Vintage friendship keeps tiny winery in local hands
It’s a crisp, sunny morning on Spring Mountain in Calistoga when Sarah McCrea and Chris Hall, the progeny of two important Napa Valley estates, come together to discuss an event that will forever change both of their families’ lives. The Hall family’s winery, Long Meadow Ranch, has agreed to buy the McCrea family’s winery, Stony Hill Vineyard.
“It’s once in a generation that a vineyard like this becomes available,” says Chris Hall, Long Meadow Ranch’s COO.
Fans of Stony Hill’s old-school Chardonnays will no doubt feel a pang at learning that the beloved institution is no longer solely in the McCreas’ hands. Stony Hill, founded 70 years ago by Sarah McCrea’s grandparents Fred and Eleanor, has long felt like the last holdout of a bygone era of Napa Valley wine: homegrown, humble, family-owned. It is the only major Napa producer known for white wine rather than red. Winemaker Mike Chelini, entering his 45th harvest here, is the longest-tenured winemaker in the valley. Of Napa Valley’s truly iconic wines, Stony Hill Chardonnay is likely the least expensive.
The recently completed transaction gives Long Meadow Ranch a majority stake in Stony Hill’s 160-acre property, brand and inventory. The McCreas retain some equity in the business; President Sarah McCrea is becoming
part of the Long Meadow Ranch executive team, while her father, Peter, joins the advisory board. The parties did not disclose a purchase price.
Still, there’s no question that an acquisition by Long Meadow Ranch is a different sort of acquisition from what Napa has seen lately.
Other family-owned wineries have been handed over to global corporations (Schrader, to Constellation), to absentee investors (Heitz, to Arkansas billionaire Gaylon Lawrence Jr.), or to private equity (Duckhorn, to TSG Consumer Partners). But Stony Hill is passing from one family to another. In fact, it’s passing between friends: Peter McCrea and Ted Hall have been pals since the 1980s.
“We knew it had to be someone operating at a larger scale, but still a family,” says Sarah McCrea of Stony Hill’s suitors. “Our dream was we could find someone who wanted to keep Stony Hill Stony Hill.”
Scale is the crucial term here. While Stony Hill is a tiny, almost anachronistic operation, producing 5,000 cases of wine in a good year, Long Meadow Ranch is a diversified agricultural business with 2,000 acres of farmland in three counties including a cattle ranch, an annual wine production of 75,000 cases, plus olives and olive oil, grass-fed beef and lamb, fruit, vegetables and eggs. It even runs a successful restaurant, Farmstead. It’s familyowned and family-run, but sizable. But why did Stony Hill sell? First, says McCrea, the property badly needs some infrastructure updates, including some major replantings of the vineyard, which the business simply can’t afford. It needs capital investment.
Second, the evolving wholesale wine market in the U.S. is becoming increasingly difficult for small producers like Stony Hill, which have become reliant on personal, direct-to-consumer sales, neglecting the threetier distribution system. “It’s just very hard as a small winery to get attention from a distributor,” says McCrea. Long Meadow Ranch already has that attention.
The third factor is about Stony Hill doing right by its staff. The winery has only 13 employees, many of whom have worked there for more than 30 years. “We’ve never been able to provide retirement benefits like we would have wanted,” McCrea says. Extracting some equity in the business will help Stony Hill send its employees off into healthy retirement.
“A big piece of the puzzle for us is Mike,” she adds, referring to Stony Hill winemaker Mike Chelini.
When Fred McCrea hired Chelini in 1972, Sarah says, he offered him an unusual compensation package: a home on the property, where Chelini still resides, and a promise that Chelini would receive some portion of the proceeds if Stony Hill were ever to sell.
Did Fred and Eleanor McCrea expect Stony Hill to sell during Chelini’s lifetime, then? “My grandparents were very practical people,” Sarah McCrea says. “They would have thought it would sell long ago.”
Today, Chardonnay is the most widely planted grape in California. When Fred and Eleanor arrived on Spring Mountain in 1943, with dreams of growing Chardonnay to rival white Burgundy, planting it seemed like a fool’s errand. They consulted UC Davis Professor Maynard Amerine, who warned them, “We don’t even know anything about Chardonnay,” according to Peter McCrea, their son. At least diversify, Amerine pleaded.
