Management and marketing at Beringer Vineyards and Wine World, Inc. : oral history transcript / 1990 online

161




University of California Berkeley
REGIONAL ORAL HISTORY OFFICE



Regional Oral History Office University of California

The Bancroft Library Berkeley, California



The Wine Spectator California Winemen Oral History Series



Michael Moone

MANAGEMENT AND MARKETING AT
BERINGER VINEYARDS AND WINE WORLD, INC.



With an Introduction by
Charles A. Carpy



An Interview Conducted by

Lisa Jacobson

in 1989



Copyright (c) 1990 by The Regents of the University of California



Since 1954 the Regional Oral History Office has been interviewing
leading participants in or well -placed witnesses to major events in the
development of Northern California, the West, and the Nation. Oral history is
a modern research technique involving an interviewee and an informed
interviewer in spontaneous conversation. The taped record is transcribed,
lightly edited for continuity and clarity, and reviewed by the interviewee.
The resulting manuscript is typed in final form, indexed, bound with
photographs and illustrative materials, and placed in The Bancroft Library at
the University of California, Berkeley, and other research collections for
scholarly use. Because it is primary material, oral history is not intended
to present the final, verified, or complete narrative of events. It is a
spoken account, offered by the interviewee in response to questioning, and as
such it is reflective, partisan, deeply involved, and irreplaceable.



************************************

All uses of this manuscript are covered by a legal
agreement between the University of California and
Michael Moone dated November 3, 1989. The manuscript is
thereby made available for research purposes . All
literary rights in the manuscript, including the right
to publish, are reserved to The Bancroft Library of the
University of California, Berkeley. No part of the
manuscript may be quoted for publication without the
written permission of the Director of The Bancroft
Library of the University of California, Berkeley.

Requests for permission to quote for publication
should be addressed to the Regional Oral History Office,
486 Library, University of California, Berkeley 94720,
and should include identification of the specific
passages to be quoted, anticipated use of the passages,
and identification of the user. The legal agreement
with Michael Moone requires that he be notified of the
request and allowed thirty days in which to respond.

It is recommended that this oral history be cited as
follows :

Michael Moone, "Management and Marketing
at Beringer Vineyards and Wine World,
Inc.," an oral history conducted in 1989
by Lisa Jacobson, Regional Oral History
Office, The Bancroft Library, University
of California, Berkeley, 1990.



Copy no.




MICHAEL MOONE
1990



Cataloging Information

MOONE, E. Michael [b. 1940] Wine Marketer

Management and Marketing at Beringer Vineyards and Wine World. Inc.. 1990,
viii, 109 pp.

Career as salesman with Procter & Gamble; Beringer Vineyards and its umbrella
company, Wine World, Inc., 1973-1989: marketing in the 1970s, Beringer
President Richard Maher, sales and pricing, Los Hermanos label, revitalization
of Beringer under Nestle, acquisitions of Souverain Cellars, Asti winery,
Estrella River Winery, developing premium brands, export markets; wine
industry organizations.

Introduction by Charles A. Carpy, Freemark Abbey Winery

Interviewed in 1989 by Lisa Jacobson for the Wine Spectator California Winemen
Series. The Regional Oral History Office, The Bancroft Library, University of
California, Berkeley.



