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KEMMONS WILSON

Charles Kemmons Wilson (January 5, 1913 February 12, 2003) was a businessman who founded the Holiday Inn hotel chain. Called the Father of the Modern Hotel, he revolutionized the travel industry by providing affordable, comfortable, dependable lodging.

Personal life
Kemmons Wilson was born on January 5, 1913, in Osceola (Mississippi County) to Kemmons Wilson, who sold insurance, and Ruby Doll Wilson, a homemaker. He was their only child. His father died when Wilson was nine months old, and his mother took the baby to her hometown of Memphis, Tennessee, where she found work as a dental assistant. Early on, young Kemmons learned the value of money. He watched as his mother Doll struggled to support them, working first as a dental assistant, then as a bookkeeper, never earning more than $125 a month. Young Kemmons started to envision all sorts of innovative ways to earn money, and the seeds of a true entrepreneur were sewn.

The early entrepreneur


Kemmons was actually a savvy entrepreneur at the tender age of six, selling copies of The Saturday Evening Post for a nickel. Then he began selling the Ladies Home Journal when he learned he could earn five cents more per copy and be the district manager, with other children selling the copies for him. This led to more morning and evening paper routes and every other money-making opportunity he could think of. He built and sold rocking chairs, sacked groceries, and by age 14 was working as a delivery boy and soda jerk. But all of his successes were suddenly wiped away by tragedy. While making a delivery for the store, Kemmons was struck by a car. Months of hospitalization diminished all of the income he and his mother relied on so desperately. But the terrible experience and fight back to health may well have strengthened Kemmons for the difficult times still ahead.

Hard times prompt hard decisions


Enter the Great Depression, wiping out the jobs of millions of Americans. Doll, by now not in the best of health, lost her bookkeeping job and had no income to support her son and herself. This desperate situation forced Kemmons to make a decision against his mother's wishes. At age 17 he dropped out of school and began working for a local brokerage. When he asked for a raise but was turned down, he left. Shortly after, Kemmons would strike his first gold.
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He bought a popcorn machine and thought it would be a good idea to sell his favorite snack outside a local movie theater. The theater manager was appalled when he realized that Kemmons was making $40-$50 a week selling sackfuls of popcornmore than the theater made selling tickets!. He stopped the young man from selling any more, but before he could take over the business, Kemmons made sure the manager bought the popcorn machine from him. His popcorn venture over, Kemmons turned to the world of pinball machines, where he met his future wife Dorothy Lee and also began his lifetime interest in flying. Next he entered the movie theater business, ending up with 11 theaters. He opened an ice cream store, then entered the vending machine business. Kemmons worked 15 hours a day and soon earned enough to build a home for his mother. This work ethic would stay with him for life. Doll, too, was a strong guiding force for Kemmons throughout his life. As a single parent, she raised her son very well, according to Kemmons. He felt that he received more love from Doll than many children do from two parents. Kemmons says of his mother, "She taught me that I could do anything that I wanted to do, and she drilled it into my head so hard that I finally decided that I could do anything I wanted to do."

A life-changing discovery
With every new endeavor, Kemmons learned an important lesson that he would take with him to the next adventure. But perhaps no lesson he'd learned had as great an impact on him as the discovery of property value. Using the new house he'd built as collateral, Kemmons borrowed $6,500 from a local bank to purchase a regional jukebox distributorship. That's when he made the life-changing realization that you could build a house, then borrow money on it to pay for other things. So he began buying property. Lots of it. And that was the beginning of his lifelong construction business. From a poor boy selling newspapers during the Depression to a young man who owned more than $4 million worth of Memphis property, Kemmons was already a success storyliving a life that few in this era even dared to dream. But he didn't stop there. He would continue to recognize opportunities wherever they appeared. And he'd take the risks necessary to seize them. On December 2, 1941, Kemmons married his sweetheart, Dorothy. But they had no time to enjoy married life because just five days later Pearl Harbor was attacked. Faced with going off to war, Kemmons feared that Dorothy and his mother Doll would be burdened with all of his debts if anything happened to him, so he sold his possessions. After distinguishing himself as a combat pilot, Kemmons was discharged from the military in 1945 and returned to Memphis to be with his growing family. He and Dorothy had five childrenSpence, Bob, Kem, Betty and Carole.

Career
Wilson initially came up with the idea after a family road trip to Washington, D.C., during which he was disappointed by the quality and consistency provided by the roadside motels of that era. The name Holiday Inn was given to the original hotel by his architect Eddie Bluestein as a joke, in reference to the Bing Crosby movie. He opened the first Holiday Inn motel in Memphis in 1952, He decided on the name Holiday Inn after the popular 1942 Bing Crosby film, which his draftsman had watched the night before submitting his plans. Holiday Inn went international in 1960. Using his movie theater experience, Wilson designed the green-and-gold Holiday Inn marquee along with the Cummings Company of Nashville to be bright, cheerful, and easily visible from the highway. A blinking arrow pointed to the office, while an illuminated sign promoted local gatherings such as civic clubs and proms. It was officially patented as the Great Sign, and when it was replaced with something more modern in 1982, Wilson (who retired from the board in 1979) called it the worst mistake they ever made. In 1957, Wilson franchised the chain as Holiday Inn of America and it grew dramatically, following Wilson's original tenet that the properties should be standardized, clean, predictable, family-friendly and readily accessible to road travelers.

An industry changes
Within ten years, Kemmons had opened his 400th motel and was opening an average of two new motels a week. He then introduced the first computerized reservation systemthe Hollidex System developed for him by IBMwhich enabled travelers to make reservations at any Holiday Inn anywhere with a single phone call. This put considerable financial pressure on traditional hotels and set the standard for its competitors, like Ramada Inns, Quality Inn, Howard Johnson's, and Best Western. By June 1972, when Wilson was featured on the cover of Time magazine, there were over 1,400 Holiday Inn hotels worldwide. Innovations like the company's Holidome indoor pools turned many hotels into roadside resorts. When Kemmons retired from Holiday Inn at age 66 in 1979, the company had annual revenues of more than $1 billion, 1,759 inns in more than 50 countries, and twice as many rooms as its closest competitor. Holiday Inn dominated the industry it had re-created. In 1988, Holiday Corporation was purchased by UK-based Bass PLC, followed by the remaining domestic Holiday Inn hotels in 1990, when founder Wilson sold his interest, after which the hotel group was known as Holiday Inn Worldwide.
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Wilson was the founder of many different kind of companies such as Holiday Inn Records. After selling his shares of Holiday Inn, he formed Wilson World, another hotel chain.

Holiday Inn
Holiday Inn is a brand of hotels, formerly an economy motel chain, forming part of the British InterContinental Hotels Group (IHG). It is one of the world's largest hotel chains with 238,440 bedrooms and 1,301 hotels globally. There are 100 million guest nights each year, globally.

Great Sign
The "Great Sign" is the roadside sign used by Holiday Inn during their original era of expansion in the 1950s-1970s. It consisted of a marquee box; a tower with either red, orange, or blue neon lighting, and a flashing animated neon star at the top. It had 1500 feet of neon tubing and over 500 incandescent light bulbs. It was introduced by Kemmons Wilson when he opened his first motel on August 1, 1952. The signs were extremely large and eye-catching, but were expensive to construct and operate. The sign, including the famous script logo, was originally designed by Memphis, TN artist, James A. Anderson, Sr., a commercial artist who later became known for his oil paintings of Mexico and the American southwest. The manufacturers of the sign were members of the Balton family, whose ancestor D.F. Balton founded Balton & Sons in Memphis in 1875. The story goes that the signs colors were selected because they were favorites of Wilsons mother. The popularity of the sign led to many clones being produced, some of which remain to this day. In 1982, following Wilson's departure, the Holiday Inn board of directors made the decision to phase out the "Great Sign" in favor of a cheaper and less catchy backlit sign that still maintained the original backscript logo (this changed after the second remodel). The decision was not without controversy as it essentially signaled the end of the Wilson era and removed a widely recognized company icon. Wilson was angered about this, saying, "It was the worst mistake they ever made". Sadly, the majority of the signs were sold as scrap metal and recycled. In 2003, in a program of hotel redesign, the company brought back a revamped version of the Great Sign that showed up the company's advertising under the slogan "Relax, it's Holiday Inn." The makeover came with a new prototype hotel that included photography of the sign and a retro-style diner named after founder Kemmons Wilson. Several intact fragments of the famous sign have been restored and relit, mostly the Holiday Inn top section of the sign, and the marquee box. However, in 2006, a complete sign was finally found. The disassembled sign, complete with star, marquee box, and the sign base, was discovered in a backlot in Minnesota . On June 3, 2007, it was purchased by a neon sign restoration expert, in order to restore it to its 1950s glory. It is currently being restored and reassembled, and after completion, it will be displayed at the National Save the Neon Signs

Museum in Minot, North Dakota. Another sign has been preserved at Henry Ford Museum in Dearborn, Michigan.