In 1947, the first vines went in at Stony Hill: 8 acres of Riesling, 5 acres of Pinot Blanc and, because Fred was stubborn, 6 acres of Chardonnay. The Pinot Blanc “never made a very good wine,” Peter says, and was eventually ripped out. (Heitz Cellars bottled a McCrea Vineyard Pinot Blanc at one point.) Gewurztraminer was later added. Some of the original Riesling vines are still producing fruit.
A lot has since changed for California Chardonnay, but not much has changed at Stony Hill. “The style of Chardonnay that we make today was the original way we made Chardonnay,” Peter McCrea says. Stony Hill’s hallmarks: The wines are fermented in neutral oak barrels, which don’t impart the toasty vanilla flavors common to newer oak barrels; malolactic fermentation, which gives white wines a buttery richness, is always inhibited.
Visit its crusty barn of a winery today, and you’ll see it’s crowded with ancient, faded barrels, the oldest of which were purchased in 1973. “That winery is still what speaks to people when they visit,” Sarah says. Red wines have never been fermented there.
Even when Chardonnay exploded in popularity, in the 1980s and ’90s, it didn’t do much good for Stony Hill, which refused to jump on the stylistic bandwagon. “There was a time — the era of big, buttery, oaky Chardonnay — when critically we were on the fringe,” Sarah says.
“That kept us from expanding,” Peter adds. Ironically, the qualities that endeared Stony Hill to admirers were the very qualities that held it back as a business. Its old vines struggled, yielding little fruit. Its wines demanded aging, but restaurants weren’t accustomed to selling vintage Chardonnay. Its dependence on its mailing list kept it from developing a healthy wholesale business. As Napa’s cult wines surged to over $500 a bottle, Stony Hill’s commitment to reasonable wine prices left it in the dust.
“There came a time when keeping our prices affordable was hurting our reputation,” Peter McCrea says.
Long Meadow Ranch looked a lot like Stony Hill at one point, and might still today, had it not experienced a major turning point that spurred it to change course from a small, quiet estate to a formidable business of scale. Its founders, Ted and Laddie Hall, came to Napa in 1989, buying a small plot of land in the western mountains above Rutherford. They built a small winery to produce about 4,000 cases of wine from their 16 acres of grapes, mostly Cabernet.
But in 2005, Long Meadow Ranch lost almost everything when an arsonist set fire to the Wines Central warehouse in Vallejo. All the wines they’d ever produced — the 1994 through 2002 vintages — burned to the ground. “I had 18 employees and no revenue,” Ted Hall says. It was an awakening: “I came to the realization that the business model we’d been following wasn’t sufficient scale to survive in the way the wine world was evolving.”
“Either we sell everything and move to Barbados,” Ted Hall recalls saying to his family, “or we decide we’re really going to do this.” In the years since, Long Meadow Ranch has expanded its land holdings to include a cattle ranch in Tomales Bay, a Pinot Noir vineyard in Mendocino County’s Anderson Valley, plus a St. Helena property where they house a tasting room, general store and Farmstead restaurant.
Long Meadow Ranch adapted to a changing wine market in a way that Stony Hill did not, in a way that Stony Hill perhaps could not have. “The day has come,” says Ted Hall. “You can’t exist at the scale that Stony Hill was operating at without having some large source of subsidy.”
How will Long Meadow Ranch change Stony Hill? The Halls certainly plan to implement those much-needed infrastructure improvements, including replanting portions of the vineyard and upgrading the winery equipment (but not, Chris Hall swears, the old barrels). Crucially, they’re taking the vineyard organic, which they expect will increase yields somewhat. A modest price increase could be in store, Ted Hall says, and it’s possible that Stony Hill’s small block of Cabernet Sauvignon could become a component in a Long Meadow Ranch Cabernet.
But as for the big questions that Stony Hill’s die-hard fans will have — will the wine style remain the same? will the 70year-old Riesling vines stay? — the answers, for now, are yes.
Both families hope that Long Meadow Ranch’s business savvy can help usher Stony Hill into a new era, modernizing the winery without relinquishing the old-school traditions that make it special.
For Ted Hall, what’s most important is that properties like Stony Hill remain familyowned. “Vineyards you replant once a generation,” he says. They need to stay in families, who think in terms of generations, rather than in the hands of “a public company, or a private equity firm that’s looking for a short-term payoff.”
He goes on: “The McCreas are demonstrating — our transaction is basically demonstrating — the underlying economic correctness of holding these properties privately, and ideally through families.”