Cigars before Wine
Robert Mondavi, Jr.of the winery Mondavisdecided to stake out his own territory
Ever wish you could just have a successful business, rather than build one? Then listen to Robert Mondavi Jr. Instead of joining the $370 million, family-controlled Robert Mondavi Corp., where his father is CEO, the 27-year-old wants to be a struggling entrepreneur. Granted, it's not easy for the winery heir, but he's trying. Why? Because he's convinced the best way to learn to run a big businesswhich he intends to do eventuallyis to start a smaller one. His Napa Cigar Co. is in its third year, with just over $1 million in annual revenues. Mondavi talked about his prospects with reporter Hilary Rosenberg.
Q: Why couldn't you learn how to run a company at the winery?
A: Learning how to run a company is different from learning to manage within a companyespecially a family-owned one. Considering that you're always the boss's son, it's difficult from either a positive or a negative stance to get a fair shake. It's also nice to go out on your own and develop your own ideas and own style.
Q: Are there entrepreneurs in your family who influenced you?
A: My father was one of the two pioneers of the Mondavi winery, and my mother's family is also very entrepreneurial. They're involved in umpteen companies in Panamatelecommunications, Internet, construction, heavy-equipment rental. But my real inspiration was the new package designs and new wines coming across the table when I was growing up. There were always new products, new ideas.
Q: Was Napa your first business?
A: As a student I had a small business. I bought about a dozen mountain bikes and gave tours through the vineyards. I'd have a nice picnic for the bikers and be done in the afternoon so I could water-ski.
Q: What interested you in cigars?
A: I was duck hunting with my Dad on my 15th birthday. It was 5:30 a.m. Cold. We had a little sip of Scotch from the flask. Then, he lit up a cigar. I felt bad the rest of the day, but it was such a great memory. And ever since then, we've been smoking cigars. It was a way that we communicated. Later, I started making humidors and thought I would start a business selling them. But my father said, "You're making the razor. What you really want to be doing is producing the blade."
Q: Where did you get your startup capital?
A: Initially, I had some money from the biking venture and from working at the winery and at an alcohol distributor. After I came up with a business plan, I got a bank line of crediton my own. But my Dad started laughing when he saw the interest rate. He said, "You got the loan. I'll co-sign so you can get a better rate." I borrowed $250,000.
Q: Did you take full advantage of your name in marketing and distributing your product?
A: People saw that the young Mondavi was in the cigar industry, and they wanted to do business with me. Some alcohol distributors who carried the Mondavi portfolio wanted to carry cigars. I hadn't heard of anyone doing that, so I held off, which was a big mistake. Fortunately, [Napa Cigars Vice-President] Christian [Grimshaw] said it was a great distribution outlet.
Q: Why didn't you at least use the family name in the cigar company's name?
A: We wanted to try to build the company through our own merits. Now that we have, we've redesigned our packaging to incorporate the Mondavi name, for increased marketability. On the script of the cigar band, it's R. Mondavi Jr. Napa.
Q: Will you be frustrated at Mondavi, which is such a big company?
A: Yes. But I won't go in and take up a vice-presidency. I want to start at different levels and learn about the Robert Mondavi Corp. There's no way that, sitting in the chair that I'm in now and having dinner with my Dad a couple times a week, I can know what goes on in that company.
This article was originally published in the August 16, 1999 print edition of Business Week's Frontier. To subscribe, please see our subscription policy.