Brands
Express by Holiday Inn, Park Royal, London.

Holiday Inn This is the most recognizable tier of service. There are two distinct types: high-rise, full-service plaza hotels and low-rise, full-service hotels. The former also included many high-rises with round, central-core construction, instantly recognizable from the 1970s. Both offer a restaurant, pools at most locations, room service, an exercise room, and functional but comfortable rooms. o Holiday Inn Hotel & Suites The properties offer all the amenities and services of a regular Holiday Inn but consist of rooms mixed with suites. o Holiday Inn Resort The proprerties also offer all the amenities and services of a full-service Holiday Inn; resorts are considered a more of an advertising branding than a completely different brand. Most Holiday Inn Resorts are located in high-leisure-tourism markets. Holiday Inn Select These upper-range full-service hotels cater to business travelers. In 2006, it was announced that Holiday Inn Select hotels would be discontinued. Existing hotels may continue to operate under the Holiday Inn Select flag until their existing license expires, however many are converting to Crowne Plaza or regular Holiday Inn hotels, with no further marketing or advertising based around the "Select" moniker. Holiday Inn Sunspree Resorts (officially named SunSpree) The properties are in resort areas with full-service amenities and deluxe service. These are typically very large properties. Holiday Inn Garden Court The properties exist only in Europe and South Africa and are designed to reflect the national culture. Holiday Inn Express The properties are smaller versions of Holiday Inn hotels with fewer amenities and services.

Other
Although originally called "Holiday Inn Crowne Plaza", the Crowne Plaza moniker was split from Holiday Inn in 1994 to form a distinctive brand. During the 1960s and 1970s, there were several Holiday Inn Jr. motels with just 44 to 48 guest rooms located in portables. Locations included Camden, Arkansas, Rantoul, Illinois. Cleveland, Mississippi, Sardis, Mississippi, Farmington, Missouri, Springfield, Tennessee and Columbus, Texas. A traditionally constructed lobby building featured a Holiday Grill restaurant. The Camden location had just 32 rooms while the Rantoul location had 64 rooms. Holiday Inn Magazine was a monthly publication for guests during the 1970s. It featured travel destination and attraction stories in addition to a featured hotel property. In 1996, Holiday Inn hired advertising firm Fallon McElligott, dropping Young & Rubicam after a six-year relationship. Some hotels in the UK are equipped with a Chargebox, a machine for charging devices such as mobile phones, PDAs, iPods, PSPs, and other small, mobile electronics.

Holiday Inn Club Vacations


In the early 1980s, Wilson bought a large plot of land bordering Walt Disney World. On this land he built the Orange Lake Resort. Recently, Orange Lake has bought out other resorts and still plans to acquire more. Because there are now many resorts in the company the Holiday Inn Vacation Club was launched in September 2008. There are currently six Holiday Inn Club Vacations resort properties:

Holiday Inn Club Vacations at Ascutney Mountain Resort, Brownsville, Vermont Holiday Inn Club Vacations at Bay Point Resort, Panama City, Florida Holiday Inn Club Vacations at Lake Geneva Resort, Lake Geneva, Wisconsin Holiday Inn Club Vacations at Orange Lake Resort, Orlando, Florida Holiday Inn Club Vacation at South Beach Resort in Myrtle Beach, South Carolina Holiday Inn Vacation Club at Smoky Mountain Resort, Gatlinburg, Tennessee

Remaining motel properties


As of 2011, only a few motels from the Wilson Era remain. These properties will typically have a full-service hotel and restaurant on the property.

The Baton Rouge Holiday Inn South on 9940 Airline Highway opened in April 1968. The two-story exterior corridor structure centers around a pool and courtyard, a popular method for motels of the peroid. An on-site restaurant provided hungry guests with satisfiable meals. In 1984, the company, going on a capital spending spree, decided to construct a new six-story interior corridor hotel on the location of the motel's office and restaurant. Both the 1960s motel and the modern hotel flourished throughout the 1990s, which was the case for many other motel properties. In 2008, when Holiday Inn began the global relauch, the company asked the hotel to demolish the original portion, or to remodel the structure. The hotel refused to do so, and after the discussions, a deal was made to allow the motel portion in the new chain. Today, it is one of the best preserved Holiday Inn motels that is still with the hotel chain. However, on the hotel's website, it does not mention the original 1960s motel in any form, with the exception of the courtyard pool, also an original to the motel.

Holiday Inn Records

The History
For most people, Holiday Inn is known for a comfortable stay in a hotel. However few people know that once there was a record label named Holiday Inn Records. D. Wayne Foster, Holiday Inns National Contract Sales Manager, visited a club in Monroe, LA owned by a Holiday Inn Franchise developer. This developer invited Foster to visit his nightclub while he was in town. The group performing that night, in 1961, named The Roller Coasters impressed Foster. One of the songs written and performed by the Roller Coasters was called Rim Shot. This song would make a man get up and dance even if he didnt know how, said Foster. The next morning Foster called Kemmons Wilson for an investment opportunity. Wilson was not a stranger to the music business since earlier in his career he ran a jukebox business. This brought him in contact with Sam Phillips, also in Memphis. After a few minutes speaking to Wilson about what Wayne heard last night, Kemmons wired the money to transport the group to Nashville, TN to record the first Holiday Inn Record in the

Owen Bradleys Studio. The song was named Rim Shot, part 1 and Rim Shot, part 2 by The Roller Coasters. Foster designed the label, while Carl E. Webb the attorney for Holiday Inns, produced the business documents for the record company. However, Kemmons left all record decisions to Wayne. Foster and Wilson used Buster Williams Plastic Products, a record pressing plant in Coldwater, Mississippi, to produce records for sale and promotions. Rim Shot charted in New Orleans and Monroe, LA, Birmingham, AL, and Nashville and Memphis, TN. Due to the lack of a major distribution system, Foster and Wilson devised their own methods for distribution. For example, air play was sometimes negotiated with disc jockeys for free hotel stays. The song, Rim Shot, attracted the attention of Randy Woods of Dot Records, Hollywood, CA. He offered to buy the master tape for $40,000.00. Wayne and Kemmons decided to refuse the offer. Foster, had only a small amount of time to devote to producing records for the label with his many other more profitable business adventures. Inevitably, after producing eleven more records, Wayne Foster later decided to leave Holiday Inn Records for his other business interest. This left Wilson needing to find someone to take care of Holiday Inn Records. Kemmons asked his old friend Sam Phillips of Sun Record Co. Since Sam had invested in the Holiday Inn Hotel chain earlier, he later recorded other artist on the Holiday Inn Record label for Kemmons Wilson.

Kemmons Wilson Companies


Although best known as the founder of Holiday Inn, Kemmons Wilson was first a homebuilder. In 1933, at age 20, he built his first home in Memphis, Tennessee. In the ensuing 70 years, Mr. Wilson led the Kemmons Wilson Companies into a wide variety of additional businesses, including hotels, insurance, real estate, fixed base operations (Wilson Air Centers), and private investments. The one constant throughout all those years was and continues to be the Wilsons commitment to high-quality homebuilding.

