The Tasitng Panel Dec 2017

DECEMBER 2017 • $6.95
Scheid
THE
PHOTO: JEREMY BALL
Family members representing Scheid Family Vineyards:
Kurt Gollnick, COO; Tyler Scheid, Project Manager; Al
Scheid, Founder & Chairman of the Board; Heidi Scheid,
Senior Vice President; and Scott Scheid, CEO.
FAMILY
WHY YOU NEED TO
KNOW MONTEREY’S
MOST DIVERSE
WINE COMPANY

COVER STORY
Ingenious
GENEALOGY
THE SCHEID FAMILY, THEIR EXTENSIVE
MONTEREY VINEYARDS AND POWERFUL,
INNOVATIVE WINERY
by Jessie Birschbach / photos by Jeremy Ball
Before I really dive into
this story, I want to make sure you understand one
thing—the Scheids make damn good wine. My first
sip ever of the velvety, savory, and bright Scheid
Vineyards Reserve Pinot Noir stopped me dead in
my tracks. The District 7 (a label from the Scheid
portfolio) Chardonnay is a wine director’s by-theglass
dream come true that overdelivers on price,
especially as a genuine representation of Monterey.
When a group of high-level Angeleno somms
encountered the Scheid Vineyards 667 Pinot Noir
at a recent Tasting Panel blind tasting, they all
immediately knew it was Pinot Noir: a tribute to
the wine’s typicity. With terms like “pretty and
Scheid’s
400-foot-high
wind turbine
generates 100
percent of the
winery’s power.
58 / the tasting panel / december 2017

The Scheid Vineyards 2013 Reserve
Pinot Noir from Monterey: a blend of
the estate’s best barrels of single clone
Pinot Noir aged 20 months in 100%
French oak (80% new).
unencumbered,” “great structure and
complexity,” and “racy, savory, and
delicate” appearing in their tasting
notes, there’s no question—and this
former somm and current senior wine
editor concurs—that the Scheids make
great wine.
But that’s not what this story is
about. It’s about a family—an extraordinarily
business-savvy family—and
the Monterey-based grape-growing,
winemaking empire they have toiled
to build. Whether it was intentional or
unintentional, I’ll let you decide…
THE PLANNED ACCIDENTAL
BEGINNINGS
Founder & Chairman of the Board Al
Scheid will be the first to tell you the
Scheid Vineyards origin story is not the
most glamourous. Established in 1972
as the Monterey Farming Corporation,
the company was originally the general
partner of several limited partnerships
in which vineyard ownership in
Monterey served as a tax shelter for
its investors. Al, the one setting up the
partnerships at the time, ended up also
having to run the company.
For a decade and a half, the
Monterey Farming Corporation would
sell all of its fruit to other wineries; at
one point, the company was responsible
for farming roughly 6,000 acres. It
was during this time, however, that Al began to think ahead to
an uncertain future. “I woke up one day—this was in the ’80s—
and realized someday these people are all going to sell out,” he
recalled. “They’re going to force me to sell the property by vote;
they’re going to try and find someone to buy individual units;
or they’ll try to throw me out and force a sale that way. That’s
when I decided I had better start making plans.”
Al began buying partners out every year using what money
he had saved, and by January 2, 1997, “we owned it all,” he said.
Al then renamed the company Scheid Vineyards as the acreage
under vine fluctuated, landing on the final number of 4,000
acres representing what he described as “the choicest properties
of all the properties we had.”
Noted viticulturalist Kurt Gollnick, formerly of Bien Nacido
Vineyards, started with the company as the General Vineyard
Manager in 1988. Now the COO, he told the Tasting Panel
about some of the strategies the Scheid team had to develop
and execute as the world around them—and the company
itself—evolved: addressing phylloxera in the ’90s, as well as the
oversupply of wine; upgrading the vineyard; designing and
building a winery; producing wine for others; and, of course,
finally making and selling wine themselves. “When we decided
to build the winery, we literally went all in,” Gollnick said. “We
The Scheid family and
COO Kurt Gollnick
drop in on a custom
crush grape delivery.
december 2017 / the tasting panel / 59

