Robert, by then, had moved on to a more ambitious goal: convincing the world that wine drinking in moderation was not only socially acceptable but downright healthy. With the support of Harvey Posert, the brilliant Tennessee-born public relations man he had hired on Harry Serlis’s advice in 1980, he decided to personally launch a campaign against the rising “neoprohibitionist” movement. To run the program, he hired Nina Wemyss, an attractive blond woman who had been raised on the wealthy North Shore of Long Island. By making the case that wine had been a part of civilization for thousands of years and was in itself a civilizing force, he hoped to distance it from problems associated with beer and hard liquor, such as alcoholism and drunk driving.
In what became known inside the company as “the Mission Program,” Wemyss and Posert organized a series of symposiums in San Francisco, Philadelphia, London, and Brussels. Part junket and part educational seminar for the wholesalers, hoteliers, restaurateurs, retailers, and the media who were invited, the events drew together influential wine writers as well as campaigning doctors to discuss the risks and benefits of moderate wine consumption. Robert, who himself could polish off a bottle or two of wine a night in those years, sermonized at the start of each symposium that “wine is the temperate, civilized, sacred, romantic mealtime beverage recommended in the Bible, the liquid food praised for centuries….”
Despite some misgivings on chief financial officer Greg Evans’s part, Robert staked out a leadership position on the issue and endured a dustup with regulators at the Bureau of Alcohol, Tobacco and Firearms over the precise wording of the mission statement he was determined to put on every bottle of Mondavi wine. The watered-down language for the approved label ended up striking down any direct correlation between drinking wine and health: “Wine in moderation is an integral part of our family’s culture, heritage, and the gracious way of life.”
The Mondavis hoped that other wineries would adopt such wording, but few, if any, did. Mondavi’s mission program was criticized for focusing on the trade instead of the general public—a charge that Marcia tried to answer. “The reason Dad is preaching to the converted is because he wants them to start preaching,” she told a reporter. “He wants everyone to be a missionary. He’s trying to mass the troops.”
He got a big boost on November 11, 1991, when CBS aired a segment by correspondent Morley Safer called “The French Paradox.” The story was about a group of medical researchers and doctors who maintained that drinking red wine in moderation could help prevent heart disease. Soon after the broadcast, red wine sales soared. An epidemiologist named R. Curtis Ellison, who had worked at Harvard’s School of Public Health, made several trips to Oakville in the early 1990s, staying at the Mondavi guesthouse and lecturing to staffers about the latest findings on wine and health. The research he presented came as welcome news, allaying fears that some Mondavi employees had about the product they made and sold. Around that same time, Mondavi, Gallo, and dozens of other wineries and groups began funding a health study that Dr. Ellison was involved in, tracking the health effects of wine consumption over a five-to six-year period. Mondavi eventually ended its financial support of the study, as did many of the other wineries, over liability concerns.
It was these sorts of concerns, touched off by the CBS segment, that drove the final wedge between Robert and the Wine Institute, the industry lobbying group based in San Francisco. After the episode, some members of the Wine Institute, including Mondavi, felt “The French Paradox” story could be used as a marketing tool. The Wine Institute balked, fearing product liability lawsuits. When the institute decided not to support a small winery that got into a tussle with regulators after mentioning the CBS segment in its newsletter, Robert and Posert were outraged. To protest what they considered the institute’s do-nothing stance, Mondavi dropped out of the Wine Institute in the early 1990s, as did a number of other, mostly smaller wineries.
Perhaps because its largest financial backer was Gallo, the Wine Institute preferred to pursue behind-the-scenes lobbying similar to that of the tobacco industry. To its critics, the trade group seemed to adopt the secretive culture of Ernest and Julio’s company, which rarely spoke with the press and pushed its message through heavy advertising. In that respect, the Gallos’ philosophy was diametrically opposed to the Mondavis’, which relied almost entirely on word-of-mouth and lavish entertaining of wine writers and other opinion makers, while spending little on advertising. It was perhaps inevitable that the two cultures would eventually clash.