TABLE OF CONTENTS - E. Michael Moone



PREFACE i

INTRODUCTION, by Charles A. Carpy v

INTERVIEW HISTORY vii

BRIEF BIOGRAPHY viii

I EARLY YEARS AND EDUCATION !
Growing Up in Southern California

University Education 2

An Early Role Model 3

Development of Interest in Wine 4

Wine Collecting 5

Fraternity Life: Preparation for the World of Business 7

Interest in Cooking g

II CAREER AT PROCTER & GAMBLE 9

Sales Responsibilities 9

Recruiting Activities 10

Traits of a Good Salesperson n

Affirmative Action 13

First Contact with Richard Maher 14

III BERINGER VINEYARDS AND WINE WORLD, INC., 1973-1989 15

Joining the Company 15

Early Responsibilities and Training 16

Key Personnel 17

Marketing Challenges in the Early Seventies 20

Richard Maher 's Contributions as President 21

Pricing Philosophy 22

Building National Sales 22

Relationship with Distributors 23

Qualities Desired in Salespeople 25

Sale of Fontana Candida 27

Reshaping Product Lines 29

IV LOS HERMANOS BRAND 31

Airline Package 31

Boon to Distribution of Beringer Wines 32

Introduction of Light Wines 33

Declining Jug Wine Sales 35



V BERINGER VINEYARDS 37

Renaissance of the Beringer Label 37

Market Research Studies 38

Rebuilding the Winery 39

Beringer Vinemakers 39

Vineyard Acquisition and Management 41

Beringer White Zinfandel 42

Streamlining Beringer 's Wine Portfolio 44

Jim Tonjum's Contributions to Premium Wine Marketing 47

Wine Competitions 48

Advertising and Public Relations Budgets 48

VI NAPA RIDGE 50

Carving a Niche Among the Fighting Varietals 50

Strategies for Competing in the Fighting Varietals Market 52

Broadening the Consumer Base through Fighting Varietals 53

VII C & B VINTAGE CELLARS 55

The C & B Portfolio 55

Focus on Expensive Brands 58

Impact of a Strong Dollar 58

Shipping 59

VIII ACQUISITIONS AND PREMIUM BRAND DEVELOPMENT 61

Maison Deutz Partnership 61

Acquisition of Souverain Cellars 63

Acquisition of Asti Winery 65

Chateau Souverain Brand 66

Acquisition of Estrella River Winery 67

Meridian Brand 68

Other Vineyard Purchases 69

Strategy for Developing Premium Brands 70

Foreign Investment and Long-term Business Orientations 71

Ownership Changes 72

IX EXPORTS 74

European Market 74

Japanese Market 75

Trade Barrier Issues in Canada and Japan 76

Wine Marketing and Distribution in Japan 77

Wine Marketing and Distribution in Europe 78

Targeted Export Assistance Program 79

Developing Brand Recognition in Foreign Markets 80

Japanese Distribution Companies 81

Benefits of Import Experience 81

Focus on High Image Wines 81



X CULINARY ARTS PROGRAM 83

Scholarships for Chefs 83

Hudson House Renovation 84

Chateau Souverain Restaurant 85

Madeleine Kamman's School for American Chefs 85

Matching Food and Vine 86

XI INDUSTRY ACTIVITIES AND CONCERNS 89

Market Development Committee, Wine Institute 89

Formation of National Wine Coalition 91

Expansion of Premium Wine Business 91

Advertising Wine as an Everyday Beverage 92

Health Issues and AWARE 93

Wine and the American Heritage 94

National Wine Coalition 95

Importance of Industry Affairs to Beringer's Success 95

Definition of a Winery Committee 96

Wine Train 97

Grower-Vintner Relations 98

Napa Valley Vintners 100

Wine Industry's Economic Contributions 101

Wine and Spirits Wholesalers' Association 103

Wine Industry Culture 103

TAPE GUIDE 105

INDEX 1 06



PREFACE



The California wine industry oral history series, a project of the
Regional Oral History Office, was initiated in 1969 through the action
and with the financing of the Wine Advisory Board, a state marketing
order organization which ceased operation in 1975. In 1983 it was
reinstituted as The Wine Spectator California Winemen Oral History Series
with donations from The Wine Spectator Scholarship Foundation. The
selection of those to be interviewed is made by a committee consisting of
James D. Hart, director of The Bancroft Library, University of
California, Berkeley; John A. De Luca, president of the Wine Institute,
the statewide winery organization; Maynard A. Amerine, Emeritus Professor
of Viticulture and Enology, University of California, Davis; the current
chairman of the board of directors of the Wine Institute; Ruth Teiser,
series project director; and Marvin R. Shanken, trustee of The Wine
Spectator Scholarship Foundation.

The purpose of the series is to record and preserve information on
California grape growing and wine making that has existed only in the
memories of wine men. In some cases their recollections go back to the
early years of this century, before Prohibition. These recollections are
of particular value because the Prohibition period saw the disruption of
not only the industry itself but also the orderly recording and
preservation of records of its activities. Little has been written about
the industry from late in the last century until Repeal. There is a real
paucity of information on the Prohibition years (1920-1933), although
some commercial wine making did continue under supervision of the
Prohibition Department. The material in this series on that period, as
well as the discussion of the remarkable development of the wine industry
in subsequent years (as yet treated analytically in few writings) will be
of aid to historians. Of particular value is the fact that frequently
several individuals have discussed the same subjects and events or
expressed opinions on the same ideas, each from his own point of view.

Research underlying the interviews has been conducted principally in
the University libraries at Berkeley and Davis, the California State
Library, and in the library of the Wine Institute, which has made its
collection of in many cases unique materials readily available for the
purpose .



ii



The Regional Oral History Office was established to tape record
autobiographical interviews with persons who have contributed
significantly to recent California history. The office is headed by
Willa K. Baum and is under the administrative supervision of James D.
Hart, the director of The Bancroft Library.



