Interview: Generational Succession

Interview: Generational Succession

For many of the New World’s most established regions, a changing of the guard seems to be at hand. Pillars of the community who brought appellations and brands to global prominence are passing the baton for the first time to their offspring. In Europe, centuries-old family wineries continue to contend with inheritance laws and other factors that fracture their estate holdings with each passing generation. Meanwhile, these past several years have witnessed the sale of myriad high-profile family wineries to larger corporations, from Burgundy to Barolo to the Napa Valley.

While some families groom several members of the younger generation, others find only one interested child—or none. The lack of a blood successor is frequently cited as a major reason for winery acquisition. According to the 2019 Silicon Valley Bank State of the Wine Industry Report, more than one-fourth of all wineries polled indicated they were either “likely” or “seriously considering” selling their business within the next five years.

Generational succession presents a make-or-break opportunity for family wineries—one that can result in a seamless transition of power, a more contentious familial situation, or completely new ownership. And keeping family wineries in family hands is no small feat, as the four contributors to this article demonstrate. Interviewees include Marilisa Allegrini, CEO of her family’s eponymous estate in Valpolicella and Poggio al Tesoro in Bolgheri; Erwan Faiveley, President of Domaine Faiveley in Nuits-Saint-Georges; Maya Dalla Valle, Director of Dalla Valle Vineyards in Napa Valley’s Oakville; and José Lovaglio Balbo, Winemaker and Export Manager at Susana Balbo Wines in Mendoza.

Clockwise from top left: José Lovaglio Balbo, Maya Dalla Valle, Marilisa Allegrini, and Erwan Faiveley.

Bryce Wiatrak: When did you enter the family business? Did you always know that was something you wanted to do?

Marilisa Allegrini: Allegrini is a family that has been making wine in Valpolicella for hundreds of years. I represent the sixth generation in the wine business. But it was my father who in the ‘50s expanded the winery by buying new vineyards and increasing production. My father was a kind of pioneer—very dedicated to the Valpolicella area. He introduced a lot of innovation both in the vineyard and in the winery.

I grew up in Valpolicella. When I finished high school, I said to my father, “I don’t want to work in the family business, because you have two boys.” I told him that he had the right people to carry on the family tradition. I became a physical therapist. I worked for five years in the hospital. My father was not very happy about this [and] kept asking, “Can you please come back?” And at one point, I felt the family commitment, and I decided to start working for the company.

Erwan Faiveley: I think I turned 20, 21. Before that I was very much a geek, quite passionate about math and physics. My dream would have been to be an astrophysicist, working on physics, stars, and the universe. But then I realized that it would be a rather dry type of atmosphere. At some point, I got fed up with math and physics, so I eventually I turned to finance. And then I realized that taking over the winery would be something that I would do. To be honest, I didn’t plan to take over at the age of 25. I was thinking about working for a major bank for a couple of years, working in big cities around the world, and maybe coming back when I turned 35 [or] 40.

Maya Dalla Valle: I entered the family business in 2017. Growing up, I did not want to be in the wine business. I think it’s like when you have too much of a good thing around you, and it’s right in front of your face—it’s too obvious. I went to University of Washington in Seattle for international relations, and then I started thinking, Napa Valley’s not bad. It’s a pretty great place. I’m an only child, and so there’s that factor—that if I don’t enter the family [business], what’s going to happen to this place? This property is very special for me because it’s the place that I grew up and my parents created together. My father passed away in ’95, so my mom’s been toiling away, running it by herself up until I came back.

I started thinking about things in that perspective. Coinciding with the economic recession when I graduated from college, I decided [to] go work harvest, because it was really hard to find a job, and that’s how I fell in love with winemaking. I was 21. So that became this decade-long journey to come back to the winery.

José Lovaglio Balbo: Unofficially, I’ve been in the business since I was born. We lived at the family winery. So I’ve been a part of this for a long time, working at the cellar, lending a hand wherever possible. Then, I went to study at UC Davis for viticulture and enology, and I worked for several other wineries there. I rejoined the company officially around 2010.

Bryce: What did you have when you took over? Were you given vineyards, a functioning winery, a full team of employees?