Meanwhile, Robert uncorked his mission speech at any opportunity. In March of 1993, six-year-old Emma Lipp, the daughter of one of the company’s top salesman, had a school project assigned to profile an elderly person. Accompanied by her father, Gary Lipp, Emma visited Robert in his office at Oakville to interview him, asking a series of innocent questions such as “Where and when were you born?” and “What was your school like?” But when Emma asked her final question, “What do you like to do now?” Robert launched into the mission statement, which little Emma dutifully wrote down in pencil in her childish script:
“I like to educate our country that wine is a liquid food which comes from grapes,” Robert told the girl. “When consumed in moderation it is part of the good and gracious life. When I was a little boy, three or four years old, my mother served me a little wine with water. If I abused it, it was bad and a disgrace to the family. Never have I seen anyone in my family abuse it. We should be taught the use of wine in our homes, schools, and in our community when we are young. Wine has been with us since the beginning of civilized man, seven thousand years ago. It has been part of our culture, heritage, and religion and will be with us indefinitely. Therefore, we should learn the proper use of it when we are young so we don’t abuse it.”
Of course, Robert shaded the truth with Emma by claiming he had never seen anyone in his family abuse alcohol, even though he had witnessed Marjorie’s long struggle with drinking. But his determination to spread the gospel of moderate wine consumption was so intense that he would not even set it aside during a brief exchange with a first-grader.
Robert’s sermons on moderation were ironic, considering the company’s bacchanalian past. On one or two occasions over the years, Robert Mondavi made his entrance as a Marilyn Monroe look-alike, complete with a blond wig, tight red dress, shaved legs, and dangerously high heels. After company Halloween parties, Robert, Margrit, and various staffers made late-night field trips to San Francisco’s sexually charged Castro neighborhood to enjoy the scene as tourists. The company also had a history of holding harvest parties and at some of these, employees got so drunk they could barely stand, let along drive themselves home.
The Mondavi men’s sexual approaches toward female employees were another example of less-than-moderate behavior. The Mondavi family’s sense of entitlement as the business owners extended to flirting with their staffers and Robert, in particular, had become audacious in this habit by the early 1990s after seeing how the baron got away with it. Robert, too, had trouble keeping his hands to himself and, because of his position and advancing age, was seldom if ever challenged on it. While most women saw his attentions as harmless fun, others found them uncomfortable. Adams, as his counselor, did call the problem to his attention, as did Michael, who told his father that some women did not appreciate his attentions and he shouldn’t “push it.”
One of Robert’s former empoyees claimed she was sexually harassed by Robert every day, though she never took any formal legal action. There were other instances of alleged sexual harassment over the years, all of which were quietly handled by Mondavi’s corporate counsel and never made their way to court. One young journalist, who had admired Robert during the time she was writing an article about him, was shocked and upset when Robert, with Margrit out of town, cornered her at a party one evening in the early 1990s, stroking her body and pushing himself against her. She attributed his behavior to his advancing age or senility, figuring that otherwise he wouldn’t have shown such poor judgment. She learned this had happened to other women in the valley, but decided to drop the matter since the Mondavis, and Margrit in particular, had become so powerful.
Margrit’s office at the winery was near Robert’s and she joined him on his business trips as often as possible. She also maintained, at least publicly, that his attentions to other women were never serious or lasting. Margrit realized that her husband, at one point, had become infatuated with Nina Wemyss, the wine historian he had hired to run the mission program. In Margrit’s view, Nina was fully aware of Robert’s affection, but Margrit also realized her husband was not likely to leave her for this other woman. Margrit believed Wemyss was taking advantage of him, and she did not intervene on Wemyss’s behalf when the company eventually decided to let her go.