Ruth Teiser
Project Director

The Wine Spectator California Winemen
Oral History Series

June 1990

Regional Oral History Office
486 The Bancroft Library
University of California, Berkeley



iii



CALIFORNIA WINE INDUSTRY INTERVIEWS

Interviews Completed by 1990
Leon D. Adams, Revitalizing the California Wine Industry. 1974

Leon D. Adams, California Wine Industry Affairs: Recollections and Opinions.
1990

Maynard A. Amerine, The University of California and the State's Wine
Industry. 1971

Maynard A. Amerine, Wine Bibliographies and Taste Perception Studies. 1988

Philo Biane, Wine Making in Southern California and Recollections of Fruit
Industries . Inc. . 1972

John B. Cella, The Cella Family in the California Wine Industry. 1986

Charles Crawford, Recollections of a Career with the Gallo Winery and the
Development of the California Wine Industry. 1942-1989. 1990

Burke H. Critchfield, Carl F. Wente , and Andrew G. Frericks , The California
Wine Industry During the Depression. 1972

William V. Cruess, A Half Century of Food and Wine Technology. 1967

Jack and Jamie Peterman Davies, Rebuilding Schramsberg: The Creation of a
California Champagne House. 1990

William A. Dieppe, Almaden is Mv Life. 1985

Alfred Fromm, Marketing California Wine and Brandy. 1984

Louis Gomberg, Analytical Perspectives on the California Wine Industry. 1935-
1990. 1990

Joseph E. Heitz, Creating a Winery in the Napa Valley. 1986

Maynard A. Joslyn, A Technologist Views the California Wine Industry. 1974

Amandus N. Kasimatis, A Career in California Viticulture. 1988

Morris Katz, Paul Masson Winery Operations and Management. 1944-1988. 1990

Legh F. Knowles, Jr., Beaulieu Vineyards from Family to Corporate Ownership.
1990

Horace 0. Lanza and Harry Baccigaluppi , California Grape Products and Other
Wine Enterprises. 1971

Louis M. Martini and Louis P. Martini, Wine Making in the Napa Valley. 1973
Louis P. Martini, A Family Winery and the California Wine Industry. 1984



iv



Eleanor McCrea, Stony Hill Vineyards: The Creation of a Napa Valley Estate
Winery. 1990

Otto E. Meyer, California Premium Wines and Brandy. 1973

Norbert C. Mirassou and Edmund A. Mirassou, The Evolution of a Santa Clara
Valley Winery. 1986

Peter Mondavi, Advances in Technology and Production at Charles Krug Winery.
1946-1988. 1990

Robert Mondavi, Creativity in the Wine Industry. 1985

Michael Moone , Management and Marketing at Beringer Vineyards and Wine World.
Inc.. 1990

Myron S. Nightingale, Making Wine in California. 1944-1987. 1988
Harold P. Olmo, Plant Genetics and New Grape Varieties. 1976

Cornelius Ough, Researches of an Enologist. University of California. Davis.
1950-1990. 1990

Antonio Perelli-Minetti, A Life in Wine Making. 1975

Louis A. Petri, The Petri Family in the Wine Industry. 1971

Jefferson E. Peyser, The Law and the California Wine Industry. 1974

Lucius Powers, The Fresno Area and the California Wine Industry. 1974

Victor Repetto and Sydney J. Block, Perspectives on California Wines. 1976

Edmund A. Rossi, Italian Swiss Colony and the Wine Industry. 1971

Edmund A. Rossi, Jr., Italian Swiss Colony. 1949-1989: Recollections of a
Third-Generation California Winemaker. 1990

Arpaxat Setrakian, A. Setrakian. a Leader of the San Joaquin Valley Grape
Industry. 1977

