David Coffaro Vineyard and Winery Winemaker's Diary

Week 9
February 28, 1999 to March 6, 1999 

March 1, 1999

We're going into the panic mode. This weekend is the Russian River Wine Road Barrel Tasting. We've been here for 20 years and each year this event has gotten bigger. We've heard that most of the wineries sell a great deal of futures this weekend. Therefore, we feel that we should be participating because, as you know, we are trying to concentrate on only selling wine before it is bottled, which obviously is considered as futures. Since we start selling our wine before it's even made to keep our prices low (our 1998's were first offered in April of 1998) unfortunately, we are again going to be limited in the amount of estate wines we can offer. 

The panic is because we are making our final decisions on what food we will be serving, what wine we will be serving, and of course - the most important - what videos we will be showing. We are getting rumors from the Press Democrat that they will have a picture of me laying on a barrel in this Thursday's edition of the newspaper, which I am not looking forward to seeing, but hopefully they will be mentioning that we will be flashing scenes from "Woodstock" on our big screen again this year. We hope that many of you will be able to make this event and look forward to seeing you. 

March 2, 1999 

Pat suggested that we talk about our experience of working together today. She said it would be very boring and
could be said in a sentence, so I am going to prove her wrong and make it as long as possible. The most important
thing that I can say is that Pat and I got along without any disagreements, and any time you can get along with your
spouse doing anything related to business, it is a big accomplishment for that day! 

As you may know, we have had 2500 cases of wine to label since July due to the fact that our labeling company had
made numerous errors in printing the labels, which meant that we had to stop the mobile bottling line from accomplishing its task of labeling all our cases at the time of bottling. We had about 350 cases remaining to be labeled
as of this morning, so Pat and I worked about 2 hours and labeled around 75 cases in that time. Two hours doesn't
sound like much, but it's a lot of work lifting and moving all those boxes of bottles around and it took a big chunk out
of the day. As a matter of fact, Pat has developed an ugly-looking callus on her thumb that must be removed. I am
suggesting suing the labeling company for medical expenses, but I am just a loud-mouthed curmudgeon and will
probably never do anything about it. It feels good to think it though. But I do feel a great sense of accomplishment
since Pat has been labeling from day to day just to keep up with the remaining cases to be shipped or picked up, and
at least I helped out for a short period of time today. This will get us at least through the next week. Where is Brendan
when we need him? 

March 3, 1999

I made my usual biweekly run to Costco, a little ahead of schedule this time. After all, I was just there last Monday! But of course, the big Russian River Wine Road Barrel Tasting is coming up this weekend, and Pat has decided to make her potato soup that was very popular last year. We understand that since it is a free event, we are not obligated to have any food. But since last year it only cost us a few hundred dollars to serve about a thousand people, we have decided to do it again this year. The next two days will be consumed almost entirely with preparations for the event. Tomorrow I am going to put up some shelving that I bought at Costco (for lab storage and more organization in the winery) and then move some barrels around to get ready to draw off at least 12 cases of wine from the barrels into bottles which we will be pouring this weekend. On Friday I will spend most of the day actually drawing off the wine and then topping off the barrels. Also both tomorrow and Friday we will have to spend a lot of time preparing the food for the event. We will be cutting up 100 lbs(!) of potatoes and preparing the stock for this soup. We are hoping to post the diary tomorrow night, but if we don't, I think you'll understand why. 

March 4, 1999

Since I have received several email messages from my customers, regarding the Ravenswood initial public offering, I decided to spend two hours last night reading the prospectus. I barely got into it. Even though I am a slow reader, I think it would take almost anyone a week to get through the information. This is what I have always enjoyed about reading a prospectus: that there is so much information, that probably no one can take it all in unless they want to devote their life to it. The things that got me were that I am still confused about why a company as successful as Ravenswood would like to go public, except that of course all the principals are going to be instant millionaires.  But if you read the prospectus, what you find out is that their whole business has to be exposed to the public. Almost everything they do.  All the costs and most of the past history.  The company owns 14 acres of vineyards, which would produce about 5,000 cases, and they are going to continue to rely upon growers that are going to be selling grapes to them at considerably higher prices in the next year or two. If you take a look at it, their average price of sales for a bottle of wine for the last year and a half has been about $8 a bottle. Yes, that is right. In other words, I have spent well over $20 a bottle for Ravenswood wines and Iím sure you have too. But as I have said before, most wineries sell wine to a broker (as they say in their prospectus) and then the broker marks it up, then the wholesaler marks it up, and then the retailer marks it up. And with Ravenswood, instead of a 3-tier system, we have a 4-tier system. The use of proceeds still confuses me.  I thought originally maybe that the principals wanted to sell out, but they are going to use the money to pay off debt and finish the construction of a new production facility. Iím confused about why they would want to continue to predominantly sell to just a broker. As a stockholder, I would think they would want to put the money into more of the retail aspect of the wine industry. As far as I know, they do not advertise their wine, nor do they promote their tasting room. If they sold more wine at retail or of course at least cut out one of the four tiers, they could make a lot more money for their stockholders. I am obviously just rambling here and I am sure I will get some more input from whomever I am reaching tonight, and I do plan on reading more of the prospectus to try to answer some of my own questions. I like their wine, so I still might want to invest in the offering. 

Dave 

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