Even after retirement in the late 1970s, Mr. Wilsons entrepreneurial spirit led him to purchase 375 acres of land just down the road from the site of a planned theme park in Orlando, Florida Walt Disney World. On that land he built Orange Lake Country Club, a development that was different because he decided to build the resort amenities i.e., clubhouse, pool, golf course prior to selling timeshare units. Orange Lake is the largest singlesite timeshare resort in the world. The Kemmons Wilson flair for understanding his customers and building distinctive communities to fit their lifestyles continues today in a company owned and managed by Mr. Wilsons three sons. Their first empty-nester ranch-style community was built in 2002 in Collierville, Tennessee and was immediately successful. The Wilsons understood the need for a convenient location close to employment centers, retail, churches and recreation, but they also knew their customers were looking for a lifestyle that included privacy, maintenance-free ownership, no stairs, quality construction and a real community atmosphere. Every Kemmons Wilson development springs from a philosophy of building strong and lasting customer relationships. Come and see for yourself why our distinctive communities are built to fit your lifestyle.

History
A true pioneer in the hospitality industry and a consummate entrepreneur, Kemmons Wilson left an indelible stamp on the culture of American commerce. As the founder of Holiday Inn, he used his vision and determination to build a company that revolutionized an industry and in the process changed the way we travel, the way we live and the way we do business.

Kemmons Wilson Companies Today


Having owned, operated or partnered in 400 companies since 1948, KWC continues to represent a diverse collection of businesses. With a current focus on the industries of resort timesharing, hospitality, real estate, financial services, aviation and insurance, KWC has also enjoyed success in banking, manufacturing and healthcare as well.

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Key Industries
Kemmons Wilson Companies has found success across a wide range of diverse and unique businesses. the following core industries represented in KWC portfolio: R E S O R T T I M E S H A R I N G We own and operate the world's largest single-site timeshare resort. Orange Lake Resort and Country Club Just a few minutes from Walt Disney World in Orlando, Florida, Orange Lake Resort and Country Club is the world's largest single-site timeshare resort. The award-winning complex is situated on over 1,500 acres and features championship golf courses, tennis facilities and an 80-acre recreational lake, as well as an abundance of activities and amenities one expects from a full-featured resort.

HOSPITALITY

We develop and manage hotel properties across the U.S.

Wilson Hotel Management Company Partnering with successful brands like Holiday Inn and Hampton Inn, Wilson Hotel Management Company (WHMC) is active in both the development and management of properties across the country. WHMC has broadened the scope of traditional hospitality offerings with projects developed for the US Army, St. Jude Childrens Research Hospital and The University of Memphis to provide lodging and other services.

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R E A L E S T A T E We provide maximum value to our customers and clients through our commercial and residential developments. K E M M O N S W I L S O N C O M M U N I T I E S The Memphis areas first builder of ranch-style condominiums for empty nesters now also developing these lifestyle communities in Mississippi and Colorado. T O U R N A M E N T T R A I L S A premier office park in Memphis High Tech Corridor. T H E L E G E N D S Large home sites located in one of Memphis most popular suburbs. R I D G E W O O D A company that has developed more than 18 communities in prime Florida locations.

F I N A N C I A L S E R V I C E S We are focused in the area of investment management by offering software development, distribution and advisory services to various participants within this industry.

Echelon Capital Group


Echelon Capital Group is a distribution firm partnering with asset

managers to help them position and grow their businesses. Cofounded by former Janus Capital Group Executive Vice President and Managing Director of Institutional Asset Management, John Zimmerman and Jack Swift, Managing Director and National Head of Sales for Janus, the Denverbased partnership was launched in September, 2007, with seed capital from Kemmons Wilson Companies. In forming partnerships with its clients, Echelon Capital Group provides support with marketing strategy, product positioning, sales and client service. Although distribution is Echelon's primary focus at present, the strategic plan is to move rapidly to build an asset management firm. With the optimal combination of distribution and investment management, Echelon Capital Group will provide asset managers and clients a broad array of solutions.

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Zephyr Associates, Inc Zephyr Associates, Inc. is a financial software company providing unique analytical tools for the investment management industry. Founded in 1994, Zephyr's StyleADVISOR was the first commercially available software program to implement Nobel Laureate Bill Sharpes unique returns based style analysis. StyleADVISOR is used by investment professionals throughout the world to analyze investment managers, mutual funds, hedge funds, financial markets and investment portfolios. In addition, Zephyr offers AllocationADVISOR, its cutting edge asset allocation software that allows investment professionals to offer their clients total asset allocation solutions.

A V I A T I O N Our fixed base operation is consistently ranked as one of the best in the U.S. Wilson Air Center Opened in late 1996, Wilson Air Center Memphis has reinvented the FBO industry by blending a heritage rich in the hospitality management and a long-standing passion for aviation. The one-of-a-kind facility features one of the world's largest aircraft canopies and offers comprehensive executive services, military and freight handling, aircraft charter, maintenance facilities and services and special customer events. The result is 2008's #1 Rated FBO in the America's for nine consecutive years according to readers of Aviation International News. The Memphis location was also ranked #1 Best U. S. FBO chain in Professional Pilots 2008 survey. Wilson Air Center's other facilities in Charlotte and Houston carry on the same passion for customer service that has made the Memphis facility such a huge success. Wilson Air Center Charlotte opened in February 2005 at Charlotte Douglas International Airport. Wilson Air Center Houston opened in late 2005 at Houston-Hobby Airport.

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I N S U R A N C E We provide commercial insurance, hospitality insurance, private client services and aviation insurance. Kemmons Wilson Insurance Founded in 1952, Kemmons Wilson Insurance Group (KWIG) is an independent broker providing coverage and risk management solutions for:

Commercial Insurance Hospitality Insurance Private Client Services Aviation Insurance KWIG is licensed in all fifty states.

Basketball team owner


In July, 1974, Wilson, along with Isaac Hayes, Al Wilson (singer), Mike Storen and others, bought the Memphis Tams franchise in the American Basketball Association. They changed the team to the Memphis Sounds. They quickly built a strong roster, obtaining players such as Mel Daniels and Rick Mount. The team was the most successful pro basketball team that Memphis ever fielded; it finished fourth in the ABA's Eastern Division, advancing to the 1975 ABA Playoffs before losing the Eastern Division semifinal series four games to one to the eventual 1975 ABA champion Kentucky Colonels. Following the season, the Sounds were sold to a group in Baltimore, Maryland where they moved to become the short-lived Baltimore Claws.

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Legacy
His 1996 autobiography, Half Luck and Half Brains, tells the story of Holiday Inn. Wilson was inducted into the Junior Achievement U.S. Business Hall of Fame in 1982

Death
Kemmons Wilson died in February 12, 2003 at Memphis, Tennessee, U.S.A.

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ROBERT MONDAVI

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Robert Gerald Mondavi (June 18, 1913 May 16, 2008) was a leading California vineyard operator whose technical improvements and marketing strategies brought worldwide recognition for the wines of the Napa Valley in California. From an early period, Mondavi aggressively promoted labeling wines varietally rather than generically. This is now the standard for New World wines. The Robert Mondavi Institute (RMI) for Wine and Food Science at the University of California, Davis opened October 2008 in his honor.

The Mondavi family


Robert Mondavi's parents emigrated from the Marche region of Italy and settled in the Minnesota city of Hibbing. Robert Gerald Mondavi was born in Virginia, Minnesota. From Minnesota the Mondavi family moved to Lodi, California, where he attended Lodi High School. In Lodi, his father, Cesare, established a successful fruit packing business under the name C. Mondavi and Sons, packing and shipping grapes to the east coast primarily for home winemaking. Mondavi graduated from Stanford University in 1937 with a degree in economics and business administration. While at Stanford he was a member of the Phi Sigma Kappa fraternity. In 1943, Mondavi joined his father and brother Peter after the family acquired the Charles Krug Winery located in St. Helena, CA from James Moffitt. The winery had first been established by Charles Krug in 1861. After a feud between himself and his younger brother Peter over the direction of winemaking at Krug, Mondavi was fired from in 1965 and subsequently started his own winery in Oakville, arguably out of spite. Today, the Robert Mondavi Winery is located between Oakville and Rutherford, California (though its corporate headquarters are in nearby St. Helena). In 1966, he founded the Robert Mondavi Winery in the Napa Valley with the goal of producing wines that would rival the finest wines of Europe. Robert Mondavi is the first major winery built in Napa Valley in the post-Prohibition era. Part of Mondavi's original vineyard land included the To Kalon (a Greek term meaning "the beautiful") vineyard originally established by Napa Valley pioneer H.W. Crabb in 1868. The winery bearing Mondavi's name produced high quality wine in the California mission style. In 1967, the woman who would later become Robert Mondavi's second wife, Margrit (Kellenberger) Biever Mondavi, joined the winery. They married in 1980 in Palm Springs, California, almost immediately after his divorce from his first wife, Marjorie Ellen (Declusin) Mondavi.