Marilisa: I had vineyards and the winery at that time. But the company was much smaller than what it is now. It was challenging because I had to learn from scratch how to manage a company, because my father passed away very unexpectedly.

Erwan: When I took over, my father resigned from all his positions. He gave me the chairman and CEO position of the winery, but also all of the family holdings.

Maya: We’re a small team. We’re about 10 people total, including our vineyard team, so we all put a hand in everything. My title [is] director, but I still clean the floors and do basic administrative tasks.

José: This was already a mature and booming business. One of my challenges was to professionalize certain aspects. At the time that I entered the company, we streamlined some processes. The goal was to try and detach the family a little bit from the day-to-day business side. I think we’ve achieved that. Now, we have a very nice team of people that is here to support us. That allows us to free our time for viticulture and enology during the growing season, and during the rest of the year, going out and promoting our wines. We sell to 37 countries now.

Bryce: Did you ever work outside of the family business? How did those experiences inform your work today?

Marilisa: I was a physical therapist. As you can imagine, [medicine and wine are] two completely different worlds! What I learned from the medical field is that it is important to be kind, compassionate. It’s something that, as a human being, helps; it doesn’t matter what you do. And this is my approach to life, something that comes from my former profession.

Erwan: I worked in the financial departments of a big firm in Philadelphia for two years. I basically worked for five years in finance. Alongside the winery, we also have industrial businesses. Mostly, we hold one of the biggest rail equipment suppliers. When I took over from my father, I was running day-to-day the winery, but I was also presenting my family’s interest at the board of those companies. The wine industry is a very interesting one, because it’s an industry with all the qualities, requirements, etc., but the sales are very small. At the same time I was managing the winery, I was also spending time with engineers who were crafting high-speed trains, crafting metros all over the world, and that was a very rich experience.

Maya: I worked two years at Neyers Vineyards in Saint Helena, and that’s where I really fell in love with winemaking. The winemaker there, Tadeo [Borchardt], was amazing and really is hands on and took the time to explain the how and why of what he was doing. But my mom was like, “That’s nice, but even the interns here have an enology degree. So if you want to do winemaking, you have to go get a winemaking degree.” I ended up going back to school and getting my master’s at Cornell for enology, and then I worked at Ornellaia and Masseto in Tuscany and a harvest in Argentina at Bodega Rolland.

And then I thought I’d come back to Napa and get a job, [but] a family friend of ours said, “You really should work in Bordeaux. Send me your resume, and I’ll see who will take you for a harvest.” Two weeks later, he said, “Pétrus will take you—will you go?” I ended up staying in Bordeaux for three years, because I loved it so much. I had a great experience at Pétrus, and then I ended up doing another master’s so that I could stay in France and continue learning. I did six months at Château Latour, and after I graduated, I worked at Stephan von Neipperg’s properties, Canon-la-Gaffelière and then La Mondotte. I really valued those experiences and that time away. The wine business is really humbling. Just when you think you have a grasp on something, you get blindsided by something else. I was really thankful my mom pushed me to go out and make mistakes somewhere else.

José: I worked always as an intern during my college years. I worked in Napa, and later I worked in Pomerol. And then locally, here in Mendoza, I worked for some projects that were starting—people that had different vineyards and wanted to create their own wines, and also building a winery. So I was able to get some experience along the way, prior to rejoining the winery, and that was very important because it really gave me exposure to a formal working relationship—having a boss, having purely professional commitments.

I think the most challenging part of working at a family business is that it’s like a stage, and you’re part of this play, but you have double roles. At times my mother is my boss, and at times my mother is my mother. And she’s uniquely special at changing those roles at will! There [are] not clear-cut states where she’s the boss, or even at home where she is my mother. It’s all mixed. So having this exposure in a more formal work setting allowed me to be aware of when she’s being the boss, and when she wants to be a mother. It’s challenging, but it has its rewards. And I think it’s part of the requirements of doing what we do.

Bryce: How did your vision diverge from that of your predecessors? What did you know you wanted to change, and what did you have to keep the same?

