Professional Documents
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IJWBR
22,1
From co-operation to competition:
market transformation among
elite Napa Valley wine producers
6 Ian M. Taplin
Department of Sociology, Wake Forest University, Winston-Salem,
North Carolina, USA
Abstract
Purpose – The purpose of this paper is to argue that cooperative behavior by key actors is often
crucial for collective organizational learning to occur and new markets to become established. Such
cooperation is gradually replaced by competition as network interactions become formalized
following the codification of knowledge and the growth of a collective identity.
Design/methodology/approach – Using detailed ethnographic studies from a broad sample, this
paper uses key informants who played a role in creating and sustaining a viable market for a high
status good.
Findings – The sharing of tacit knowledge complements technical skills for key industry actors and
facilitates collective organizational learning in ways that expedite the emergence of a high status
sector. Once knowledge is codified as the sector gains legitimacy, there is less need for informal
structured interactions as vital conduits of knowledge sharing.
Originality/value – This paper shows how knowledge sharing via cooperative relationship
underlies competitive market formation and provides firms with requisite quality enhancements
necessary for status attainment.
Keywords United States of America, Viticulture, Wines, Marketing strategy, Organizational change
Paper type Research paper
In this paper I use the example of ultra-luxury wines to examine how knowledge sharing
between incumbents and newcomers was crucial in the formation of a market place for
high status goods in a specific region. I argue that firms, through their winemakers,
collaborated to forge a collective identity that led to operational upgrading and
subsequent improved consistency and quality in their products. As such improvements
were affirmed by official ratings groups, the region acquired high status attributes that
in turn attracted new entrants. The cooperative relationships that were crucial to
organizational learning in the early phase, and embedded in networks, became gradually
recast in more competitive terms as firms now search to differentiate themselves from
others. Given the codification of knowledge that has occurred with industry maturity, it
is now less likely that reciprocal exchange relationships are necessary for new firms to
attain performance capability; instead details are disseminated through educational
programs and institutional bodies that are public goods.
I argue that the growth of a collective identity among specialist organizations has
become more structured so that organizational sub-populations co-exist in what is now
a more formally circumscribed marketplace. Differentiation of sub-populations occur
not because actors are on the periphery of a market dominated by generalists as
International Journal of Wine ecological models of resource participation argue (Carroll, 1985; Swaminathan, 2001).
Business Research Instead, they compete in separate niches where varying levels of resource availability
Vol. 22 No. 1, 2010
pp. 6-26 shape market positioning and performance. Opportunities for resource rich specialists
# Emerald Group Publishing Limited
1751-1062
have encouraged new entrants but it has not necessarily led to high mortality rates for
DOI 10.1108/17511061011035170 incumbents as organizational ecology scholars might predict (see, for example,
Delacroix et al., 1989). But it does explain the growth of niche resources that enable From
newcomers to be less dependent upon informal knowledge networks.
My focus is on Napa Valley which in the last three decades has attained an
co-operation to
indisputable recognition for quality (Kramer, 2004; Taber, 2005; Wall Street Journal, competition
November 3, 2006). By concentrating upon a fairly small geographic region where
brand recognition and generalized high status permit premium prices, I analyze how
this luxury market[1] has emerged. By identifying the circumstances under which
economic transactions are embedded in networks, internal labor markets, trust, and/or
7
institutions, one can assess the salience of such features in incipient market growth
when product quality is difficult to measure or to predict in advance. Specifically, I look
at the cooperative knowledge sharing role played by key actors who were often owner/
winemakers and whose network activities occurred within a quasi-competitive
framework and an emerging institutional structure that sustained production norms. I
also show how the status signaling mechanisms that provided gradual legitimacy for
the industry in its infancy (when quality was either unknown or questionable) are now
used by newcomers as a benchmark for their own aspirations.
If we are to understand how markets develop and operate, including the evolution of
specialist organizations therein, we need to determine how they are structured and
what role is played by key individuals whose knowledge and expertise can aid firms
that are attempting to establish a market presence in such a sector. It is precisely the
network or relations between key actors that provide resources for firms in the
aggregate (Burt, 1983) and permit some form of structuring that results in overall
governance becoming institutionalized (Podolny, 1993; Campbell et al., 1991).