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Wine history
In 1968 he made a dry oakaged Sauvignon Blanc, an unpopular variety in California at the time, and labeled it "Fum Blanc". The wine was a success and, in time, Fum Blanc became accepted as a synonym for Sauvignon Blanc. Mondavi successfully developed a number of premium wines that earned the respect of connoisseurs and vintners alike. In 1979, he built the Mondavi Woodbridge Winery in Lodi, California developing it into a leader of popularpremium wines. He also entered into a joint venture the Baron Philippe de Rothschild of Chteau Mouton Rothschild to create Opus One Winery, and since the 1990s has set up joint ventures with local partners in Europe, South America and Australia. Interested by his work and his success, in the 1990s Mondavi's story and his wine company became topics for specialists of wine. In the Grand European Jury Wine Tasting of 1997, the Robert Mondavi Chardonnay Reserve was ranked number one.

Robert Mondavi Corporation


In January 1999, Michael Mondavi, the 55-year-old CEO of the Robert Mondavi Corporation (RMC) and son of its founder, Robert Mondavi, announced the reorganization of the company and the layoff of 4 percent of the workforce. RMC had experienced a shortfall in supplying its Woodbridge Chardonnay brand. Disgruntled distributors had begun substituting competing Chardonnay brands on retailers' shelves. Once Woodbridge production levels returned to normal, distributors remained reluctant to carry the brand, further reducing company sales. Subsequently, RMCs stock was downgraded by Wall Street analysts, and its stock price fell nearly 60 percent. At the same time that Michael Mondavi announced the layoffs in January 1999, senior management was completing the process of reconfiguring RMCs future strategies. One camp argued for a return to the original vision, complaining that because RMC had been so busy focusing on launching new brands and pursuing international ventures, it had neglected its core domestic brands, which made up 90 percent of revenues. Another group of managers argued for continued diversification. After all, RMC had introduced three new brands in the previous year: two through global partnerships in Chile and Italy and one domestic brand. Many of the managers in this camp had been involved in orchestrating the development and launch of new brands in the domestic and global markets. Michael Mondavi was caught between the two camps.

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Company Background
Robert Mondavi, the son of a poor Italian immigrant, founded the Robert Mondavi Winery in 1966 at the age of 54, after his bitter departure stemming from a dispute over control of the family-owned Krug Winery. Using personal savings and loans from friends, Mondavi founded his Napa Valley winery with a simple vision: "To do whatever it took to make great wines and to put Napa Valley on the map, right alongside the great winemaking centers of Europe." Wine in the United States was classified into the following categories: table wine (7 to 14 percent in alcohol by volume), sparkling wine/champagne, dessert wine, and other wine products, which include wine coolers and sherry. Table wine represented approximately 66 percent of US volume and was further divided into varietal and non-varietal wine. In order to classify a wine as varietal, the law stated that 75 percent of the juice that went into it had to be from a single grape variety. The current most popular white varietal was Chardonnay. Cabernet Sauvignon and Merlot were the standards in red wines and white Zinfandel in blush wines. Table wine also was categorized into price brackets: Jug wine (under $3 per 750-ml bottle) and premium wine (over $3 per 750-ml bottle). The premium wine segment was further subdivided into popular premium, super premium, and ultra-premium categories. While the jug wine category accounted for 44 percent of the table wine market by volume, it accounted for only 17 percent of the revenue by 1999. Wines also were classified by their appellation, the geographic area in which the grapes were grown. This was because the climate and soil conditions imparted different characteristics and tastes to the wine. The winemaking process provided many opportunities to affect a wines characteristics, increasing the potential for differentiating wine brands. Mondavi set out to be the first in California to produce premium wines that were intended to compete with the premium European brands. At the time, many wine industry observers considered Mondavis venture to be financial suicide. In his 1998 book on the history of the company, Robert Mondavi Harvest of Joy How the Good Life Became a Great Business, Mondavi recalled: We in California had enormous potential; I knew we could become one of the great wine-producing regions of the world. But the American wine industry was still in its infancy, and no one seemed to have the knowledge, the vision, or the guts to reach for the gold, to make wines that could stand proudly next to the very best from France and Italy, Germany, and Spain. Robert Mondavis initial business plan called for building RMCs reputation by producing a limited quantity of super to ultra-premium wines using the most prestigious noble varietal grapes: Cabernet Sauvignon, Pinot Noir, Chardonnay, and Johannesburg Riesling. At the time, these four varietals commanded the highest prices in the marketplace and had the highest profit margin per bottle. In order to generate cash flow to expand the business, RMC planned to produce less expensive wines in high volumes to be sold in the premium market. Mondavi felt that the path to success in producing super to ultra-premium wines began with high quality grapes, so he set out to find the best vineyard in Napa Valley to locate the new RMC. A 12-acre portion of the famous To-Kalon vineyard in Oakville was purchased for the winery location. This vineyard was able to supply RMC with high quality estate-grown Cabernet Sauvignon grapes in its first year of
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operation. The To-Kalon vineyard has provided Cabernet Sauvignon grapes ever since, enabling RMC to create a prestige label. To meet initial production targets, Mondavi began purchasing grapes from other growers around the Napa Valley and convinced many of Krugs top grape suppliers during these early years to sign long-term contracts with RMC. Mondavi then worked closely with each grower to improve grape quality and structured each growers contract so that their compensation was tied to the grape quality and crop yields. Mondavi also was able to convince Krugs top two suppliers to take a financial stake in his new winery. Next, Robert Mondavi set out to build a state-of-the-art winemaking facility that was both functional for making premium wines and unique enough to make a statement about the wines the facility would produce. Mondavi enlisted Cliff May, a highly respected architect, to design an eye-catching Spanish mission-style landmark. Mays design for the winery became the backdrop of every wine label RMC has since produced. In his 1998 book, Mondavi wrote about his design requirements for the new winery: The winery I envisioned was to be a showcase for the most advanced wine-making techniques and equipment in America, if not the world. Aesthetic would be key. In France, the great chateaux were temples of style, tradition, and refinement. This was the lead I wanted to follow. I wanted my winery to have elegance and style, to be a place that would properly highlight our talents and the work going on inside. I also wanted it to be a place that would attract streams of visitors. The winery became a laboratory for developing what were to become some of the California wine industrys best practices in the production of world-class premium wines. Among these best practices were: (1) assembling a team of experts in the areas of viticulture and winemaking, from industry professionals to university professors; (2) developing new technology to permit gentle handling of wine grapes and cold fermentation of white wines; and (3) process innovations, such as steel fermentation tanks, vacuum corking of bottles, and aging of wines in new French oak barrels. These innovative practices have since become standard in the California wine industry. In his book, Mondavi described his pursuit of excellence. From the outset, I wanted my winery to draw inspiration and methods from the traditional Old World chateaux of France and Italy, but I also wanted to become a model of state-of-the-art technology, a pioneer in research and a gathering place for the finest minds in our industry. I wanted our winery to be a haven of creativity, innovation, excitement, and that unbelievable energy you find in a start-up venture when everyone is committed, heart and soul, to a common cause and a common quest. Although Mondavi had managed to slowly improve the quality of RMCs wines throughout the 1970s, he struggled to get his super to ultra-premium RMC wines into reputable five-star restaurants and top wine shops across the country. Mondavi spent lavishly on entertaining influential people within the industry and invited the top wine writers to the RMC for free meals. He then would conduct blind tastings of the RMC wines against reputable French and Italian wines so that the wine writers could taste for themselves what RMC was producing. For over a
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decade, Mondavi traveled extensively throughout the country and abroad as the companys chief salesperson, promoting his vision for RMC and Napa Valley. Often, while dining alone on business trips, Mondavi invited the chefs, sommeliers, wait staff, and restaurateurs to blind taste RMC wines against the restaurants best European wines. One restaurant at a time, Mondavi managed to get his wines on the wine lists of the best five-star restaurants in the United States. By the close of the 1970s, Mondavis persistence began to pay off. Restaurant owners, famous wine connoisseurs, and the press were now very interested in RMCs products. With increasing recognition of and demand for his wine, Mondavi began slowly raising the prices his products until they were selling for as much as comparable French wines. RMC ultimately reached the capacity to produce approximately 500,000 cases annually of premium to ultra-premium wines. These wines were composed of reserves and districtdesignated and varietal wines, such as Cabernet Sauvignon, Pinot Noir, Chardonnay, and Fum Blanc. Approximately 40 percent of the wines produced at RMC were made from estate grown vineyards in the Stag's Leap, Carneros, and Oakville districts of the Napa Valley. The winery progressively expanded the breadth of its wines by releasing ultra-premium reserves and districtdesignated varietal wines in more limited quantities. In the works was a vineyard-designated wine program to produce limited releases of popular varietals, such as a Cabernet Sauvignon from Marjories Block of the To-Kalon Vineyard. These ultra-premium wines were available on an allocation basis, that is, in smaller quantities and at higher prices, than the regular RMC wines. In the 1998 fiscal year, RMC sold 6.8 million cases of wine throughout the United States and in some 90 countries worldwide, grossing $341.1 million in sales. RMC now employed more than 1,000 people. Essentially all of RMCs domestic sales came through its top 16 distributors, which represented approximately 96 percent of 1998 gross revenues. Brokers and agents handled product sales into export markets, and worldwide wine sales in 1998 accounted for eight percent of the companys gross revenues.