Robert found ways to channel his sensuality. He became famous in the valley for his private massages, having them as many as three or four times a week and, in later years, as much as once or even twice a day. The massages often took place in the carriage house that was about three hundred yards behind Michael and Isabel’s home, and were always given to him by women. “Bob always said, ‘I never want a man to touch me,’” Margrit recalls. The massages were a source of occasional dismay to Michael on several levels. For one thing, his father would make these trips to the carriage house but seldom, if ever, stopped to see Michael or his grandchildren. The one time that Michael recalls his father visiting his home after one of his sessions was when he couldn’t get his car started. “I’m out of gas,” Robert told his son. As well, Michael realized that Robert’s habit was well-known in the valley.
Robert’s penchant for massages also led to some entanglements. A young and particularly beautiful massage therapist suffering from cancer once came to speak with the famous vintner at his office in the Oakville winery, accompanied by her father. Robert ended up paying for the young woman’s trip to Mexico, where she sought treatment. When they left, Robert wandered over to Margrit’s office and told her, “I’ve just been had.” On other occasions when Robert became involved in the personal affairs of one of his therapists, Margrit felt compelled to intervene. Usually, the women asked for money, as Robert was an easy target for unscrupulous or needy females.
Timothy also developed a reputation for having an eye for a pretty woman. Like his father with Margrit many years before, Timothy by then was having an affair with an employee of the Robert Mondavi Corporation, and the resemblance between Timothy’s adulterous path and Robert’s was eerie to those who watched it unfold.
In 1985, a highly accomplished chef named Holly Peterson began working for the Robert Mondavi Winery. Then only twenty-five years old, the blond and warmly effusive Peterson traveled around the country for the winery, hosting wine and food events. She was impressively qualified for the job. Not only had she graduated from the University of California at Davis with a degree in enology, but she had gone from there to use her fluent French to earn a Grand Diplôme de Cuisine from the famed La Varenne cooking school in Paris and then spent a year as the first full-time female chef at the Michelin three-starred restaurant Tantris, in Munich. Capping it off, Peterson had an impressive pedigree. She grew up in the valley and came from a family of well-respected winemakers: Her father, Richard G. Peterson, had been the handpicked successor at Beaulieu Vineyards to the fabled André Tchelistcheff and, after clashing with Beaulieu’s new owners, Heublein Corporation, quit and went on to a number of other roles in the industry. Her sister, Heidi Barrett, was also an up-and-coming winemaker.
It’s no wonder Holly Peterson caught Timothy’s eye: With her green eyes, slender figure, and a relaxed yet lively ability to communicate a passion for food and wine, she was a rising star in the culinary world. Dorothy, on the other hand, had spent the decade and a half since she and Timothy married delivering and raising their five children—Carissa, Chiara, Carlo, Dominic, and Dante. Dorothy wasn’t as young, as self-assured, or as glamorous as Holly Peterson, and some members of the extended Mondavi clan, as well as some staffers, wondered unkindly, in an echo of the criticism years earlier of Margrit, whether Peterson had consciously set her sights on marrying Timothy as way of adding the prestige of the Mondavi name to her own.
That view, however, suggests that Timothy was a passive recipient of Peterson’s attentions, while in fact Timothy and Holly courted each other at the winery and at industry events. During a trip to Europe in 1989, Timothy, Dorothy, and Holly all went. Timothy and Holly would occasionally dine together without Dorothy, leading employees to wonder if they were having an affair. By the early 1990s, Timothy was making it clear to people at the winery that he was serious about ending his first marriage. As the family members and all of their spouses received legal counsel about their shareholdings in preparation for the IPO, Timothy was insisting that the shares were solely his property and not his wife Dorothy’s. Timothy would later maintain that he formally separated from Dorothy on June 1, 1992—more than a year before the company went public—whereas Dorothy maintained the separation took place more than three years later. Holly, meanwhile, recalled that her and Timothy’s “committed monogamous relationship” began the same year Timothy said he separated from Dorothy—in 1992.
