Private Estate Vineyard Builder Creates Unique Winery Business Model
An Interview with the CEO of Post & Trellis Vineyards & Winemaker of La Honda Winery

A quasi-urban wasteland of industrial warehouses and technology business parks, Redwood City is, without a doubt, among the unlikeliest of locations for a producer of premium California wines.  But it was in this very setting that I found myself during a recent visit to La Honda Winery, one of the increasingly numerous of its kind and part of the "urban winery" movement.  Curiously, upon closer examination, I found some very significant differences separating this from other wine production facilities located amidst the metropolitan sprawl: a surprisingly inviting aesthetic reminiscent of more visitor-oriented wine regions and a compellingly unique business model based in barter with growers who are also clients.  I sat down with CEO and winemaker Ken Wornick in the tasting room of his charmingly appointed winery to taste some of La Honda's recent San Francisco Chronicle award-winning wines, and to learn more about his singular approach to grape growing and wine production under the Santa Cruz Mountains appellation.

NM:  From what little I know right off the bat, I would say that without a doubt, as a winemaker specifically and as a winery overall, you're atypical.

KW:  Definitely!  Although I think I'm very typical in the sense that I was like a lot of other people who were ensconced in another career and had an eye on winemaking for years and years, but who never allowed themselves the privilege of thinking that they could actually do it.  I'm originally a geologist.  When I was in college, trying to figure out a career, my mom literally said to me, "Well, you like to work outside.  Why don't you look through the college catalog and see what disciplines let you work outside."  I was already halfway through college, at the end of my sophomore year. So I got involved in geology, got a degree in it, and really loved it!  I went to work for Bechtel [Corporation] in San Francisco, the largest privately owned construction company in the world.  They built most of the infrastructure in Ryad and Dubai.  They also built a number of nuclear power plants all over the U.S.  Anyway, I was a field geologist with Bechtel for six years, and I loved it!  I was young, I was flying all over the world and was putting what, to me, was a lot of money in the bank because I was getting paid a salary but had no apartment, no house, no car, no nothing. But towards the end of those six years, I was noticing that a lot of my colleagues drank too much, had too much family spread out all over the world, too many divorces — I had realized that it was just not the right life for me in the long term.  So, I went back to school, got an MBA, and got to working in industry, mostly the food and beverage industry.

NM:  You went from construction to food and beverage.  I'm guessing that was a significantly pivotal part of your career, in that it perhaps laid the groundwork for your eventual work in wine.  Was that per chance, or did an opportunity come up?  Did something in particular spur you to take that new trajectory?

KW:  It was purely by chance.  I was just getting out of grad school, doing interviews, and ending up meeting with a series of companies that happened to be in the food and beverage industry.  Of course, it wasn't completely by chance because I wanted to do something a little more connected to people.  So, now, fast forward: I'd been married for twenty years, had three little kids, and was renting a house in Foster City — back in California again, after years of geology and then industry work around the country.  This next transition is hard to describe, but I'm one of those people who was always thinking, "Why can't I find something to do that is really deeply meaningful?"  There are so many people that, once they've done it, say "Boy, I'm so glad that I discovered and am doing what I love."  So, I had an honest conversation with myself and realized that growing grapes and making wine was something that had always been on my mind.  Still, to this day, I can't believe I'm sitting here telling this story, but I was essentially struck by a bolt of lightning: I realized that there was an unusual confluence of circumstances right here in the Bay Area.  First off, the Santa Cruz Mountains, unbeknownst to many people, has historically been an amazing grape-growing region.  For example, [it was the appellation that produced] the Ridge Montebello Cabernet that won the 1976 and then the 2006 repeat on the Paris Tasting.  And that's in addition to a lot of other stellar local wineries, some of which have acclaim and some of which don't have acclaim but deserve it.  So, I realized I was living here in Foster City looking up into these mountains with the great potential to grow grapes.

Secondly, we were in an area that was economically thriving at the time, with the whole dot-com boom.  Lots and lots of people were building huge McMansions with their huge McTennisCourts and their McSwimmingPools, and they needed a McVineyard to go with their lives.  On the side, I took every single class that UC Davis offered on an extension basis, to get the academic part of my grape-growing and winemaking training.  And this was before I actually did anything with all that, other than simply having an idea.  [After my training], I went on a couple of internships where I took two weeks off from my job and went to Napa for my vacation to work in different wineries, including a couple that were noteworthy.  Then I came back and on the spur of a moment, I quit my job and bought a pickup truck… and created a website and a business card called Post & Trellis Inc. Its whole purpose was to design, install, and manage small, custom vineyards for private clients.

NM:  Was that the first point at which your experiences, skills, and interests converged?

KW:  You got it.  Right.  There was a confluence of geography and wealth on the outside, and on the inside there was this love of being outdoors, the knowledge in geology, the experience of food and beverage, and the master's degree in business — and the pressure of having a small family but not wanting to get up every morning to put on a tie and do the grind.  Little did I know that I was signing up for a bigger grind than I ever imagined!  But, anyway, fast forward ten years: here we are in 2009 and there are 26 vineyards in the Post & Trellis Inc. farming company portfolio, designed and installed, and are currently under management.  Early in 2004, I'd leased a winery space in Redwood City, hired and trained a crew to start helping me in the vineyards, and expanded to having a fleet of vehicles and a lot of equipment.  The whole thing was evolving organically — pun intended — to a point that three, four, five years after the first vineyard was signed, the fruit was ripening and I needed to do something with it!  The initial plan was just to either sell the fruit or to custom contract some local winery to make the wine for my clients.  That was my original thinking, when all I was going to do was grow grapes for private clients by building these awesome, unlimited-budget vineyards on these incredible pieces of property in places like Atherton, Woodside, Los Altos Hills, Saratoga, Sunnyvale, and Cupertino.  And it all came true: these vineyards are beautiful, the fruit is amazing, and much of it is now going into award-winning vineyard-designated bottlings of La Honda.