Domestic Diversification
Starting in the late 1970s and continuing throughout the 1980s, RMC set out to build a portfolio of premium wine brands to fill various price points and niches in the domestic wine market. Robert Mondavi became very interested in exploring the new appellations that had emerged throughout California and began looking for opportunities to develop new brands from emerging appellations. RMC began to diversify its brand portfolio via acquisition and development of the Woodbridge, Bryon, and Coastal brands, along the way acquiring new vineyard properties in California. RMC financed this expansion through long-term debt. By 1999, RMC owned five winemaking facilities and associated vineyards across California, marketing its wines under seven domestic brands and six international brands. Woodbridge. In 1979, RMC purchased Cherokee Vineyard Winery to expand the production of table wines under the RMC label. RMC remodeled the Cherokee Vineyard Winery and renamed it Woodbridge, after the small town in which the winery was located. Woodbridge now would produce high volume premium wines using the same quality-driven winemaking techniques
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employed by RMC. Over the course of the 1980s, the Robert Mondavi Table Wine brand, previously made at RMC, was transformed into the Woodbridge by Robert Mondavi brand. Wines sold under the Woodbridge label represented approximately 55 percent of company revenue by 1998. The brand had become the second largest premium wine in United States food stores, as measured by AC Neilsen/Adams Business Research. Woodbridge produced six moderately priced varietal wines - Cabernet Sauvignon, Zinfandel, Chardonnay, Sauvignon Blanc, Merlot, and White Zinfandel - which were sold in the popular premium to super-premium wine market segments. RMC projected that Woodbridge sales would continue to grow in the 10 to 15 percent a year range indefinitely. Management believed that acquiring more vineyards to supply the brand would be needed in the future to ensure production goals and to control costs. Bryon. To supply the Woodbridge brand, RMC also started searching for additional sources of grapes in the central California coastal regions in the mid-1980s. In the late 1970s, winemaker Bryon Ken Brown had recognized the tremendous promise of the region's cooler oceaninfluenced climate to grow high quality Pinot Noir and Chardonnay grapes, and he was one of the first to introduce these Rhne-style grape varietals to the appellation. Mondavi was so impressed by the wines Brown was creating that in 1989 he purchased the Byron Winery and 55 acres of vineyards in Santa Barbara and Santa Maria counties. After the purchase, Brown was left in charge of Bryon while RMC injected needed capital and expertise into the winery and vineyard operations. Tim Mondavi, the companys wine maker, was then sent to work closely with Brown to incorporate the winemaking and viticulture techniques developed at RMC into Bryon's operations. The new 80,000-case Bryon Winery was completed in August 1996. RMC also expanded the vineyard holdings at Bryon, bringing the total acres in production up to 1,420 acre by 1998, by replanting the estate vineyards with high-density plantings. In addition to the Bryon brand, RMC planned to release a new brand produced out of the Bryon winery under the label "Io." Io was to be a limited-production Rhne-style wine, consisting of a unique blend of Syrah, Mourvedre, and Grenache grapes. It was to be priced at $40 a bottle and sold exclusively to RMC's top accounts. Coastal. The Robert Mondavi Coastal wines were developed in May 1994 to fill a niche in the premium to super-premium market below Bryons wines. Wines under the Coastal label retailed from $8 to $12 and featured Cabernet Sauvignon, Merlot, Pinot Noir, Zinfandel, Chardonnay, and Sauvignon Blanc varietal wines. In the face of opposition from others in the wine industry, RMC intended to differentiate the California coastal regions by creating a new Central Coast appellation. As part of this effort, it emphasized the Coastal origin of source grapes used in the wines and featured a sea-meets-land motif as a backdrop to the brand's labels. RMC did not maintain an exclusive winery for the production of the Coastal brand, but instead contracted with Golden State Vintners of Soledad to crush the grapes, while the wines were made and bottled out of the RMC and Woodbridge wineries. Several larger competitors in the premium market were also known to be developing vineyards and wineries in the coastal regions, and RMC management foresaw stiff competition ahead for its Coastal brand. In order to maintain retail shelf space, RMC sought to lower its production costs and to increase the volume of wine produced as the brand entered nationwide distribution. A major constraint to the brands growth was grape supply, as most grapes for the Coastal brand were sourced from 25 growers, accounting for approximately 2,500 acres of vineyard production. RMC owned an additional 1,200 acres of land in the Salinas Valley, of which only 35 percent were planted. RMC sought
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additional vineyard acquisitions in the region so that 80 percent of grape sourcing for the brand in the future would come from company-owned vineyards. Sales for this brand were expected to surpass one million cases by 1999, a full year ahead of projections. La Famiglia di Robert Mondavi. The La Famiglia di Robert Mondavi brand was introduced in 1995 and was devoted to producing Italian-style varietal wines in California for the ultrapremium market. After decades of growing traditional French varietal grapes in California, RMC decided to experiment by growing Italian varietals such as Sangiovese, Barbera, and Pinot Grigio in California. Management felt that the Napa Valley might be suited for cultivating these Italian varietals and was especially interested in making wines from Sangiovese grapes, because Sangiovese was one of the most popular Italian varietal wines in Italy. RMC produced small quantities of seven wines under the La Famiglia di Robert Mondavi brand. This brand featured Barbera, Sangiovese, and Pinot Grigio varietals. Wines under the La Famiglia label were produced at the former Oakville Vichon Winery, which RMC renamed the La Famiglia di Robert Mondavi Winery.