Meanwhile information exchange by key actors can act as conduits for organizational
learning and efficient market transactions (Granovetter, 1985; Uzzi, 1997). Ties among
such actors are crucial for this exchange to occur (Powell, 1990), as is an element of
trust and a willingness to exchange information that might seem to undermine the
competitive advantage of a particular firm.
As markets mature, key actors within firms establish performance parameters by
relying upon information derived from similar placed actors in competitor firms. I
hypothesize that such knowledge (rather than merely information) sharing is crucial to
the performance of individual firms but also promotes enhanced quality in outputs of
the market as a whole. In other words, embedded relationships structure knowledge
transfer in ways that enhance overall efficiency and sustain market growth.
Opportunistic behavior is less prescient here than informal and formal channels of
communication that are distinctly cooperative in nature. In a luxury goods market
where quality and status (or brand) are at a premium, gaining access to core
operational competencies is essential for firms, but so is their success contingent upon
the market as a whole continuously upgrading its performance indicators. In such a
symbiotic relationship, firms establish reputations by market association but markets
depend upon individual firms to continuously demonstrate their individual capabilities
according to external evaluations.
As brand identity increases, however, the industry inevitably attracts newcomers
who often possess resources that enable them to purchase requisite inputs (best land,
best viticulturalist, and best winemaker) and focus upon attaining high quality as
measured by industry rating groups. This presumes that incumbants are willing to sell
(and realize a profit on their initial investment) and/or that additional land for
viticulture becomes available in the area (transformations within the existing
agricultural sector). An increasingly fluid labor market for winemakers (greater firm
IJWBR density, more formal training programs that increase the supply of winemakers) result
in firms bringing in outside specialists or poaching winemakers from incumbent firms.
22,1 Therefore, I further hypothesis that the accessibility of community experience and
codified knowledge as the market has matured renders high-quality goals attainable
without necessary recourse to established networks, hence diluting the cooperative
endeavors that sustained the industry in its ascendancy.
8 Research methodology
Semi-structured interviews with winery owners, general managers, and wine makers
at 40 Napa Valley wineries were conducted between 2005 and 2007. Each winery in this
sample produces at least one wine classified in the luxury category; some produced
several wines in this category, others one high priced and several lower priced wines
(although all fall under the general rubric of ultra-premium). I focused almost
exclusively on wineries that produced a Cabernet Sauvignon or a Bordeaux blend since
these are the signature grapes for this region and ones which are largely responsible
for its reputation. It is typically the varietal wine that a person entering the market in
Napa Valley will make (possibly alongside Chardonnay). Wineries were selected from a
list derived from specialist publications, principally Wine Spectator and The Wine
Advocate, as these are the principal ratings sources that score individual wines on
quality and are accepted as industry benchmarks. Frequent rankings and listings of
Napa Valley Cabernet Sauvignons and Bordeaux blends are published and I focused
upon wineries which produced wines that obtained scores of at least 90 points from
one of the two publications in the past ten years. I used a ten-year period to
include established wineries as well as new entrants to the market. From an initial list
of 51 wineries, 28 of the interviews resulted from ‘‘blind’’ calling; the remaining 12
followed the use of two informed insiders who contacted a resource person at a
designated winery and then provided me with an introduction. This proved an
expeditious way of securing interviews with wineries who otherwise (as several
subsequently commented) would not have agreed to a meeting.
I further classified wineries according to size based upon the number of cases of
wine produced annually. Small wineries are those producing less than 15,000 cases;
small to medium (15-75,000 cases), and medium (over 100,000 cases annually). All of
the wineries in the sample were privately owned. Also, I endeavored to get a balance of
established wineries (founded at least 20 years ago) as well as newcomers (entered the
market in the last five to ten years) in order to discern how differences between
industry founders and newcomers might be apparent. My assumption was that smaller
wineries were more likely to be recent start ups, were better capitalized, and more
intent upon exploiting the reputational effects by establishing a high price, limited
production wine. They were also more likely to hire an established winemaker to gain
instant credibility.