COVER STORY
Al Scheid watches
as his son Tyler
gives a punch-down
demonstration in the
open top fermenter.
“LUXURY WINEMAKING
ON A LARGE SCALE”
Today Scheid Vineyards consists of
4,000 acres of grapes certified sustainable
by the California Sustainable
Winegrowing Alliance that span
more than 70 miles of the Salinas
Valley. Bejeweled along this lengthy
strip of Monterey wine country are
eleven estate vineyards, all planted
appropriately to four different climate
zones. The cooler, breezy Monterey
AVA boasts one of California’s longest
growing seasons. Taking advantage
of this is a 400-foot-high wind turbine
(which generates more than enough
power to cover the winery’s needs)
and 39 different varieties of grapes
planted, not to mention an astonishing
20 different clones of Pinot Noir. That’s
probably one of the reasons why the
Scheid Vineyards Reserve Pinot Noir
is now one of my favorite Pinot Noirs
out of Monterey—they’ve got a lot
of options.
Constructed in phases from 2005,
the winery and bottling operation
offer what multiple employees proudly
describe as “luxury winemaking on a
large scale.” The winery processes the
equivalent of 2 million cases annually
and boasts a crush capacity of about
35,000 tons of fermentation. “This
winery really matches the quality of
fruit we have coming from Monterey,”
CEO Scott Scheid said, raising his
60 / the tasting panel / december 2017
leveraged all our resources, as much as
we possibly could, and if that had not
worked out for us we would have found
ourselves liquidating a lot of the assets
and shrinking our management team.
We’d have all been looking for work.
So, there’s been this series of calculated
risks, and I’m really proud to have been
a part of solving those problems by
actually assembling teams that have
made major contributions to all of that.”
In retrospect, Al can’t help but mull
over how things could have unfolded
differently during those early years.
“The correct way of getting into this
industry is growing grapes for a minimum
of 20 years before you make any
wine, then once you start making wine,
you should sell it to other wineries,
because they’re heavier task masters
than the consumers,” he explained.
“After you sell the bulk wine to wineries,
you make your own wine, put a
label on it and try to sell it. Distribution
is one thing, but still, at that point there
are a lot of problems behind you. You
know how to grow grapes. You know
how to produce good wine. Now the
trick is to sell, but at least you’ve got a
good product. I wish to God I could say
I sat down and worked out all this stuff,
but I didn’t.”
Metz Road 2015 Chardonnay and 2015
Pinot Noir from the Riverview Vineyard
in Monterey.

voice above the clanking sound of
our shoes on the lofty steel catwalks
as we marched between the large
open top fermenters. “This open top
fermentation is no different than a
small, boutique winemaker with a
four-by-four bin punching it down by
hand,” he said. “In our case though,
we’ve got just a little bit of a hydraulic
assist so you can do six, 12, or even 25
tons at a time.”
Director of Winemaking Dave
Nagengast has been with Scheid since
2002, and says the winery—which
he helped design—takes cues from
small-lot handling to make production
“a very simple process.” “It’s not hands
on, but it’s gentle handling. Everything
that comes through here is handled
very similarly, and we have a lot of
control,” he explains. “We have open
top fermenters for certain varieties for
certain conditions, closed tops, and
[wine pump-over] venturi injectors with
the ability to add air to the fermentation
so the yeasts are happy. We also have
temperature control on everything so
we can control the rates of fermentation
or the storage conditions. The approach
is really kind of thinking about things
as a very small, high-end production
winery on a large scale.”
Gollnick adds to the state-of-the-art
list of features in staggering detail
and with great pride, making it obvious
that he really is—as the Scheids
refer to him—“one of the family.” His
blue eyes shimmer as he points to a
sloped-bottom fermentation tank and a
conveyer that looks like a robotic longnecked
dinosaur. “We invented these
tanks, which the manufacturer dubbed
‘the Scheid Slide,’ so we never have
to put an employee in there to shovel
the grapes out,” he said. “Safety is very
important to us.”
We continued to walk through
the city of steely, silver, and round
skyscrapers before stopping in front of
some sort of locomotive. I wondered
where it would take us, but Gollnick
stepped in to explain that this innovation—basically
a “big train” weighing
roughly 250,000 pounds when full—has
the ability to move up and down the
line to each fermenter. “This grape
press on rails is just like other presses
that are in line and immobile, but it has
two doors for loading, although we
always use one,” he added. “The advantage
here is that we’re not sluicing. The
vast majority of wines are made from
sluiced grapes; they literally put a wine
pump into this tank and whip the grape
skins around, whip the seeds around,
and get everything liquified. Then they
pump it to the press, but by doing that
they’re literally cutting the skins and
the seeds again and releasing the bitter
tannins. So that’s one of the luxury
sides of this process—we don’t break
the skins and the seeds down, and
I think you get a better wine quality
product right off the bat as a result.”
Scott Scheid and family
give Managing Editor Jessie
Birschbach a tour of the winery.
They’re standing next to the
“Scheid Slide” fermentation tank,
with the press on rails in the
background.
THE SCHEID
ENTREPRENEURIAL SPIRIT
Getting to know the Scheids adds
another level to the concept of a
“family-run business,” because they’re
a family of business-minded individuals.
This is apparent even in what could
be called their extended family, which
is made up of those who have been
part of the company for many years.
Gollnick epitomizes this as an equal
partner in the company, just the same
as Al and his brood. “I have a true love
and affection for the family,” Gollnick
said. He’s also an obsessive farmer—
even farming his own hobby vineyard
at home—but that’s another story.
Al was born into a poor family in the
december 2017 / the tasting panel / 61

COVER STORY
small coal-mining town of Bridgeport,
Ohio, and graduated from Harvard
Business School with an MBA. While
at the helm of the Monterey Farming
Corporation, he also worked as an
investment banker and ran two
biotech companies. I asked Al about
working with his family, to which he
replied, “The good news is they joined
the company not under duress or any
pressure from me.”
Scott Scheid may not have had to dig
his way out of the same disadvantages
as his father, but he certainly inherited
Al’s ambition. Tall in stature, Scott
looked down at me with a bit of a smirk
and said, “The joke around here is
that I missed my calling and I should
have been an engineer. But I studied
economics instead, and it’s a great
combination here because there’s so
much innovation and engineering that
goes into making quality wine and
getting those grapes into the bottle.”
According to Scott, his father actually
never intended for Scheid to evolve
as a family business; instead, they were
“a finance family who found our way
into a great industry.” Scott was actually
working at E.F. Hutton & Company
primarily as an options trader when
his father called to propose he join
Scheid Vineyards back in 1986. He took
a sabbatical from Wall Street and never
looked back. “My dad’s philosophy that
no matter what, you’ve got to go out
and make your way in the world before
you come back and get into a family
business, has been to the benefit of this
company,” he said.
In fact, Scott notes that some of
the most successful wineries they’ve
observed over the years are run by
“people who came from other places
with other disciplines.” “I think we’ve
made a lot of solid plans, and because
of that we’ve grown with the Monterey
and California industries as needed,”
he explained. “We’ve certainly rolled
the dice, but we’re not gamblers, and
we’ve seen a number of agricultural
companies go out of business by overextending
themselves. That’s where I’m
grateful that we’re finance people who
found their way into farming and wine
grapes, rather than farmers who had
some success and had to learn finance.”
This reminded me of our dinner with
the whole family the night before. It’s
Kurt Gollnick, COO; Al Scheid, Founder and Chairman of the Board; Heidi Scheid,
Senior Vice President; Tyler Scheid, Project Manager; and Scott Scheid, CEO.
here we got to know the youngest,
Tyler Scheid, who works as a Project
Manager at the company. With his
casual demeanor, Tyler seems the
least likely of the Scheids to imbue the
entrepreneurial spirit, but he swiftly
proved me wrong: Our “polite dinner
conversation” revolves around data
collection, analytics, harvest logistics,
and total vertical integration.
“There’s a lot of IT work in what I
do. I work under Kurt, the COO, as the
company has grown into the new lines
of business. When I first started in vineyard
operations in 2011, the company
was just getting into the branded goods
business and finished goods production,
so with that comes a lot of change and
adding onto the business process—you
know, really thinking through setting
62 / the tasting panel / december 2017