Global Partnerships

RMC also began pursuing global ventures and looking for suitable partners in France, Italy, and Chile. By the mid-1990s, the company had entered into three multi-national partnerships, one in Napa with the Rothschild family, one in Chile with the Chadwick family and the other in Italy with the Marchesi de' Frescobaldi family. These partnerships yielded several new global brands, including Opus One, Caliterra, and Lucente. Opus One. RMC took the initial steps to expand its brand portfolio when it entered into a joint partnership with Baron Philippe de Rothschild, owner of the famed Chteau Mouton-Rothschild in Bordeaux, to form Opus One. The Opus One partnership began one morning in 1979, when the two men were dining in the Barons bedroom in Bordeaux, France. Work to create the first vintages of Opus One wine commenced immediately with RMC selling 35 acres of the companys best vineyards from the To-Kalon block. The partnership then purchased two more vineyards across Highway 29 from RMC, where the Opus One Winery would eventually be built. Chteau Mouton-Rothschilds winemaker, Lucien Sionnea, and Timothy Mondavi began working together at RMC to make the first vintage of Opus One. Over the next five years, the two winemakers worked closely to blend the two different cultural styles and techniques of winemaking. Ten years in the making, the Opus One Winery was completed in
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1991. The winery featured a state-of-the-art barrel room where temperature and humidity were kept at precise specifications using an electronic climate control system. Opus One, a Bordeauxstyle Cabernet Sauvignon, consisted of a blend of 80 percent Cabernet Sauvignon mixed with Cabernet Franc and Merlot. Production was limited to 30,000 cases per year, and bottles of the wine sold for between $90 and $100 in more than 65 world markets. Due to its limited production, demand for Opus One exceeded supply. Distributors and individual customers had to order well in advance of the wine's release. Opus One thus became America's first ultra-premium wine. By the mid-1980s, it had made the transition into the French, English, German, and Swiss markets. Not only was this a first for American wines, but also an opportunity for RMC to showcase its other wines in those markets. Chadwick Family. RMC recognized that Chile possessed wine regions with the same favorable climatic and soil characteristics of those found in the Napa Valley. In 1996, RMC entered into a fifty-fifty joint partnership with Eduardo Chadwick and his family to form the Via Caliterra S.A. joint venture, which would now be responsible for producing the Caliterra brand of premium Chilean wines. Under the terms of the partnership, the Caliterra wines would be produced at the Via Errazuriz Winery until a new winemaking facility could be built. Caliterra wine intended for the United States market would be shipped in bulk to be finished at the Woodbridge facility, whereas wine intended for the global markets would be produced and finished in the Via Errazuriz Winery. The terms of the Via Caliterra partnership also provided RMC with exclusive rights to distribute the Via Errazuriz brand of wines in the United States. After forming Via Caliterra, each partner provided suffcient capital to expand the Caliterra operations and to purchase the 1,000 hectare La Arboleda Estate in Chiles Colchagua Valley. Via Caliterra planned to source additional grape supplies from independent growers located throughout the Colchagua Valleys various appellations. RMC anticipated that the new Caliterra Winery would be completed and in full production by 1999 harvest. The Via Caliterra partnership produced four varietal wines under the Caliterra label Cabernet Sauvignon, Merlot, Sauvignon Blanc, Chardonnay and two reserve varietals. These wines were priced between $7 and $10 a bottle. Despite a slowdown of imported wines to the United States market in the late 1990s, the Caliterra brand was one of the fastest-growing import brands. Worldwide sales of Caliterra in 1997 reached an estimated 300,000 cases. Italy's Marchesi de' Frescobaldi In 1996, RMC formed a partnership with Marchesi de' Frescobaldi family, a highly respected Italian viticulture family with three generations of winemaking experience, to produce Italian style wines in the Tuscany region, using traditional Italian varietals. The partnership purchased the 11-hectare Solaria Estate Vineyard in the Montalcino region of Tuscany. The partnership produced approximately 20,000 case a year of ultra-premium wines under the Luce and Lucente labels in Italy. Luce was first introduced to the international wine markets in June 1997, and this Tuscany-style blend of Merlot and Sangiovese varietals recently was listed as one of the worlds top 40 red wines by Wine Spectator magazine. Lucente was later released in 1998. Both wines were priced in the $55 to $60 price range and were available in select United States and European markets.

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Going Public
By the early 1990s RMC began to develop severe financial constraints brought on by the combination of expansion, increased competition, and phylloxera infestation. Several of the company's Napa County vineyards were dying from phylloxera, forcing the company to replant many of its vineyards at a time when the companys heavy debt load was already high from the acquisitions of the 1980s. Further compounding problems for the company, there were now some 200 new wineries in the Napa Valley, many of which were now producing premium to ultrapremium wines that directly competed with RMC brands. A growing number of these wineries in the premium market were owned by multinational corporations that could afford to replant phylloxera-infested vineyards and to pay higher prices for grape supplies until the replanted vineyards returned to production. Smaller family-owned wine operations were at a financial disadvantage against larger, fully integrated and in many cases conglomerate-owned firms, and were faced with either selling off assets or borrowing heavily to finance existing operations. Due to dwindling capital resources, Robert Mondavi felt that RMC wouldnt be in the position to take advantage of future opportunities and that it risked being forced aside in the premium market by larger competitors - unless additional capital could be obtained. After five years of careful study of other family-controlled public companies, Robert Mondavi, with the help of the investment banking firm Goldman Sachs, devised a deal to raise enough money for RMC to continue expansion while maintaining family control. An initial public offering (IPO) for the company was structured with two classes of stock: a Class A common stock to be issued to Mondavi family members, and a Class B common stock to be offered to the public. Class A shares carried ten votes per share, and Class B one vote per share. Providing Mondavi family members retained their shares, the family could retain control over RMC's destiny. On June 10, 1993, RMC issued 3.7 million shares at $13.50 a share and began trading on the NASDAQ exchange under the symbol MOND. The IPO raised approximately $49.95 million, giving the company a market capitalization of $213.3 million. Within days, the stock was trading at around $8 a share and six months later at $6.50 a share, wiping away over half of the companys value and half of the Mondavi familys fortune. Investors and analysts alike had difficulty valuing RMC, due to a lack of information on the company and the wine industry as a whole. At the time, only two other publicly traded wine companies existed, both of which were in the low-end jug wine market segment and not in the premium wine segments. In addition, the California industry was facing large expenditures and uncertainty related to the phylloxera infestation.