Interviews lasted between 1 and 3 h and typically involved a tour of the winery and
in some cases the vineyards. In four instances repeat visits were made. When
interviewing the owner, I was able to gain specific information about the winery’s
financial operations as well motivations behind the firm’s start-up, initial capitalization
costs, revenue streams (including when profitability was attained, if at all), vision, and
strategic goals. With general managers much of the same information was provided
but less personal background was available. In my interviews with wine makers
I asked specific questions about information sharing, relationship building, and inter-
firm mobility since these were crucial to understanding market stability. From prior
research in this area I realized that cooperation had become normative in the early From
phase of the industry’s growth; in my interviews I wanted to pursue this line of enquiry co-operation to
further and systematically determine the mechanism for such cooperation and asked
specifically about this when questioning winemakers. In nine cases the owner was also competition
the winemaker, hence I was able to gain a further nuanced perspective from this joint
position. Table I provides a summary of the sample.
The questions were grouped into the following basic categories: history of winery
and personnel; production decisions and operational questions; interactions, both
9
formal and informal with others in the industry; marketing and brand building;
Network competition
If informal networks were crucial in building market prestige given limited formal site-
specific operational knowledge, as such knowledge becomes codified and operational
IJWBR parameters more clearly defined and externally constrained, such networks
22,1 conceivably become less relevant. Given decreased incentives for cooperative
knowledge transfer and brokering, logically the population of organizations should
evolve into a more competitive structure as actors have the possibility (needs?) to
differentiate themselves as density increases. Relatedly, as firm density increases,
incumbents are more likely to differentiate themselves from each other and doing
18 introduce an element of competition that in the past was noticeably absent.
In evaluating such propositions, there are several dimensions to consider. First, it is
well accepted that the high status identity associated with the Napa brand came from a
collective improvement in production methods since the 1970s[7]. While such
improvements are individual winery-based, the majority in the AVA recognize that
their reputation adheres from their regional association and it is therefore incumbent
on them to ensure that their production methods are consistent with best practices that
maximize their efficiency. Second, striving to differentiate themselves from their
competitors by accentuating terroir, they nonetheless protect the integrity of their
Napa AVA since this is seen as the basis for their prestige (and high price)[8]. With
increased density, firms with more valuable resources (prime vineyard location, top
winemakers) leverage those resources in their pricing and are able to command high
status when receiving consistent high ratings. This results in a more differentiated
structure within the region, as ‘‘luxury’’ producers meet different market segments
from those less able to exploit scarcity/high-quality/high prices niches. But all retain an
affiliational identity with Napa Valley as this is the overarching imprimatur of quality.
Because of secular increases in the overall demand for higher end wines (consumers
trading up in their habits), producers do not see the market as a zero sum game.
Owners capitalize on any high scores that they have received and use that in their
marketing efforts; they work with distributors who play a crucial role in placing their
wines in appropriate markets. But unlike many competitive marketplaces where
producers emphasize their strengths and their competitors’ weaknesses, Napa
producers are more likely to highlight the somewhat unique characteristics of their
wine as a differentiating tool and/or rely upon high scores by experts to validate their
product. As one owner commented ‘‘my wines are good but so are many others here.
I work hard to market my wines but in doing so I’m also pushing the brand so in a way
every one benefits.’’ I asked him if he saw the several wineries that abut his property as
competitors. He responded that ‘‘in a way they are but they’re not trying to drive me out
of business. I help them sometimes with vineyard stuff and they help me. There are
some who I’m not particularly friendly with, some who are really secretive, some who
I’m amazed at what they are trying to do. Do I get on with them? Superficially yes, with
some; close friends with others, neighborly with the rest. At the end of the day we all
have to work hard to keep the product out there. We go to the same pourings, work
with the same distributors and restaurants, do the same charity events. The bottom
line is we’re selling a similar product that’s expensive.’’
What does appear to have changed, and this might merely be a function of
increased density, is that interaction is more likely to occur in formal settings where
information flow is more structured and less reciprocity-based. Trust remains because
winemakers and winery owners have encouraged institutional agencies to foster
collective norms and they have agreed to abide by them. But weak ties now are more
likely to characterize many of these interactions even thought the sense of belonging by
individuals is strong. While not necessarily arms length of the type found in
contractual market relationships, there is more differentiation among participants, with From
interactions more likely to be between winemakers of similar status and reputation.
