the Taylor family, end going over to the dark corporate side. Family relationships can be good, bad or ugly — you cannot think of the Mondavi family story without channeling an episode of Family Feud) and not every new generation wants to stay in the business. So there must be something more here than simple families think long-term. But maybe we are actually asking the wrong question.

Maybe the question isn’t why family-owned wine businesses are so strong and instead why corporate owned wine businesses are sometimes so ineffective. Is there something about wine that turns smart corporate brains to mush (not all of them, of course, but maybe some of them)? Come back next week for some thoughts on this provocative question.

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You can view the February 2015 issue of Wine Business Monthly here. The story on the Top 30 wine U.S. wine businesses begins on page 40.

Family Wineries: Fabulous Rise & Dreadful Fall of Taylor Wine Company

April 28, 2015 By in book reviews, family wine businesses 27 Comments

Thomas Pellechia, Over a Barrel: The Rise and Fall of New York’s Taylor Wine Company. State University of New York Press (excelsior editions imprint), 2015

Some say that Hammondsport, New York was the real life inspiration for the town of Bedford Falls, the setting of Frank Capra’s classic film It’s a Wonderful Life. The film chronicles the story of how families struggle to survive in a harsh world of impersonal economic forces and very personal hopes and fears. It’s one of the saddest films ever made and one of the most hopeful, too, since love and hope triumph over greed and despair in the end.

Hammondsport’s real story, as chronicled in Thomas Pellechia’s new book, is as fantastic as Capra’s film, yet it is well-researched fact not dramatic fiction. Hammondsport was the center of the Finger Lakes wine industry starting in 1860 and the Taylor family’s wine company grew to be both its largest business and, in due course, one of the largest wine companies in the United States.

Rise and Fall

Pellechia, a writer and journalist who lives in Hammondsport, plots the Taylor family firm’s dramatic rise to national prominence and then its precipitous fall. The book is well documented, as befits the product of a university press, but also very personal. As a resident of Hammondsport, Pellechia must see the consequences of Taylor’s rise and fall all around him every day. And the many in-depth interviews that form the core of the book give us a glimpse into the personal stories the parallel the corporate history.

Wine drinkers in the 1970s could not avoid mention of Taylors and its brands. Wine drinkers today might never notice its remaining products. How did this happen?

The big story is a familiar one. A successful family business expands and for a variety of reasons becomes a publicly traded corporation. The founding family eventually cedes control (does this sound a bit like the Robert Mondavi winery story so far?) and a string of corporate mergers and acquisitions follow. The most valuable business assets of the original company (which included Taylor’s effective distribution network, according to Pellechia) are exploited while the natural foundation of the business (vineyards and wine) deteriorate from lack of investment.

Beyond the Big Story

I find the big story as Pellechia tells it very compelling, but I have to admit that the sub-plots attracted my attention, too, if only because the cast of characters is so interesting. The first big corporation acquire Taylor’s, for example, was the Coca Cola Company, which made the New York company the cornerstone of its Interim Wine Group strategy, which expanded starting from Taylor’s New York base.

Wine didn’t prove to be the synergistic business that Coke thought it would be and they spun off the operation. The Wine Group how thrives as a privately-held company, maker of high volume Franzia wines and a host of others brands including the very hot Cupcake line. It is the second largest wine producer in the U.S., according to Wine Business Monthly, with U.S. sales of 57.5 million cases.

The Seagram Company was the next to take up Taylor’s business, but the Bronfman family soon shifted their focus from drinks to entertainment. Taylor’s was shuffled to Vintners International and then, in much weakened condition, to the Canandaigua Wine Company, which you will be more familiar with by its current name, Constellation Brands. Constellation is the #3 wine producer in the U.S. today , but at its peak a few years ago it was the largest wine company in the world.

Taylor Today

The New York Taylor brand still exists in the Constellation portfolio as a popular line of fortified wines (Taylor Desserts). Looking at that bottle of Taylor Port, it is hard to imagine the rise and fall that it represents for a family, a company and a regional industry and even harder to imagine all the lessons (about wine, family, corporations, economic forces and so on) that it represents.

That’s why it is important to have books like Over a Barrel to make sure that the stories are re-told and the lessons not entirely forgotten. This book connected a lot of dots for me and I recommend it. Come back next weeks for more thoughts about family businesses and their importance in the wine industry.