Industry and Competition


The United States wine industry was composed of approximately 1,500 wineries. The industry, however, was highly concentrated, with the top 10 wineries accounting for 70 percent (by volume) of US production, according to the 1999 Adams Wine Handbook. Wine was produced in every state except Alaska. California dominated the US wine industry in many that it had over
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800 wineries and accounted for more than 90 percent of the wine produced in and exported by the United States. Northwest wineries (Washington, Oregon, and Idaho) were composed of approximately 200 wineries and were developing an export presence, as well as an excellent reputation for quality wines. Wine was sold through a three-tier distribution system. Wineries (the first tier) or importers sold wine to wholesalers (the second tier), who provided legal fulfillment of wine products to local retail businesses (the third tier) within a certain state. Wine was a controlled substance, and laws in each state differed regarding how wine could be sold. Typically, wine passed through each tier of the distribution system, making direct shipping to retailers or selling wine through the Internet difficult or impossible in most states. The third tier of the distribution system consisted of retail and non-retail outlets. Supermarkets, convenience stores, club stores, mail order and Internet retailers, specialty stores, and wine clubs accounted for 78 percent of total sales volume. Supermarkets alone accounted for 52 percent of retail wine sales and were very influential in wine distribution. They were dominant in food and drink retailing and made one-stop shopping an appealing concept for consumers. Furthermore, supermarkets had considerable bargaining leverage with wholesalers. The role of specialty stores in wine distribution diminished due to the increasing power of supermarkets. Specialty stores' share of retail wine sales was about 30 percent in 1998. Nevertheless, specialty stores were not likely to disappear soon because they provided superior customer service and their sales staff had extensive knowledge of wines. They also carried specialty brands and limited production labels, attracting wine connoisseurs and enthusiasts. Non-retail outlets accounted for the remaining 22 percent of wine volume in the United States, according to Adams. The Wine Institute estimated that 1999 United States wine market retail sales were $18 billion, growing from $11.7 billion in 1990. The United States wine market ranked third in the world behind France and Italy. However, the United States ranked thirtieth in the world in per capita consumption of wine in 1999. The greatest concentration of table wine consumers was in the 35 to 55-age bracket. About the same proportion of men and women consumed wine. While all income levels consumed wine, higher income was associated with greater wine consumption. In 1998, adults in families earning over $75,000 annually represented 18.7 percent of the population and 31.4 percent of the domestic table wine consumption. Export markets. In terms of international markets, wine was produced commercially in over 60 countries with 23 percent (by volume) of the wine produced in the world being exported to international markets according to Wines & Vines. Leading wine producers included the Old World wineries in France, Italy, and Spain, which were also the leading exporters. New World producers, such as the United States , Australia, Chile, Argentina, and South Africa had been making both production and export inroads globally over the past few decades. For example, France, Italy, and Spain all export more than 25 percent of the wine they produced, Australia exported over 40 percent, and Chile over 80 percent of its production. Many observers attributed these export numbers to the small size of the home markets. Until the mid 1990s, the United States wine market remained largely a domestic industry, with some imports from France, Italy, and Spain competing with United States wineries. By 1999,
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however, imports had risen to 20 percent of the United States market share, which was seven percentage points above where it was in 1995, according to Wine Business Monthly. Tremendous inroads had been made by Australian and Chilean wines, in particular, into the United States market. For example, from 1995 to 1999, Argentina increased the value of its exports to the United States by 243 percent and Chile by 152 percent. Since 1995, the unfavorable balance of trade for wine in the United States has increased by 78 percent according to the 2000 World Vineyard, Grape, and Wine Report. United States wine exports also grew consistently, from a base of $137 million in 1990 to $548 million in 1999, according to the United States Department of Commerce. Also, the United States industry enjoyed the highest rate of increased wine exports (19.3 percent) in 1998 among the major wine producing countries according to the 2000 World Vineyard, Grape, and Wine Report. While this export growth was impressive, United States wineries also face increasing threats to their domestic market share due to globalization in the wine industry. Wines & Vines reported in 1999 that the United States had only 4.2 percent (by volume) of the world export wine market, while producing 8 percent (by volume) of the wine produced in the world. The United States wine industry exported only 13 percent of the wine it produced, while other countries had more intensely developed their export markets. Tariffs and trade barriers played a pivotal role in obstructing United States wineries' access to various country markets. Ten United States wineries accounted for more than 89 percent of exports. Nearly 50 percent of United States wineries exported their products. The leading United States exporter by volume was E&J Gallo, accounting for about half of United States exports and more than four times the volume of its nearest export competitor. E&J Gallo exports approximately 13 percent of its total production. United States wineries typically exported only a small percentage of their production. Wente Vineyards was a notable exception. Wente made exports a cornerstone of its long-term strategy, as 60 percent of its annual case sales were from 147 country markets. Competition. The nature of competition within the United States wine market varied by wine category. While the basis of competition in the lower segments of the wine market (jug to premium) was primarily driven by price, retail shelf space, and brand imaging, competition at the higher segments (super-premium and above) was driven more by quality and brand image. Wine producers in the jug to premium market segments relied heavily on the retail chains for most of their sales. Retail chains demanded that these wine producers be able to produce an adequate supply of the most popular varietal wines within specified price ranges (price points) because consumers of these wines tended to be price sensitive. In addition, the lower segment wines required sufficient consumer demand (depletion rates) for retail chains. Although many retail chains carried super-premium to ultra-premium wines, obtaining shelf space was of lesser concern for producer of these brands. Typically, the higher-end segment wines were made in smaller quantities, and demand often exceeded supply for acclaimed wines. Wholesalers could increase their markups on top-selling super-premium to ultra-premium wines by moving these wines through alternate distribution channels, such as restaurants, hotels, and specialty wine shops. For the top super-premium to ultra-premium brands, wholesalers were often willing to enter into future contracts with producers to buy the most popular wines before they were released, thereby generating advance
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revenue for the producers. Producers also were able to sell their best super-premium to ultrapremium wines through direct sales at the winery or through mail order wine clubs that were allowed by law in selected states. Building brand awareness to drive sales for the lower market segment wines was typically done through traditional advertising campaigns and retail promotions; whereas, for the higher market segment wines, brand awareness was built more through 'pull' marketing strategies. Rarely did producers resort to television or mass print advertising to promote their super-premium to ultrapremium brands. Instead, these producers built awareness through wine competitions, public relations campaigns, direct marketing, and wine tourism. Most super-premium to ultra-premium wine producers entered their best wines into local, state, national, and international wine competitions, with some going far as holding back portions of their best inventory to be released later at prestigious competitions. Medal winners often were featured in magazine articles, newspapers, and wine enthusiast newsletters. These write-ups helped to build the publics awareness for the best super-premium to ultra-premium wines each year. Historically, the jug wine segment was almost completely dominated both in the United States and global markets by Gallo, a family-owned wine business since 1933. However, during the 1980s, large alcoholic beverage companies, such as Canandaigua, The Wine Group, and Brown Forman, were able to enter and compete with Gallo in the jug market segment. Although Gallo was still the single largest wine producer in the world, making up approximately 45 percent of California wine sales, Gallo had failed to capitalize on changes in consumer demand toward a preference for premium wines. In recent years Gallo, like many of the other jug wine producers, sought to enter the premium wine market, choosing to develop and launch new Gallo brands from 2,300 acres of prime vineyards in Sonoma County acquired to supply the new brands. Besides the alcoholic beverage companies, several large food and beverage conglomerates, like Nestl, Pillsbury, Suntory, PepsiCo, and Coca Cola, entered the premium market by acquiring premium to ultra-premium wineries in the 1970s. However, during the 1980s, many of these food and beverage companies have divested their wine holdings, choosing instead to focus on their core businesses. The beneficiaries of these divestitures were the wine and alcoholic beverage companies that continued to build their portfolios of wine brands. Wine industry analysts expected further consolidation in the wine industry as large wine and alcoholic beverage companies continued to acquire smaller winery operations to gain access to premium and ultrapremium brands. The super-premium to ultra-premium market was highly fragmented, composed of hundreds of individual, small to large wine-producing operations that were all competing to produce the most acclaimed wines each year. Although larger producers held advantages in scale and capital, the smaller wineries were able to compete by consistently producing high quality wines in limited quantities that gained critical acclaim by wine enthusiasts. Smaller wine producers, however, were at a disadvantage when trying to compete for grape sources against larger better-financed competitors, such as Beringer, RMC, Kendall-Jackson, Sebastian Vineyards, UDV NA Wines, Gallo, and Canandaigua. Many of these rival firms owned portfolios of brands, invested in wine making facilities and vineyards across California and abroad, and produced wines across the price spectrum of the premium, super-premium, and ultra-premium market segments.
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Seeking Consensus
Michael Mondavi remained confident that future releases of small lot ultra-premium wines from RMC could help to build the company's overall image of prestige and quality. RMC had spent $50 million during the early 1990s replanting the RMC estate vineyards with high-density plantings in the traditional French planting style. RMC hoped to showcase these higher quality grapes with special small lot, vineyard-designated wines once those vineyards came into production after 1999. Throughout the mid-1990s, RMC had struggled to secure an adequate supply of grapes to meet domestic production targets. RMC had been unable to purchase sufficient quantities of Chardonnay grapes for its Woodbridge brand during the 1996 harvest, and management foresaw a revenue shortfall in fiscal year 1998 (the year in which its 1996 vintage Chardonnay was scheduled for release). Due to poor growing conditions and phylloxera infestation in 1996, many other Chardonnay wine producers suffered the same grape supply problems. RMC had been especially hard hit, as only 12 percent of its grape sources came from company-owned vineyards. RMC purchased the remaining supply from some 300 independent growers across the State of California, increasing the company's susceptibility to fluctuations in price, quantity, and quality of grapes on the open market. However, RMC was currently at capacity and required an estimated $27 million remodeling to add capacity for small lot ultra-premium vineyard and district-designated wines. With additional production capacity, RMC could produce more high-end reserve and vineyard-designated wines at higher price points. At the same time, Mondavi had spent considerable time in 1998 traveling to Chile and Europe promoting RMC's new brands. Mondavi believed the formation of global joint ventures would become an integral part of RMC's future business and a way for the company to continue to innovate and develop worldclass wines. He wanted RMC to become a truly global company by growing, producing, and selling wines in all the best wine-growing regions in the world.