Marilisa: My father was a very talented man. He had big visions. For me, it was not the case that I changed a lot what he did, but only that I tried to improve. For example, one thing was to travel, because for my father, it was important to welcome visitors coming, but not to go around the world. And then, my father was very dedicated to viticulture, which was not common at that time, especially in Valpolicella where the production was in the hands of négociant or large-scale industry. So he focused a lot on the vineyards. And what I personally did was to improve the amount of vineyard that we owned. At that time we had more or less 40 hectares of vineyards, and now we are close to 200.

Twenty years after working for the family company, I decided it was time to start something new, to go out of my comfort zone, which was Valpolicella, and to look to something different. Our concept was always on quality, so I looked around [at] which areas were producing great quality wines. My first idea was not to go in another historical area, like Chianti. I identified the coast of Tuscany. I visited different parts of the coast, but when I went up in Bolgheri, I said, “This is the place.” Bolgheri is an area that combines beautiful landscape, beautiful history, and also the possibility to make great wines.

Erwan: My father was making wines that were very ‘90s. It was a decade where people wanted big wines, extracted wines, tannic wines, lots of colors. Even though my father was not a friend of Robert Parker, to say the least, there was this trend of those big wines, even in Burgundy. When I took over from my father, the taste of people had moved to much more delicate, silky, smooth wines. Within the first two, three years, I changed a few people in the team to get this new style. 

Maya: That’s always kind of a delicate thing, because obviously my parents and then my mom have created great success with this property. A big part of that is being hands on and being involved. For me, it wasn’t really about coming in and putting my imprint on this place. I do think about what my legacy is going to be, but more about how [to] take what we have and make it one step better. I added a couple more consultants in the vineyard, because that’s already been a big focus for us. Adding a pruning specialist and thinking about how we can have vineyards that last 50 years or 100 years. When I was in France, I got into the idea and practices of biodynamics. That’s something we’ve just started implementing­—we’re learning as we go.

José: That was a very interesting learning experience for me, because in the beginning I wanted to change everything. I was exposed, especially in California, to different ways of doing things—different styles that you can achieve through making other types of decisions. I wanted to test this experience.

But what I learned is that you need to create spaces of creativity, but you don’t need to fix what already works. I realized that to modify the style of an already successful wine brand—it’s not a good idea unless you have a clear purpose. And my purpose was just to prove myself, and in time I realized that’s not relevant enough. So what I learned is to adopt her style and the style that started the brands, and to release the creativity and the ability to test new things in side projects, or in different versions of an already established brand.

Bryce: How has your relationship with your parents or predecessors changed since you’ve taken the reins? Are there aspects of the job that have surprised you?

Marilisa: I worked only for two years with my father, unfortunately, because he passed away. But it was important to have this time together to have the understanding of what was the mission of the company for him.

Erwan: Today, I run the winery alongside my sister, who’s mostly working in marketing and communications. But the relationship I have with my father is very beautiful. I have to say I owe my father a big tribute, because when he gave me the opportunity to take over, he would give me advice but never imposed nor looked over my shoulder on what I was doing. Even though we changed many things that he did, even though I wanted to move to another style, it was totally fine.

Maya: My mom and I are really close. Probably the biggest obstacle to get over was how to separate professional life from personal life. We’re mother and daughter, but in a work environment, we have to work in a different way, and not like, I’m your mom, so we’re going to do it this way. It’s learning how to have a back-and-forth dialogue with substance behind it. It’s a challenge at times, but it’s unlike having a relationship with a boss because you can achieve so much more when you’re on the same page. You both have that equal investment into a place, and both care about it equally.

José: Our relationship changed a lot from the time I left for university and the time I came back. While I was at university, the business had the greatest growth. When I left, my mother was not nearly as recognized as she became when I came back. And she had to put herself into the role of being an ambassador in a more involved way. It changed her in many aspects. She really became the brand. And it’s different because we now, after this exceptional growth, had commitments to our importers, to our markets. So I came to a winery that needed to have a presence overseas, and that involved much more heavy travel. I think the evolution of the company changed the family as well. Now, we need to schedule and really fight for family time, whereas before it was just natural.

Bryce: How much of what you know about wine did you learn from your family members, and how much from formal training?