A winemaker who now owns his own 2,500 case winery best summed up the
co-operation to
opinion of so many of my respondents on how relationships have changed in the Valley. competition
He said in a 2007 interview:
What we’ve got now is a much more complex and competitive landscape. In the past you’d
help others because that was the way to learn and most of us were novices when it came to the 19
different aspects of winemaking. Sure I had technical skills but it’s so different with the
practical skills that you needed. Our various winemaker groups really helped me learn and I
believe they were crucial and getting the industry on the firm footing. It’s a lot different now
because the newcomers bring so much money and there are so many [winemakers] with the
necessary skills out there. That means you don’t really need all those informal groups. We still
taste but it’s more to show off your wine than to say ‘‘hey [. . .] help me make this better.’’ We’re
still friendly and we talk a lot about the industry but there’s an edge now to conversations. I
think a lot of it is because the stakes are so much higher now and everyone’s expected to make
great wines. We’re Napa and that brand drives expectations so you’d better deliver. In the past
I’d say we cooperated to help everyone make a better wine that would be competitive; now
we’re competing to see who can make the best wine and get ahead of the pack.
Informal friendships inevitably exist and many owners claimed mentoring relationships
with more ‘‘old timers’’ in the Valley. But there’s also as one said ‘‘a healthy suspicion that
publicly some individuals could not be relied upon to be entirely accurate.’’ One GM said
that the annual pre Christmas parties and meetings are times when wineries can claim
that they have had the ‘‘best harvest ever,’’ the ‘‘best quality grapes ever’’ and lie about all
sorts of things! Nobody really believes this rhetoric but it is the annual ritual of make
believe. This is consistent with Johnson et al.’s (2002) argument about the role of
declarative knowledge or ‘‘know-what’’ which is predicated upon low levels of information
complexity. In this case it emanates from the desire to trumpet the virtues of an individual
winery and hence imply a competitive advantage for that producer. According to my
sample, new winery owners were more likely to ‘‘accentuate’’ or ‘‘distort’’ facts pertaining
to production and established vintners more guarded about their successes. As one owner
of a medium sized (35,000 cases) winery with a long track record of success said:
There’s a couple of people whom I trust and respect in the valley, who’ve been at this for
decades and who’ve taught me a lot. Others have come in and thrown money around and
bought success but not necessarily respect. The latter want instant credibility but it takes
time. They’re impatient but often don’t listen. They rely upon a few staff and possibly a high
paid consultant and think that they can ignore what goes on among the rest of us. Often they
succeed but it diminishes the trust that used to exist in the valley.
Another owner of a similar sized winery (30,000 cases) echoed these comments but
went on to add that:
the new money and corporate wineries have moved aside the old agriculturalists who were
pioneers back in the 1970s. A lot’s changed and while we still meet and talk, it seems more
formal now than in the past. I don’t necessarily think of them as my competitors but I do
recognize that they have resources that I cannot match so I have to be careful[9].
The owner of a small (1,300 cases) winery, whose family has owned land in the valley
for generations, was quite prescient in identifying the issues. She commented:
We make 1300 cases and we don’t have lots of dot com money to throw around so there’s no
way we can realistically compete with the cult or even corporate owned wineries. We can
make good wine and look for smaller distributors to sell it, rely upon a few restaurants to
IJWBR promote it, and the rest goes through our wine club. Really we don’t compete in the same
marketplace as the others yet we share a similar product. We go to the same meetings, sit on
22,1 the same boards, offer wines for charity events etc. Our winemaker gets around and he’s great
at trying new things he learned from others. I suppose my conversations with fellow owners
is at a different, more formal level. But we’re all part of the same industry and I suppose we
get along because we have to. There’s argument and dissent and even hostility to some of the
newcomers. They might not be bothered about being accepted into the community but they
20 desperately want to make a good wine [they hired a top winemaker to do this] and so in a way
they become part of the whole valley scene.
While this might sound like nostalgia for the old times and a reverence for the old
timers, it nonetheless captures the perception by established producers that a certain
formality now structures interactions and there is less transparency. There is certainly
resentment by old owners that they lack the resources to match the impact that new
owners have been able to bring for their product. But the sub-population of small
producers operate in a niche as specialists, competing on the periphery because of their
limited resources. Such a view of resource partitioning allows parallel markets of
specialists to co-exist, some with extensive resources (new entrants) and others
without, but without this necessarily affecting mortality rates in which that earlier
studies predicted (Delacroix et al., 1989; Swaminathan, 2001).
All of the respondents commented that relationships now are more formalized and
prescriptive and there is much more obsession with ratings and scores. New owners
have less need for informal community membership since it does not come with any
greater access to information nor is it often even possible given their absentee nature.
Their principal emphasis is to ensure that the collective identity of the Napa brand is
maintained since it is an indispensable part of their own aspirational/reputational
identity.
Conclusion
Research on clusters continues to emphasize the link between localized learning and
innovation (Maskell, 2001), building upon earlier work that identified the dynamism of
geographically proximate firms as drivers of growth (Porter, 1990). These complement
studies in organizational evolution that focus upon resource partitioning (Carroll, 1985;
Swaminathan, 2001). However, what is often lacking in such studies is the precise way
in which knowledge is transferred other than to suggest that firms are embedded in
networks, and how such actions can promote the successful growth of a cluster. This
study attempts to specify exactly what the mechanisms are which structure learning
and establish specialist organizations in what becomes a high status marketplace. It
then shows how eventual industry stability around high status production norms
means new entrants are less likely to need access to informal networks to attain such
effectiveness levels. Instead of claiming that increased density mitigates network
efficiency, I argue that the consolidation of operating principles renders network
membership less important for new entrants than in the past when the industry was
still climbing the quality ladder. Resource partitioning is both an enabling and a
differentiating concept whereby sub-populations of specialists co-exist in a market
niche despite having different resource bases.
Since the focus has been on luxury wineries, understanding how status is attained
and maintained is crucial. I have argued that the pursuit of a high status product, with
attendant price premiums, has encouraged and required key actors to negotiate dense
and tacit forms of knowledge sharing in a geographically specific network. While this
network is inevitably restrictive in terms of membership, the success of individual From
members is tied to the collective reputation of the region. Individual winemakers/
owners are a constituent part of this network, the parameters of which are sustained by
co-operation to
internally accepted group norms of knowledge sharing plus externally by formal competition
organizational affiliations of the wineries themselves. New entrant firms typically seek
out winemakers with established reputations and bring resources that permit them to
gain immediate entry into the high status marketplace. But the winemakers
themselves become part of the multifaceted sets of formal and informal relationships
21
within Napa Valley that structure interactions and shape behavioral conventions.
While no clear evidence of leader firms shaping overall regional governance was
found, it does appear likely that the most successful winemakers (those who garner the
highest scores) become effective benchmarks for others. Greater resource availability
therefore improves organizational survival and encourages new specialist foundings.
The growth of a collective identity has been crucial for such organizational survival as
well as facilitating differentiation within the market for specialist firms. This means
that high status producers are more likely to be able to reproduce that status, and
sufficiently well resourced new entrants gain such status, without disruption to the
marketplace. More resource scarce firms (generally small producers) nonetheless
survive in a separate niche, but continue to draw their legitimacy from membership of
the regional cluster (collective identity).
To conclude, there are three important findings that have been presented. First, I
show how the interaction between key individuals within a marketplace of firms was
the primary conduit for crucial knowledge sharing that was indispensable for the
attainment of requisite quality for the growth of this luxury product. This was
predicated upon principles of reciprocity and a cooperative framework that sustained
trust and respect among key actors. The practical learning that occurred within such
embedded networks (learning by doing) supplemented more formal training that
individuals acquired either through educational programs or ‘‘working one’s way up
the winery’’ (de facto apprenticeships). No matter what their background, the essence of
the hands-on experience that enabled winemakers to comprehend the complexity of
site-specific idiosyncrasies becomes part of the collective knowledge pool through such
interactions. The ties between winemakers were dense and structured largely, but not
solely, through informal contacts. These interactions promoted common approaches or
conventions and contributed to the upgrading of the sector over the past two decades.
Such networks of embedded interactions are responsible for the success of emerging
specialist organizations, the growing collective identity of which furthers resource
partitioning but in ways that do not necessarily lead to increased firm mortality.
Second, once the industry became unambiguously associated with the production of
high status products, the means whereby such excellence could be easily replicated with
sufficient resources increased. This allowed new resource rich entrants to ‘‘buy their way
into the market’’ and enabled them to function effectively without necessarily embracing
the cooperative network of relationships that had sustained the sector’s growth. This did
not destroy reciprocal exchange relationships within the sector. It did, however, render
their utility more superfluous. Given easier access to tacit knowledge that hitherto had
been more privileged, new entrants were less likely to invest time and energy into
relationship building which in turn eroded the collective benefits of networks.
Third, competition has supplanted cooperation as winery owners compete to attract
the top winemakers and differentiate their product according to site-specific
characteristics. This is not the cut throat competition one finds in less concentrated
IJWBR product markets but it is demonstrably different from the situation of several decades
22,1 ago when the market was in its infancy. The risks are lower now than before which
might explain current disincentives to embrace cooperation; similarly extant
knowledge is widely available and publicly disseminated. Nonetheless, new and old
owners strive to maintain market parameters, enforce district conventions, and abide
by institutional stipulated rules to create stability.
22 While this might sound like an elegy for old timers and the old ways of doing things,
it is nonetheless an accurate depiction of what happens when an industry emerges from a
small collection of specialists, builds a collective identity that becomes a resource in itself,
but then becomes a victim of its own success by attracting new entrants whose own
resource base permits a different form of network interaction. There are not necessarily
‘‘good guys and bad guys,’’ merely different actors with varying resource bases who
forge an evolving collective identity which encourages further sub-specializtion of
organizational populations albeit in a more structured competitive framer than before.
As with cluster evolution in other wine regions such as Chile, and in the USA,
Oregon and Washington State, such growth was often predicated on creating informal
structures that supported the knowledge through cooperative endeavors. This was
even more crucial given the complexity of knowledge required to consistently make a
high status product. Such sharing might seem inimical to normal competitive
marketplaces, but such sharing enabled new firms and established ones to attain and
reproduce requisite quality levels to support their desired high status goals. Market
maturity resulted in changes in such relationships precisely because the benefits of
such arrangements had diminished and boundaries are created that reinforce status
distinctions. Competition replaces cooperation but only when the market has matured
significantly to render the latter’s utility less crucial to stability.
Research on other industries with similar growth trajectories, tacit knowledge
parameters, and high status aspirations would be useful to see if such a pattern has
been replicated elsewhere. Similarly, it would be useful to see whether other wine
districts experienced a similar growth stage only to be thwarted by the lack of
institutional supports, the complete breakdown of consensual norms or high mortality
rates by firms lacking in resources to respond strategically to the challenge of
increased specialist density.
Notes
1. Wine classifications according to price typically assign the top segment as ultra
premium which includes wines priced over $14 a bottle (retail). However, in this study I
classify ultra-luxury wines as a sub-sector of this category and involve those whose
retail price is over $40 a bottle.
2. Actual mortality rates are difficult to determine. Here I use failure to secure high scores
as a proxy measure since this can seriously affect reputation and status and most
importantly sales of wine.
3. Such ratings enable people who feel insecure about wine to use a seemingly objective
measure of quality and therefore look to scores to inform their buying. Retailers and
restaurants typically emphasize high scores as a sales tactic, and wineries invoke them
in their own marketing. These agencies therefore legitimate tastes and also the high
price that is subsequently paid for the wine.
4. See Taplin (2006) and Colman (2008) for more detailed discussion on the role of ratings
and particularly the criticism leveled at Parker for his numerical scoring system and his
preference for powerful wines that inevitably stand out in blind tastings but are perhaps From
less food friendly than other wines.
co-operation to
5. Steve Heimoff’s (2008) recent book on his conversations with classic winemakers in
California provides interesting insights into how these individuals build reputations at competition
wineries then often move on.