Elie Skofis, California Wine and Brandy Maker. 1988

Andre Tchelistcheff , Grapes. Wine, and Ecology. 1983

Brother Timothy, The Christian Brothers as Wine Makers. 1974

Ernest A. Wente, Wine Making in the Livermore Valley. 1971

Albert J. Winkler, Viticultural Research at UC Davis (1921-1971). 1973



INTRODUCTION - E. Michael Moone



Dame fortune is a fickle one at best, yet here in Napa Valley she let
her richness shine on an industry, community, and company in turning
over the leadership of Beringer Vineyards and the umbrella company of
Wine World Estates to E. Michael "Mike" Moone in 1984. Mike's vision
of the future of the wine industry, as well as the position of his
company in it, set the course for the last six years which I'm sure
will be a quality force in the future. Mike has created an enviably
successful, geographically diverse company which has three first-rate
winemaking facilities: Beringer in St. Helena, Chateau Souverain in
Geyserville, and Meridian in Paso Robles, all supported by some of the
finest vineyards attainable. Quality is exemplified not only in the
physical assets of the wineries, but maybe more importantly in the
caliber of the employees. There is no question Mike's enthusiasm and
demonstrated success permeates the company with that same desire to
excel, and excel they do. Over three million cases are now produced
by these wineries, with top-notch wines in every varietal and price
category.

I first met Mike after he became president of Beringer. Our
association grew naturally through winery activities, and because our
home is adjacent to the Beringer property. Mike is a gracious host.
Various functions at the Rhine House and the newly renovated Hudson
House provided the opportunity to meet his charming wife, Valerie, and
his two lovely daughters, Erika and Erin. Erika, who entered Stanford
on a swimming scholarship earned during her senior year in high
school, will be a junior this year. Erin will be attending the
University of California, Santa Barbara, this fall. Mike possesses a
quick wit, never fails to have a new story or two, and when not at
work can usually be found pursuing his passion* -golf .

As would be expected, Mike is very active in industry
organizations. He has served on the executive committee and board of
directors of the Wine Institute, is currently a vice chairman, and
scheduled to be chairman in June 1994. In addition, he has served on
various boards and committees of the Napa Valley Vintners and the
California Wine Commission. Mike and the Beringer Winery provide
wonderful support to our community and its schools . They have
furnished a substantial investment in computers to help develop an
integrated computer literacy program that starts down in the early



vi



grades, and just recently made a substantial contribution to an
affordable homes program. This ability to share the rewards of
success makes Mike in every good sense truly a good neighbor.



Charles A. Carpy
Freemark Abbey Winery



July 6, 1990

St. Helena, California



vii



INTERVIEW HISTORY - E. Michael Moone



E. Michael Moone was interviewed in three sessions at his
Beringer Vineyards office to document his career at Beringer Vineyards
and the umbrella company of Wine World, Inc. An active participant in
wine industry affairs and a skilled wine marketer, Mr. Moone has been
a wine lover from age 18 and a serious collector since his late
twenties. Following an 11-year career with Procter & Gamble,
Mr. Moone joined Beringer Vineyards in 1973, merging his talents in
sales and marketing with his passion for wine. Ten years later he
assumed the helm of Beringer Vineyards and has been credited with
managing one of the best run wineries in California

President since 1984, Mr. Moone has overseen Beringer Vineyards
and the wine portfolio of Wine World's other operating divisions. All
are holdings of Nestle, the Swiss multinational which first bought
into the California wine industry when it acquired Beringer in 1972.

The interview begins with a career overview, followed by a
discussion of each operating division. Los Hermanos represents the
jug wine label, Napa Ridge is the line of negotiant varietals , and
C fit B Vintage Cellars is the import division. Beringer Vineyards,
Chateau Souverain, Maison Champagne Deutz, and Meridian complete the
line of premium brands. Commenting on brand development, geographic
diversification, and vineyard investments, Mr. Moone elaborates a
strategy for success in the long-term business of wine. He also
discusses imports and exports, industry politics, and Beringer
Vineyards' extensive culinary arts program.

Mr. Moone carefully reviewed his manuscript. Photographs were
graciously provided by Beringer 's public affairs staff.



Lisa Jacobson
Interviewer -Editor



August 1990

Regional Oral History Office

486 The Bancroft Library

University of California at Berkeley



Room 486 The Bancroft Library



viii



Berkeley, California 94720



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I EARLY YEARS AND EDUCATION
[Interview 1: 24 July 1989 ]## 1

Growing Up in Southern California



Jacobson:



Moone :



Let's start at the very beginning, with when and where you were
born.



A good idea.
June 2, 1940.



I was born in Santa Monica, California, on
A long time ago. [laughs]



Jacobson: Did you grow up in Santa Monica?

Moone: Yes, I was pretty much raised in L. A. We moved from Santa

Monica to Westchester to Palos Verdes. Really, the formative
years- -from eighth grade onwere in Falos Verdes. So it was
pretty much a beach environment, as you can imagine.

Jacobson: I've been to Palos Verdes, and it's beautiful.

