David Sinegal first got the urge to start a winery about eight years ago. But it took some time, and some knowledge about the way the wine business works, to help him find an opportunity that suited him.
“I knew a lot about the buying and selling of wine to consumers,” says Sinegal. “I didn’t know anything about growing wine grapes or frankly about making wine. So I came down to Napa Valley not knowing all the right questions to ask. I was looking for something that made sense from a business perspective, but also from a lifestyle perspective.”
Then Sinegal got married and everything began to fall into place.
“I was very single-mindedly focused that this was what I was choosing to do for the rest of my life, following my passion for wine and my interest in pursuing it as a vocation,” Sinegal says. “I also knew I wanted to start my new family in Napa Valley.”
Sinegal Estate Winery is scheduled to open to the public later this year. It’s located on one of the oldest properties in Napa Valley, a 30-acre parcel on which the first vines were planted in 1881.
“We have just finished our first offering and we have a direct-to-consumer product offering,” says Sinegal, the winery’s founder and general manager. “We’ve extended an offer to people who have joined our mailing list or our club to buy wine for the first time. We’re selling it by what they call in France ‘en primeur,’ which basically means before it’s done. It’s futures.”
The wine business requires patience and Sinegal admits that’s not one of his stronger attributes.
“I revised my pro forma 12 times because I had to keep being honest with myself and look at the numbers more deeply to revise and refine my plan,” Sinegal says. “It was through that process that I developed a bit more patience on how the industry works.”
Plant the seeds
Sinegal may be new to the wine business, but he grew up in a culture of entrepreneurialism. His father, James, is the co-founder and former CEO of the international retail chain Costco.
Sinegal worked in the company for more than 20 years gaining extensive experience in retail, product development, supply chain and brand marketing.
“My father didn’t really push me in any direction,” Sinegal says. “There was never anything explicitly said or suggested that I would follow in his footsteps.”
He says the lessons conveyed about being a leader were delivered in a more subtle way.
“That’s how things work with father/son relationships,” Sinegal says. “It’s not always what they say to you, but what you observe. It came through observation and anecdotal conversation.”
One principle that came through very clearly was the importance of leading with a foundation of core values.
“The presence of a strong set of values or lack thereof is really the cornerstone by which a manager leads an organization. It’s not through tactical planning or more straight-forward business strategy per se. But it’s establishing a core set of principles, values and philosophies and getting people to align around those things. You need to be able to translate those philosophies and values into things that are actionable and relate to the business’s core activities.”
Of course, it also takes money to launch a business, and that caught Sinegal a bit off-guard when he began to plant the seeds for Sinegal Estate.
“There is a joke in the industry that says the way to make a small fortune in the wine business is to start with a large one,” Sinegal says. “The wine business is one where you can find the black, but it requires a tremendous amount of discipline and patience. The investments I made both last year and this year are not going to bear fruit in terms of cash flow for a number of years.”
Develop a plan
Waiting is part of the game when you’re in the wine business, but that’s a foreign concept to Sinegal.
“That is the way a lot of people have pursued marketing and sales in the wine business,” Sinegal says. “They build the winery and create a simple website and then they wait by the phone. They figure they’ve built it and people will come.”
His philosophy is that wine is not the only product he’s selling.
“We’re selling our business as a service and an experience,” Sinegal says. “That means when they visit the property, when they interact with us online, when we provide customer outreach over the phone. We think of our business as a broader set of touch points. That’s what people are paying for and that’s what makes us different.”
The key to creating that experience is breaking it down into pieces that can be executed by your employees.
“It’s taking each one of those steps in the process and having very explicit sets of sequences and ways I want my employees to interact with the customer in those various scenarios,” Sinegal says. “But there is more than enough flexibility extended to the team member so that they can bring their personality to the conversation.”
The winery has five employees right now and Sinegal says the team will grow, but probably not dramatically.
“Outsourcing as it makes sense enables me to stay very lean organizationally rather than developing an army of people that I have to keep busy,” he says.
In the meantime, Sinegal plans to keep busy.
“I’m not just sitting here waiting, hoping somebody buys my wine,” he says. “That is not the way I’ve approached this or the way I pursue business.” ●
How to reach: Sinegal Estate Winery, (707) 244-1187 or www.sinegalestate.com