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A Vintage Business
Vintage wine is good; vintage technology isn't. Winemaking may start with farming, but, increasingly, IT is there every step of the journey, from planting grapes to decanting the finished elixir.
The business is fiercely competitive. In a Nielsen study, a major supermarket averaged 588 different wines on its shelves, the biggest category in the store. Some 5,000 wineries in the U.S. fight for that space. While a handful of large holding companies have enterprise-class IT systems in the industry, such as Constellation Brands, owner of the Robert Mondavi Winery, most wineries remain small, family-run businesses where information technology is harder to pronounce than Gewurztraminer.
"The wine industry is a relatively immature industry in the IT world," Schwing says. "Capital expenditures haven't been a high priority. I used to see the same thing in the manufacturing/financial world 20 years ago. It's very difficult to communicate among the packages; there's a lot of Band-Aids and baling wire tying all these things together."
Barnes has been wrestling with these issues since becoming Korbel's first CIO four years ago. He has presided over a major overhaul of the company's technology, replacing legacy systems, beefing up infrastructure and putting down a foundation for the winery to finally leverage its IT investments as a competitive advantage. Over the years, Korbel had invested in technology, but it wasn't well integrated or managed.
"Our previous data center was basically a converted office," Barnes says.
For the new data center, Korbel upgraded to a new redundant uninterruptible power supply (UPS), enhanced the electrical systems to provide better circuit loads for the servers, and implemented a new air conditioning system designed to provide stabilized cooling temperatures and improved environmental conditions. The new data center provides 33% more capacity than the old facility and is designed to meet the company's needs for several years.
"The industry as a whole has been behind the curve, but I've seen that change a lot since I've been here," Barnes says. "Korbel is a midsized winery but feels very strongly about technology."
Four years ago, Barnes drove through the redwood forest lining the Russian River and pulled into the driveway of Korbel, where a 19th-century brick building covered with ivy sat in the center of a sprawling estate of terraced vineyards stretching into the nearby hills. "When I drove into the main gate and took a look at the place," he recalls, "I fell in love and said, 'I want to work here.' "
In the 19th century, a refugee from Bohemia named Frantissek (Francis) Korbel and his brothers founded a building-materials business in San Francisco. Eventually F. Korbel & Bros. Inc. moved into the lumber business, buying a sawmill in the Russian River town of Guerneville a couple of hours north of the city. The brothers also tried their hands at farming, cultivating the Pinot Noir grape used to make Champagne. Before long, winemaking was the family's main business.
In 1954 the family sold the winery to Adolf Heck, a third-generation winemaker. Heck invented a riddling machine, which turned fermenting bottles automatically; previously, this was done by hand. His son, Gary Heck, took over as president in 1982. That decade, the company enjoyed double-digit growth, acquiring other properties such as Kenwood Vineyards and Valley of the Moon Winery. Today, Korbel sells more than 1.3 million cases a year and posts about $150 million in revenue.
"Champagne pays the bills," Barnes says.
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