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Legacy
Robert Mondavi was selected as the Decanter "Man of the Year" in 1989. His autobiography Harvests of Joy was published in 1998. In 2003, Mondavi expressed regret and criticized his sons for the business strategy that emphasized the inexpensive Mondavi lines, Coastal and Woodbridge, over the premium wines, allowing the company name to lose its association with fine wine it held in the past. He said, "We've got to get our image back, and that's going to take time." In the 2004 documentary film Mondovino, the Mondavi family featured prominently, in close application to its theme of globalization. At the time, the Mondavis had recently acquired the Italian "cult wine" Ornellaia winery, Tenuta Dell'Ornellaia. On December 22, 2004, Constellation Brands acquired the Mondavi winery for nearly US$1.36 billion in cash and assumption of debt. Following the sale of the company, Mondavi traveled the world as an ambassador for wine. Due to the contributions of Robert and Margrit Mondavi, the Mondavi Center at UC Davis in Davis, California for performing arts was named after him. The two were founders and major benefactors behind COPIA: The American Center for Wine, Food and the Arts, which opened November, 2001 in the city of Napa, California. Robert and Margrit were also founding supporters of the restoration of the 19th-century Napa Valley Opera House and the Oxbow School, a new art school in Napa that provides grants and instruction to art students in their junior year of high school. They have contributed to the restoration of the Lincoln Theatre in Yountville, California, and have supported the Cantor Arts Center at Stanford University in Palo Alto, California.

Mr. Mondavi was inducted into the Junior Achievement U.S. Business Hall of Fame in 1991. On December 5, 2007, California Governor Arnold Schwarzenegger and First Lady Maria Shriver inducted Mondavi into the California Hall of Fame, located at The California Museum for History, Women and the Arts.

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Robert Mondavi Institute for wine and food science

The Gift
In 2001, Robert Mondavi, renowned California wine producer, made a personal gift of $25 million to establish the Robert Mondavi Institute for Wine and Food Science (RMI) within the College of Agricultural and Environmental Sciences, opening a new era of opportunity for UC Davis in its widely acclaimed wine and food programs. Robert Mondavi and his wife, Margrit Biever Mondavi, also made a donation of $10 million to name the campus Center for the Performing Arts. The Mondavi gift is the largest private contribution in UC Davis history. "UC Davis has been a true partner in building the international reputation of the California wine industry," said Robert Mondavi. "California wines are equal to the world's best in quality, diversity and excitement. We are now leading the way with UC Davis graduates at the helm of many of our finest wineries, Robert Mondavi Winery included. We are greatly honored to support UC Davis with new facilities that ensure its position as the world's leading educational center for viticulture, enology and food science."

The Vision
UC Davis has a rich history of excellence in the wine and food sciences. For more than 125 years, the University of California has maintained active research and education programs in viticulture, enology and food science. No other academic institution can boast the rare combination of the premier College of Agricultural and Environmental Sciences, a large agricultural sector renowned for its fine wine and diverse food production, and the uniqueness of California cuisine. The Robert Mondavi Institute allows the campus to move two departments -- Viticulture and Enology, and Food Science and Technology -- under one roof in a new, state-of-the-art facility. These departments, recognized as the best in the world in their respective areas of scholarship, will be linked with other disciplines investigating the role of healthy and safe foods in the quality of life. The institute will be the gateway between UC Davis and a broad community of scientists, engineers, entrepreneurs, policymakers, industry professionals and technologists engaged in all dimensions of wine- and food science-related activities. The RMI will be the global innovator in university-based wine and food sciences research, education and outreach.

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Vintner's Hall of Fame


Robert Mondavi was inducted into the Culinary Institute of America's Vintner's Hall of Fame in 2007. The election was based upon ballots from seventy wine journalists. The decision for their election of Mondavi is for contributions to the wine industry of California during his life-time. Inductions with Robert Mondavi on March 7, 2007 included Agoston Haraszthy, Andre Tchelistcheff, Georges de Latour, Charles Krug, Gustave Niebaum, Brother Timothy, Maynard Amerine, Barbara Tropp, and Harold Olmo.

Death
Robert Mondavi died at his Yountville home on May 16, 2008 at the age of 94.

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References

Kemmons Wilson

http://en.wikipedia.org/wiki/Kemmons_Wilson http://www.kwilson.com/ http://en.wikipedia.org/wiki/Holiday_Inn http://www.businessweek.com/bwdaily/dnflash/oct2004/nf2004111_3044_db078.htm www.kwcommunities.com/ http://www.wilsonhotels.com/

Robert mondavi

www.robertmondavi.com/ http://en.wikipedia.org/wiki/Robert_Mondavi www.napavintners.com/winery/robert-mondavi-winery/ http://www.nndb.com/people/653/000022587/

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Personal evaluation

Kemmons Wilson

Kemmons Wilson, who died on Wednesday aged 90, founded the Holiday Inn chain of budget hotels after a depressing experience on a family holiday in 1951. Wilson, a Memphis businessman who had already become a multi-millionaire from property deals, a chain of popcorn machines and a jukebox franchise, had taken his family on holiday in Washington D C, but was disappointed with the quality of the motels - particularly with their practice of charging two dollars extra for each of his five children. "My six-dollar room became 16; my eight-dollar room became 18," he recalled. "I told my wife, Dorothy, that wasn't fair. I didn't take many vacations, but as I took this one, I realised how many families there were taking vacations and how they needed a nice place they could stay." Wilson vowed to build a chain of motels where children would stay free in their parents' bedroom, beds would be big, and a pool would keep everyone occupied. On his return to Memphis, he asked a draughtsman to draw up a blueprint. While he was working, the draughtsman happened to be watching an old Bing Crosby film, Holiday Inn, and added the words to his sketch. Wilson decided to adopt the name for his new venture. The first Holiday Inn opened on Summer Avenue, Memphis, in August 1952. In 1954 Wilson started franchising the concept. Within 15 years the business had become the largest hotel chain in the world, with 300,000 rooms across 1,700 more or less "identikit" inns; they generated more than $1 billion in revenues, and employed 150,000 people. Britain's first Holiday Inn opened in Leicester in 1971. Elton John even mentioned them in a song: "And you ain't seen nothing till you've been in a motel, baby, like the Holiday Inn." Holiday Inns transformed hotel standards as other budget chains were forced to compete, though Wilson always insisted that Holiday Inns should remain ahead of the game. It became the first chain to use a computerized reservations system; the first to advertise on television; the first to introduce a guest frequency programmed; and the first to take reservations on the internet. Wilson had a huge appetite for hard work: one of his "Twenty Tips for Success read: "Only work half a day. It doesn't matter which half you work - the first 12 hours or the second 12 hours."

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An only child, Charles Kemmons Wilson was born at Osceola, Arkansas, on January 5 1913. His father died when Kemmons was nine months old, and the family moved to Memphis, where his mother got a job as a dental assistant. During the Depression, she lost her job and Wilson was forced to leave school to find work. With a $50 loan from a friend, he bought a popcorn machine, setting it up in a cinema lobby. By 1933 he had made $1,700, and bought a house for himself and his mother. He then mortgaged the property to buy the local Wurlitzer jukebox franchise. Later Wilson expanded into renting pinball machines, housebuilding and property speculation, buying up bargain properties by taking repossessed buildings from banks with just five per cent down. Not all his exploits were successful: he persuaded Sam Phillips, the owner of Sun Record Studios, to sell his rights to Elvis Presley to RCA - for $35,000. Wilson, who served as a combat pilot in the Second World War, retired in 1979, by which time his business interests had diversified into candy and nacho chips; making road signs; hotel furniture manufacturing; corporate air travel; and banking. In 1989 the Holiday Inns hotel chain was sold to Bass for $2.23 billion. Kemmons Wilson married Dorothy Lee in 1941; they had three sons and two daughters. In 1971 Dorothy Wilson was named American Mother of the Year; she died in 2001.

Robert Mondavi

Robert Mondavi, the California vintner who set in motion the rebirth of the Napa Valley wine industry and, to a generation of Americans, championed the idea that fine wine was an integral part of the good life, died on May 16, 2008. The Robert Mondavi Winery, hailed as an architectural masterpiece when it was built in 1966, set the style and tone for scores of wineries in later years and is still the valleys most popular tourist attraction. Under Mr. Mondavi, the winery grew into a $500 million-a-year business as it introduced to the United States European winemaking techniques like the use of French oak aging barrels and stainless-steel fermentation tanks. An Italian immigrants son, Bob Mondavi, as he chose to be called, battled puritanical tradition, a hidebound wine industry, a skeptical public and even opposition within his own family as he fashioned himself into a symbol of Americas mid-century affluence and cultural coming of age.

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