Moone: Yes. It's really a pretty area. We lived in a couple of areas
in Palos Verdes, one in Rolling Hills inside the gated area
that was real nice. Then we lived in the grove area, a place
called Via la Selva - a Spanish name that means "by the woods."
It's appropriately named.

I finished up school there, and there wasn't a high school
in Palos Verdes at the time. So I went to El Segundo High
School. Typically, the kids from Palos Verdes went to Redondo
High, but it was filled up, so we went to El Segundo- -which was



1 This symbol (#//) indicates that a tape or segment of a tape has begun
or ended. For a guide to the tapes, see page 105.



a great experience. El Segundo had a bunch of younger kids
coming up, so we were kind of a bridge group; there were two
hundred of us. For two years the kids from Palos Verdes went
to El Segundo High School. Then Palos Verdes had another bunch
of kids of high school age, and they went to Narbon High School
for a couple of years. Then Palos Verdes High School came
along. Now there are three high schools up there.

Jacobson: Did you take a bus to get to school?

Moone: We drove; we had a friend who drove. In those days it didn't
take too long; it was only about twenty minutes. Traffic
wasn't what it is today. Today it would take you an hour
[laughs]. Oh, it's still only probably about thirty minutes.
But it was only a twenty minute drive in those days, and
sometimes we made it in fifteen [laughs].

I was a pretty typical high school kid, I think. I had
pretty broad interests, was sports -minded, chased girls (never
caught any) .

Jacobson: I see all those sports trophies up there behind your desk -
football from UCLA.



University Education



Moone: I went on to the University of Pennsylvania out of El Segundo.
I had a semi -jock and semi -need scholarship. I was an only
child, and my dad was a pilot for American Airlines. My dad
went to UCLA, so I was kind of red-hot for UCLA. But I got
this interest through an old girlfriend's father and decided to
try an Ivy League school. It was a good experience. It was
really the first time that I was confronted with making a tough
decision, and that was to stay and do something you didn't
like, but to sort of gut it out. Or to say, "This isn't for
me," and go to UCLA. I made that decision, and it was a very
good one, I think. It wasn't an easy one.

I went back and finished up at UCLA. There I majored in
"fraternity" as a Fiji, and school was kind of secondary. I
had a great time in college. I graduated in the top 80 percent
of my class [laughs]. I was in the old business school; I was
in the next -to -the -last class to finish up in the UCLA business
school as an undergrad. Then it became a graduate program.



Jacobson: Was the marketing program at UCLA a relatively new one when you
started?

Moone: No, the school had been long established. I'd say the strength
of the school was originally accounting- -and I say that as a
differentiation from finance. Then it moved to computers. I
think the computer sciences as they relate to business was
probably the strength when I was there. Marketing was a solid
second, and actually all the disciplines within the business
majors are within a difference of two or three courses for your
maj or .



An Early Role Model



Moone: I had always wanted sales, and had always wanted marketing, and
was very strong in that direction from when I was thirteen or
fourteen years old. I was influenced heavily by a neighbor,
Mar Nelson, who was the sales manager of a company, and I just
loved everything he did [laughs]. I wanted to do what he did;
you know, you set role models for yourself.

Jacobson: Did you have jobs in high school that encouraged you to develop
that interest?



Moone: No. I had jobs from him that were kind of different. As an
example, I took care of his boat. He had a fifty- foot yacht,
and I had a key to it and total use of it. 1 did all the work
on it: I recaulked the teak decks and did all the painting and
all the hull work. The fun part about that was that I knew
absolutely nothing about it. He'd just say, "You're smart,
kid; you go figure it out and send me the bill if you need
anything. "

Then I shingled his house. He had a really nice house,
and he said, "Shingle the roof for me." I went down to the
library and found out how to shingle and bought all the
shingles. That was kind of his style, letting people do things
and becoming responsible for them. That was a really great
lesson in life that I learned from him. And I was motivated
because of the way he comported himself, I think, in a lot of
respects.

Jacobson: Was he a person you could go to for advice if you needed it?



Moone: I didn't. It was just a fun association. He became almost a

friend. He liked what I did, and I liked the things he did, so
it was a neat thing. He was a good neighbor.

I also worked at his company in the summer , which was
called Barksdale Valves. Then I worked in the oil fields later
on as a roustabout.



Development of Interest in Wine



Moone: During the year I concentrated on high school sports - and

surfing, partying; pretty much the beach environment. In fact,
that's where I really began to drink good wine, in high school.
I had a friend, Randy Johnson, who drank good wines, and that's