Marilisa: From my family, I learned a lot. Growing up in a family that is so strictly linked with the land and the wine production, every day you speak about this subject. So I learned from the beginning, when I was a child. Then when I took over, I learned by myself. Even if I didn’t study at the university for agriculture or winemaking, I learned from the practical [experience]. Throughout the years, I was able to achieve a good knowledge not only in terms of sales and marketing, but also in wine production and viticulture.

Erwan: When I took over back in 2005, I thought about taking an enology class in Bordeaux or Dijon. I told you I did math and physics, but I also did a lot of chemistry. Enology isn’t simple, but enology is a lifelong learning experience. At the end of the day, I realized that just by reading two books, one on viticulture and one on enology and the chemistry of winemaking—if you know those two books that every student in university would learn, you are totally fine. Now, whether that means you will be a talented winemaker? Absolutely not. It gives you the knowledge, [but] it doesn’t give you the recipes, nor the talent.

Maya: It gives credibility to have that formal training, because it’s always easy to assume, well, she’s the daughter, so of course she’s going to waltz into this position. It feels good for [my] self-esteem, too, to know I prepared for this, I trained for this.

More stuff in the technical side, I bring from my formal training. And then things from a business perspective I learned from what my mom does.

José: I learned a lot of the science of wine, or a lot of the “whys”—why something is a certain way, or what you can do to solve a problem, or the different stylistic versions you can achieve depending on the consequences of your decisions. I learned all of that very in-depth in school. But no wine school teaches you about styles, and developing your own styles, and making the decisions to create your own identity as a winemaker. That I really learned from my mother—to be very perceptive and to really understand what you want to be as a grower. As technicians, we can learn about the different techniques. But to really commit passionately to a single path, and to say, this is going to be my style—that’s a process that I very much learned here at home.

Bryce: If you have siblings or cousins also in the business, how were your roles determined?

Marilisa: At that time, it was 1983, the wine world was a very male-dominated business. There were no women in the wine industry. The production part was covered by my father and my two brothers. One was dedicated to the vineyards, and one to the vinification process, helping my father in the winery. And so, I decided that first I wanted to do administration, but then I discovered that I liked more the sales and marketing side.

Erwan: In my generation, I have one brother, one sister. My brother is not interested in the business. He’s interested as a shareholder, meaning he looks at what we do and gives his view. But he’s not in the day-to-day business, and I don’t believe he’ll join. My sister had worked in the marketing department of Estée Lauder, the makeup company. At some point she asked me whether I’d be comfortable to work with her. That was four years ago, and ever since it’s going well. She’s a tough cookie, but so am I, and we get along well.

José: I think our choices as careers is what really separated the roles. My sister went into business and marketing for school, and I went to viticulture and enology. It was pretty clear from the beginning our paths, so we really have no conflicts about that. She’s really happy about running the marketing department, being on top of every single detail about the image of what we do. And I’m very happy with the technical aspect of our business. I think we have a happy situation. [Beyond] that, it’s sort of the opposite. I encourage her to be more involved in the making of the wines, and she encourages me into having a say in what gets displayed in the labels and things like that.

Bryce: What are the greatest benefits of a family-run business? What are the greatest challenges?

Marilisa: The greatest advantage is that you can decide very quickly. If you see opportunity, you can take advantage of these opportunities. You don’t have to submit your decision to the board of directors. You just call your brothers and say, “Listen, there is this opportunity. Shall we take it?”

The worst disadvantage is that if you don’t agree, family can put a lot of passion into decisions. Sometimes, too much passion can also slow the process, because everybody has an opinion. So you have to agree. Luckily, in my family, we agree. Even if we have some contrast, it’s very small. We agree in the management of the company and the expansion of the company.

Erwan: One of the greatest benefits is that there is trust. We don’t feel the pressure of short-term benefits. Obviously, financials are important, but if we need to make huge investments, we will do them. In most businesses in the world, you have to have a return on the capital you invest. In a family business, especially in Burgundy, it’s true, but the horizon is a decade. That allows us to invest a lot without looking at the short term.