up the company infrastructure to
handle these things,” Tyler said, pausing
occasionally to eat his fish. “The systems
infrastructure is part of the foundation
that’s helped to scale up our business.
You basically limit your scalability if
you rely on your old systems to do new
things. In order to play the game, you
have to get into things like advanced
analytics and really understand what
your business is doing for strategic
planning purposes.”
Al would pepper Tyler’s buffet of
information with a relevant story or two
before Tyler eagerly jumped back in to
talk about CellarWatch, the information
portal provided for Scheid’s custom
crush and winery clients. “The customers
that use our CellarWatch tell us that
they get better information out of our
portal then they get out of their own
winemaking system because we show
every single cellar operation: all the
racking, the movements, the blending,
custom crush, even pictures of the
grapes when they come in,” he said.
“There’s always been this kind of technology
bent. Innovation and technology
are part of the DNA of this company.”
with a laugh. When I admitted I didn’t
know either, Heidi explained that she’d
used Lotus, a spreadsheet program, so
frequently at Ernst & Young that she
“was kind of the spreadsheet master
back in the day before spreadsheets
were widely being used in businesses.”
The dense and dark
Stokes’ Ghost 2014 Petite
Sirah from Monterey.
After that visit—and while still on
maternity leave—Heidi stayed at
Scheid to put all the depreciation and
inventory schedules into the program.
In 1992 she officially came aboard as
Scheid Vineyards’ Director of Planning,
eventually working her way up to
Executive Vice President, and by the
early 2000s, the leadership quadrant at
the company was complete.
Noting the Scheid knack for forecasting
the future, I asked Heidi what was
next for the 45-year-old company.
She responded that they’re “really
focused on a winner”: the company’s
District 7 brand, which is available on
Kroger and Ralphs shelves, Lucky/Save
Mart, Gelson’s, BevMo, and, starting
in January, at Northern California
Safeways. “Nothing in the wine industry
is actually an overnight success. District
7 feels like it’s just kind of hitting that
stride and now it has to prove itself,”
Heidi said. “We think the wine is great,
and we’ve gotten good response on the
package as well. It’s authentic Monterey
at a great price point. We work really,
really hard on wine quality, and we can
sustain that because we source everything
from our estate vineyards. It
feels like it checks off all the right boxes,
but as my marketing professor told
me in graduate school, ‘Ultimately the
market decides.’”
Beyond the growing success of
District 7, Heidi said she’s also “really
The current Monterey-based District 7 lineup
from left to right: 2016 Sauvignon Blanc,
2016 Chardonnay, 2015 Pinot Noir, and 2015
Cabernet Sauvignon.
THE FARSIGHTED FAMILY
At the end of our visit to the winery the
next day, I finally sat down with Heidi
Scheid. Although she’s the last Scheid
mentioned here, she’ll be the first to
say hello. As the warmest member
of the family (which is already good
humored) and equally as sharp, Heidi
previously worked as a manager at the
first California Pizza Kitchen in Beverly
Hills. That’s probably why she’s also the
wine savviest of the bunch as a Certified
Specialist of Wine, but it also speaks to
her work ethic. Heidi received her BS
and MBA degrees from the University
of Southern California and worked for
quite some time as a valuation consultant
for Ernst & Young.
After the birth of her first child, Heidi
decided to visit Al and Scott at their
office and noticed something when
she arrived. “Ernie, our controller, had
this big green ledger paper and was
working away with a pencil. I asked
him what he was doing and he said,
‘Depreciation schedules.’ I was like,
‘Why don’t you do that on Lotus?’ and
he said, ‘What’s Lotus?’” Heidi recalled
excited about Metz Road.” “This last
2017 vintage for the Chardonnay, we
did a native yeast fermentation in the
vineyard, which is great because I love
that Burgundian style of Pinot Noir and
Chardonnay. It’s a higher price point
so we’ll see where that goes,” she said.
Stokes’ Ghost—“100% Petite Sirah
behind a great story”—is another label
to watch. “I think the goal is to just
keep nurturing these core brands in
our portfolio and help them reach their
potential,” Heidi added.
I wondered how the Scheids will
reach that potential—less out of
concern than curiosity, because if
any family has the ability to do so, it’s
them. As if she’d read my mind, Heidi
answered, “We’re always trying to get
distributors to come out here. We can
do the presentation in Ohio or wherever
and show pictures of the tanks and the
open-top fermenters and the vineyards,
and they’ll be convinced we’re believers.
But when you actually hang out
for a day in the vineyard and see the
winery and meet the whole team, you’ll
not only believe it in your mind—you’ll
believe it in your heart.”
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