6. See Enright (1998) for further discussion of how new forces energize clusters sometimes
replacing those that gave it its initial advantage. 23
7. In 1976 at a blind tasting of French and California wines held in Paris, French judges chose
several virtually unknown California wines over the more established and famous French
ones. This brought significant attention and fame to the re-emerging California wine
industry and demonstrated that Napa Valley in particular could produce wines of extremely
high quality that would match the best from Europe. For further details of the event and how
this permitted the industry to gain credibility and status, see Taber (2005).
8. Bulk wine producer Fred Franzia, CEO of Bronco Wine Co., who came to fame recently with
his ‘‘two buck chuck’’ Charles Shaw wines that sell 5.5 million cases annually through Trader
Joe’s, has suffered legal setbacks after attempting to use the name Napa on three of his
Napa-named brands (Napa Ridge, Napa Creek, and Ruherford Vintners). The law requires
75 percent of the grapes to come from the location listed on the label and since his wines do
not have that percentage (most coming from the Central Valley of California), the NVV took
legal action. Franzia lost in court because he was unwilling to pay the higher prices for Napa
grapes that would be necessary if he were to continue the use of Napa on his labels. On their
part, the NVV were arguing that they were merely protecting the integrity of their brand. See
Sogg (2006) for a fuller discussion of Franzia and this case.
9. Conaway (2003) and Siler (2007) provide interesting commentaries on the transformations
that have occurred in Napa Valley during the past few decades, replete with personality
clashes, the flood of new money, and the ambitions of newcomers, hirings and firings, and
struggles over regulatory issues. Such nuanced narratives are a useful complement to the
staid academic studies of power and privilege.
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25
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Appendix. Questionnaire*
Open ended questions. (*strict confidentiality is maintained and names of wineries or people
involved in study not identified)
History of winery
Can you tell me about your founding, who was involved in it and where your resources came from?
Principal types of wine sold:
# cases:
Acres under production:
Ownership: family/corporate/private partnership
Staff numbers.
Production and operational aspects
Are you profitable?
Are you changing anything about your approach to winemaking?
Do rating agencies (Parker, Wine Spectator etc) affect the way you make your own wine? Do you
see these agencies as causing a homogenization in winemaking, a convergence of taste? Is this
good, bad or irrelevant to your winery?
How much has changed in your winery over the last few years? Would you describe these
changes as pro-active or re-active?
Do you plan to expand production? Reduce capacity? Any partnerships or joint ventures with
other wineries in other areas/countries planned or currently existing?
What are the challenges that you face in the current environment?
Networks and interaction
Would you say that a cooperative environment exists amongst premium producers whereby
information is shared informally through established networks? Or is it more secretive and
competitive?
How much interaction do you have with fellow winemakers/owners/general managers?
How would you characterize these interactions?
Are there informal norms that encourage information sharing?
How do you learn winemaking techniques and issues that are site specific?
What attempts are made to collectively market the Napa brand as a status wine? Do you think
more should be done to limit production and ensure quality control? If so what exactly?
Regulatory problems
Does the recent Supreme Court ruling on inter state shipments effect your winery? What are its
implications for the premium producers if any?
Do you foresee other government regulations affecting your production (environmental issues for
example)? What steps do you take to anticipate potential changes?
Competitive pressures
What changes in the competitive landscape do you perceive?
How are they affecting your particular winery?
IJWBR What about increased competition from overseas? What countries? Has this increased and do
you expect it to continue to increase?
22,1 How have you responded to these changes? Are your strategies different now than in the recent
past?
Do you think that your own position is more vulnerable now than in the past and if so what are
you doing about this?
Supply chain issues
26 What are your thoughts on the recent concentration trend amongst distributors? Does this affect
your winery and if so how? Do you see further concentration occurring?
Are there other changes in the supply chain that you anticipate affecting premium producers in
Napa in general and your winery in particular? If so how do you plan to respond to them?
What’s happening in the valley and the industry in general
Share your thoughts on how trends are developing and what this means for incumbents.
This research is purely for academic purposes and has no commercial intent.
All participants will remain anonymous.
Thank you for your help
Corresponding author
Ian M. Taplin can be contacted at: Taplin@wfu.edu