The challenge is when you work with your family, it’s not working with some random other person. You always have an emotional side that can be quite tricky to deal with.

Maya: It’s hard sometimes to separate the personal or your emotion from the business part. Maybe personally or emotionally, you don’t feel like something’s the right choice, but in the grand scheme of a business, that’s the choice you have to make. But I think it’s very advantageous for us, being here. My mom lives on the property. I don’t, because I think it’s healthy to have some space, but I spend a lot of time here. We’re both invested in the land and in the vineyard. It’s advantageous to be physically present and be here day-to-day. I think that brings much more strength to a business than just managing it from afar, or having no personal passion invested into it.

José: The greatest benefits of being a family-run business is the long-term commitment of the project. Being intertwined in a family allows you to think long term, and in this business [that’s] the only way you can become relevant. A family generally has very long-term goals. Our objective is to become a classic from this New World winemaking region. To achieve that, we need to think of the future generations. We need to think of what our style is going to be—how are we going to preserve and achieve that?

I think the most complicated thing is this mixing of the roles. It’s something that can be tough at times, because it’s very difficult to keep things separate. Emotions that can be appropriate in a family setting might get in the way of the business, and perhaps the formalities of the business get in the way of the spontaneity of the family dynamic.

Bryce: How important is it for a family business to stay in family hands? Under what circumstances do you believe acquisition to be the best move?

Marilisa: This is something that in Italy very rarely happens. In Italy, the family wants to keep [the business], and the next generation usually wants to take over the family business. But I don’t know in the future, because we are at a phase in Italy where many companies have grown and many families have grown. Maybe the future will change, and it will happen like in the United States where companies are acquired by larger companies. But it’s not the case for my company at the moment. We want to keep the business in family hands, and I hope that we will be able to succeed.

Erwan: It’s a question that is very hot at the moment in Burgundy. The prices of vineyards have gone through the roof, and it creates a lot of tension in family-owned vineyards. You always have one or two guys in the family who are not in the business who know what the domaine is worth and look at the dividends they’d get.

For us, we are lucky, because we are the seventh generation to run the domaine and we are the only three members—my sister, my brother, and I. My father was visionary enough that if we want to sell the company, we all have to be totally aligned 100%. There needs to be an absolute consensus. What’s going to happen with the next generation—we’ll see. Now, I hope my son will become a winemaker as well.

Maya: I would consider acquisition to be the death. That, for me, would be a feeling of failure, if it came to that point. Maybe that’s my weakness on a business side, but I can’t foresee that being the right move. I don’t see an instance or an example without that being the very last resort.

José: I think it all depends on the quality of people you are dealing with. For example, if you want to tackle the US market, you need to pass through this three-tier system where you have this process of consolidation in the distribution part, which makes for the merging of companies that are bigger and bigger with wine groups that are bigger and bigger. It’s difficult for family wineries to thrive in that environment. I think that if it gets to a point where you’re able to be part of one of these frameworks in a successful way, where you can respect your identity, but at the same time have access to the market, then it might be the only way to go forward for certain situations.

All businesses, large and small, are composed of people, so if the people that you’re partnered with really want to see family businesses be successful, and want to preserve and understand that the identity of that family and business is what makes that winery unique, then you’re talking to the right people and you can have long-term success for both parties. If not, if you’re dealing with people that are only in it for the money, that only see this business through an Excel spreadsheet, then you’re in trouble, because it’s like speaking a different language.

Bryce: What are you doing now to make sure the next generation will be ready to take over the business?

Marilisa: I think that I’m quite lucky, because I have two beautiful and very smart daughters that are very dedicated to the family business. And they both love Poggio al Tesoro. I think they can give big contributions in terms of communications, as I did, but also in terms of discussing with the agronomist and the winemaker for the improvement of the quality of the wine. Carlotta, my first daughter, is a medical doctor, and so she is into science. I told her that she needs to study a little bit of agronomy and to know the kind of things that she can improve in the future in the winery. She’s very dedicated to this, and I’m sure that sooner or later she will give her contribution. Caterina, she studied philosophy, and being a philosopher—you know, not just what to think, but how to think. From the marketing point of view, Caterina will be fantastic. I can’t wait to have them on board.