Why Haven’t Corporations Crushed the Family Wine Business?

April 21, 2015 By in family wine businesses, wine markets, wine research 1 Comment

The featured essay in the current issue of The Economist newspaper focuses on family businesses and makes the case that they are a surprisingly robust feature of post-industrial capitalism.

This struck a note with me because the next two scheduled Wine Economist columns deal with different aspects of family wine businesses.  The Economist survey, which is written by Adrian Wooldridge, would make great background reading to what’s coming up here.

All in the [Wine] Family

The conventional wisdom, as The Economist explains, is that family businesses were a natural fit with early capitalism, when trust was at a premium and finance mainly came from within the family or the firm itself. The principal-agent problem can be mitigated somewhat if principal and agent are part of the same family unit. And family members can be more reliable (and patient) sources of finance than others.

There are problems with family firms, however, which are said to limit their scale, scope and longevity. One problem is generational transitions, which are often difficult (in business as is other aspects of life). The British have a saying that it is “clogs to clogs in three generations” as the dynamism that built the family firm is dissipated and the business eventually shrinks, fails, or falls into the hands of outsiders. You can probably think of examples of this from your own experience. I have heard it said that it is “shirtsleeves to shirtsleeves in three generations” here in the U.S. and it amounts to the same thing.

The conventional wisdom, descended from management guru Alfred Chandler and others, is that the modern company is increasingly rationalized and best run by highly-trained hired professional managers not hereditary top dogs. The irrational, unprofessional family necessarily plays a smaller and smaller role.

Talkin’ ‘Bout My Generations

The Economist makes the point that successful family companies have adapted in many ways. In some regions (Asia is highlighted) and some sectors, they have achieved conventional wisdom-busting dominance.  Under the right circumstances, it seems, family companies more than hold their own again publicly-traded competition.

Would it surprise you if I said that several of The Economist‘s examples of successful family firms come from the wine industry? I hope not, because that’s one of the themes I aim to explore in the next two columns. What wine companies get spotlighted? The first is very old indeed. The family behind Marchesi Antinori has been in the wine business for 26 generations. Giovanni di Piero Antinori entered the Florentine winemakers’s guild in 1385. That’s a lot of family wine history!

The second example is very different. The Economist cites Bernaud Arnault’s family ownership of Möet Hennessy Louis Vuitton. LVMH is a world class luxury goods conglomerate with substantial investment in wine and spirits brands, but I’m not sure if it is as much a multi-generation family company as a closely-held company (especially compared to the Antinori). But the success is still important and, as you will see, privately-held firms play a role in my analysis, too, and stand in general opposition to Chandler’s orthodoxy.

Another informative example of this type is the Rupert family of South Africa. The Ruperts have built a considerable luxury goods empire through their Richemont holding company. Richemont controls many familiar brands including Cartier and Alfred Dunhill. Anton Rupert was an important force in the development of the contemporary South African wine industry and the family is today well-known for its South African fine wine projects including Rupert & Rothschild, Antonij Rupert and La Motte.

Beyond the South Sea Bubble

The last example given is Berry Bros. & Rudd, the London fine wine merchant that has been in business since 1698. The discussion of BB&R focuses on the ability of families to ride out short term crises while keeping an eye on the horizon. Once your business has lived through the South Sea Bubble, seventh generation company chief Simon Berry quips, you are ready for whatever the modern economy throws at you.

Berry’s comment actually understates the situation because all business have to deal with the disruptive consequences of financial crises and macroeconomic cycles. The situation for wine businesses is even worse because wine is fundamentally an agricultural product and so is subject to natural harvest variations as well as boom-bust “cob-web” cycles of high prices, over-planting and decline or collapse. Any wine business — public, private or family — must navigate an unusually treacherous sea.

What’s the key to the success of family wine businesses? And what happens when family firms turn corporate? It’s impossible to generalize because there are so many diverse factors, but I think we can learn something from case studies. Come back next week for the family boom to corporate bust story of the Taylor Wine Company. Cheers!

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This week’s Economist also includes a very short article about investing in wine.

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Creative destruction? The Who ta-ta-ta-talk about their genereation.