But my original thinking, once again, evolved into something new: actually making the wine from that fruit.  It happened when I met my business partner, Don Modica (of Modica Landscaping next door).  He came to me because he wanted a vineyard on his property in the small town where he lives, which is… La Honda.  So, together we figured that he needed a better showroom for all of his stone and timber work, and I wanted to take the next step and build a winery — where I could exclusively accommodate all of the fruit that's coming out of these private clients' vineyards and offer them not only winemaking but private label bottling.

So, with that, I had the makings of a completely vertically integrated system: designing, building, and managing the vineyard; harvesting the fruit and turning it into wine; then bottling it with a private label and returning it back to the customer who may be president, CEO, chief evangelist, or COO of dot-com A, dot-com B, or dot-com C.  All these pieces just continued to come together beautifully so that now, here in 2009, we have this wonderful winery that's completely serious in terms of winemaking and totally organized around respecting the sustainably farmed vineyards that we've designed, built, and managed, so that we can control it all from start to finish.  Then we took the best that Don had to offer — all this beautiful stonework and stucco, and all this cool, found timber from his ranch in La Honda — and made a beautiful hospitality space [in this warehouse] where we can sell all of our estate-branded La Honda wines right out the front door to the public.

NM: You began with the intention of creating vineyards for high net worth clients wanting 'to live the California dream,' which for them wasn't complete until they had their own vineyards from which wine could be produced and bottled.  But to what extent is La Honda's own wine sourced from the fruit of these clients' vineyards?

KW:  All of the fruit from each of the vineyards in the portfolio comes here to La Honda Winery in Redwood City.  There are then basically two scenarios.  In the first one, the private client retains 100% of their fruit from which we make their private wine.  In that case, we harvest that fruit, bring it into the winery, make it according to their specs, and bottle it with their label — all for a fee.  It then goes right back to the client, with no other consumers out in the public seeing it.  And that scenario applies to perhaps a quarter of our vineyards.  The second scenario is where clients defer to me to take the fruit, vinify it, and return some of it back to them in the form of a few bottles that are blended with some fraction of their own fruit — all with no fees involved.  In that case they have me make all decisions: how to vinify and then blend it, when to bottle it, how long and in which kind of oak to age it.  These wines go under the La Honda label.  The entire arrangement of that second scenario [the majority of my business] is on a barter basis.  We don't actually buy any fruit at all!

NM:  Okay, now that is a very different business model!  There's a flow, a circulation of give and take, an exchange of resources.  It's very yin and yang.

KW:  Yes!  This truly is unique.  That word is overused in this industry, but we really have a one-of-a-kind model that I don't believe exists anywhere else in the world.  The model is intended to be win-win, all the way.  The clients are willing to spend a lot of money on farming because it's their fruit — the unlimited farming budgets are what allows us to grow perfect fruit, which makes its way into these award-winning La Honda-brand wines.  There is none of the usual pricing tension between grower and winery.

NM:  Allow me to play devil's advocate for a moment.  With all the costs involved in doing this, is it really worth it for the client, just so they can have a cellar full of their own wine?

KW:  Let's say it costs $100k to install a vineyard.  You regard that as an investment, and set it aside.  Now let's just say it costs $10k to farm the vineyard for the year and harvest the fruit and get it to the winery.  And let's say it's another $10k to convert that fruit into a finished product in bottle with cork, capsule, and label.  That's $20k.  Now let's say that for the $20k, the client got 500 bottles — that's $40 per bottle.  Wow!  After all that (high-end farming and custom winemaking, with a first-class bottle, cork, capsule, and label), their cost per bottle for a world-class wine is no more than it would have cost them to go out to a fancy restaurant and buy a mediocre bottle for the same price.  But because of the way my model is designed, it might seem like a fortune — $20k is a lot of money for an individual to pay for an inventory of wine — except if you're a dot-commer up the hill who really loves wine and has a cellar to fill, and it only costs you $40 a bottle to have your own château-quality private wine.  The model really works. That's basically the first scenario I described.   In the second model, the client takes a percentage of their wine back with them, in bottle with the La Honda label on it.  And it's either some kind of a blend or, when the vineyard warrants it (in my opinion as a winemaker and marketing person), will get a vineyard designation.  [The remaining percentage of wine the client leaves with me] is in the exact same package, but something I market and sell myself under the La Honda label.

NM:  Standing back and thinking about all this objectively, it seems to me that you have quite a knack for identifying seemingly disparate resources at your disposal — both tangible materials and intangible skills, talents, and experiences — and then figuring out a way to gather them together and construct a picture in your mind of some way that you can utilize and harmonize them together.  And you do this not only for your own advantage, but in a way that others can benefit from, as well.  After all, you've managed to map out a successful trajectory whose beginning and end points have absolutely no obvious connection: you went from geologist to winemaker, with several milestones in between, all of which now, after the fact, have actually connected quite nicely.

KW:  Well, I take that as a wonderful compliment!  Here's the thing: I'm really bad at math.  And people who are bad at math are typically intuitively able to connect pieces where others may not see relationships.

NM:  For someone so bad at math, you've definitely got one compelling equation of a business model here!  Let's drink to that!

Although he will, on occasion, don his former hat as vineyard developer under Post & Trellis Inc., the recent growth of his winery business and the subsequent demands on his winemaking talents have Ken Wornick devoting nearly all of his time and energy to La Honda Winery.  To learn more about the evolution of the winery or its handcrafted wine produced from select vineyards in the Santa Cruz Mountain appellation, visit La Honda Winery online.