Erwan: It’s too soon to say. He’s not even one year old, my son, so he still has quite some time in front of him! My father has always been very clear with us that there was absolutely no pressure. He always told us, “We have this winery. If you don’t feel like it, if you have some other interests, go for it. We will figure out how we deal with the winery. And if some point you never want to come back, we’ll sell the winery.” I believe having no pressure has made the decision easier than if we had always known that at some point we would do that.

Maya: The Corgis are going to do a great job! As of now, there’s no future generation, but I would like there to be one.

José: I think I’d have to polish this answer as time goes by—I have a seven-month-old son, my first-born son, so I haven’t even thought about this. One of the things I learned from my mother and want to make sure my son learns is the capacity to cope with frustration, and to understand that in order for this to work, you need to be always on top of things. You need to be working as if you were an entrepreneur, even though it’s already a success and we have established brands. Nothing is permanent. You need to always be at the market. You need to always be refreshing the story. You need to insist on making sure everybody is active to preserve the success of the business.

And also, I think, the joy of learning. I want to make sure that my son really becomes a fan of reading books, and to understand that the learning state is not only passing through high school or college, but it’s always. You need to be updating your knowledge, relating yourself with people that know more, and appreciating and enjoying the process of learning. I think with those things, you have the core elements for success.

Bryce: Do you already have a succession plan in place? What does the planning process entail?

Marilisa: So far, it’s quite easy. I think the most difficult part of the transition from one generation to another is when you have a lot of components of the family in the company. In Poggio al Tesoro, we don’t, so I don’t think it will be difficult.

Erwan: Every five years, we get together to discuss whether we are aligned on the governance of the winery, and so far, so good.

Maya: It’s pretty simple, the succession plan. My mom is always going to be involved. She’s probably going to be on the sorting table when she’s 105. For her, she’s at a point where she wants to enjoy life a little bit more—travel more and take a step back. I think it’s, of course, at first hard, because this has been her pride and joy that she’s been managing single-handedly for over 20 years. She’s doing a great job of slowly passing more responsibility, but everything is in a slow succession.

José: We don’t have a formal process. It’s basically something that we do as we go. We have a situation where we have a very small family—it’s one sister and myself. We’re not at a situation where we need to really split things and put rules in place, at least for the moment. As of now, we haven’t set up a formal protocol to do that, but we’ve talked to experts in family succession. If you’re in a situation where there’s a lot of family members and the business is small, then you really have a problem. If there’s a lot of family members and the business is bigger, then the protocols are useful. In our situation, they would be very useful, but you need to set a lot of time to put them in place. We haven’t been able to achieve that as of now, but it’s something that we all consider as relevant and would like to do for the future.

Bryce: When the next generation takes over one day, what do you hope they’ll maintain from your legacy?

Marilisa: I must say that so far they are not criticizing. So maybe they see that I took the right decisions, but definitely I want them to be very involved and to give to the company their personal touch and their personal approach.

Erwan: I would say an eternal quest for quality and for human relations in the winery. I love the people I’m working with. For me, really the most important thing is, on the product side, that you make the greatest wines possible, and making sure the people you work with are well treated.

Maya: I hope they’ll still make a big focus in the vineyards. I hope they still take care of the land, and take care of keeping the soils healthy and being proactive on that front. And not thinking about just buying tons of vineyards, but also about the quality of the wine. For us, our focus is on quality, and if you start buying all these other wines or vineyards and start putting it all together in one, it takes away the singularity of this place. I would hope that they would honor this terroir and this land, and making wines from this place.

José: I think just standing the test of time, especially in a place as volatile as Argentina. In a place like this, just being able to have the name and the quality and the business thriving 100 years down the line, it’s the achievement by itself. We’re not afraid of evolving. We know that we need to stay current. So we’re not afraid to change our external image. But our core values, the name, my mother’s story, the story of the family—if that continues to be told 100 years down the line, then it’s going to be a success of succession.

Interviews have been edited for length and clarity. Many thanks to Marilisa, Erwan, Maya, and José for sharing their perspectives and experiences! 

You Might Also Like: