|The Palazzo Antinori in Florence, Italy.|
Imagine a family business that has passed from one generation to the next twenty-six times, surviving everything from the scourge of Bubonic plague, to the invasion of Napoleon, two world wars, and even the birth and death of the wine cooler.
The Wall Street Journal’s deputy bureau chief for Southern Europe, Gabriel Kahn, profiled such an enterprise in a fascinating story this weekend: “For more than six centuries, the Antinori family has managed one of the most delicate feats in business: passing on a company from one generation to the next,” he writes.
Succession planning is one of the obstacles that trips up so many family businesses, leading the vast majority to break up, fail, or pass out of family hands by the third generation. Italy’s storied Antinori family, which now owns wineries in Tuscany, Napa Valley, Hungary, and Chile, is a remarkable exception.
“This is not textbook management,” notes Harvard’s John A. Davis in the article. “Some of its planning, some of it is just luck.” Even so, the success of the Antinoris has made them into a fascinating case study for other vintners, including Napa Valley’s H. William Harlan II, the founder of Harlan Estate.
In the course of reporting The House of Mondavi, I had the pleasure of interviewing Piero Antinori, his daughter Allegra, and their long-time managing director, Renzo Cottarella, at the sprawling annual trade fair of the Italian wine industry, VinItaly, which is held in Verona each year.
Since then, the Antinoris have since partnered with Washington State’s Ted Baseler, CEO of Chateau Ste. Michelle vineyard, to purchase one of the great wineries of the Napa Valley, Stag’s Leap Wine Cellars.
I was particularly struck by Piero Antinori’s account in the Journal piece of the tough economics of the wine business and why wineries weren’t necessarily suited to be part of publicly traded companies, an issue that emerged in my reporting of the forced sale of the Robert Mondavi Corp.
In the mid-1980s, Piero sold a large minority stake in his business to Britain’s Whitbread PLC, a publicly traded British company which made most of its money from breweries. It was an unhappy marriage on both sides and Whitbread became frustrated with its investment in Antinori.
“Our investments are so slow in coming,” Piero said. “You put a vine in the ground and the first cash flow you see is a decade later.” Publicly listed companies, he adds, “just don’t have the stomach for it.”
Tell that to the Sands brothers at Constellation, a publicly traded company which in the past few years, after a spate of global acquisitions, has become the world’s biggest wine producer.
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