But the problems in the marriage had begun much earlier and the ongoing tumult in Timothy’s private life proved awkward and embarrassing for some Mondavi staffers, just as Robert and Margrit’s affair had more than a decade earlier. Unlike Robert and Margrit, who had kept their affair discreet for years, Timothy’s open affair with Peterson seemed to some insiders to humiliate his wife. That, in turn, further corroded the respect he commanded at the company, and Robert voiced his criticism of his younger son’s behavior toward Dorothy to some of his top executives, as well as to a new psychologist-turned-management-consultant named Alan Schnur, who informally helped counsel some family members for a period. Compounding the situation further, Margrit took Dorothy under her wing and helped arrange for her to work on a volunteer basis at the Oakville winery, serving as its historian. With Dorothy installed at a desk near Timothy’s office and Holly Peterson working out of the Vineyard Room across the lawn, the situation resembled a daytime soap opera.
Less than a two hours’ drive to the south of Napa Valley, a flood of young executives in Silicon Valley made millionaires on paper by stock options were also breaking the rules of conventional corporate conduct. Most famously, W. J. Sanders III, the chief executive officer of Advanced Micro Devices Inc., threw a twenty-fifth anniversary party attended by eleven thousand employees and family members, California’s governor, thirty-six magicians, and the British rocker Rod Stewart. The star of the party was Sanders himself, who grew up poor in Chicago, and found himself hoisted to the stage on a cherry picker amid fireworks, a rendition of “The Star Spangled Banner,” and shouts of “Jerreeee, Jerree.” It was a period of exuberant optimism, but one that, at least in Silicon Valley, tended to celebrate self-made millionaires, rather than those who inherited their wealth and positions.
The Mondavis, on the other hand, were inheritors. They had gotten their start through Cesare and Rosa Mondavi’s hard work. Although Robert was a first-generation American, his offspring had comfortably settled into the right universities, clubs, and paths laid out for progeny of the upper class. By the third generation—Michael, Marcia, and Timothy—their father’s wealth and success had turned them into royalty in the small realm of Napa Valley. Robert was genuinely respected for his passion and hard work, but not everyone felt the same regard for his children. Some Mondavi employees, for instance, would call Michael and Timothy members of the “Lucky Sperm” club.
When the opportunity arose for the Mondavis to associate themselves with other members of the international wine crowd through a new organization called Primum Familiae Vini—Latin for “first families of wine”—they were among the earliest members. The idea for the group was hatched by Miguel Torres, of the Spanish family that had been cultivating vineyards since the seventeenth century, and Robert Drouhin of Burgundy, in 1990. The Mondavis, Italy’s Antinoris, and Britain’s Symington family were the next to sign on when the organization formally got off the ground in 1993. The Mondavis recruited the Baroness Philippine de Rothschild, and eventually membership was limited to a dozen families who positioned their group as an exclusive wine aristocracy.
The Mondavis were the sole American representatives of Primum Familiae Vini. Aside from fabulous black-tie dinners and the opportunity to rub elbows with European aristocrats, the group’s stated goal was to help one another with advice on how to successful pass a family business down from one generation to the next. Contrary to the bootstrap mentality of Silicon Valley, the Mondavis were embracing Old World values and seeking guidance on a question that Michael, in particular, had become preoccupied with: How to build a family dynasty?
The logical disconnect between family ownership and Wall Street’s short-term demands troubled some Mondavi employees. As the family gathered its Oakville staffers together in the bottling room in the spring of 1993 to explain why it had decided to take the company public, it naturally attempted to spin the news as a positive development in their evolution as a family and a company. Michael took the lead, but Robert, Margrit, Timothy, and even Marcia, who had flown in from the East Coast, were also there. Cliff Adams and Greg Evans also spoke. Their message was that the family would retain control of the company and that not much would change once they’d brought in additional shareholders.
That message rang false to some of the hundred or so employees in the room that day. And staffers couldn’t help noticing some other small, but subtle, changes taking place as the family prepared to take the company public. Around that time, Michael cut off the little ponytail that he had been sporting in keeping with his “rebel son” image of the past few years. His “rat’s tail” made sense when he was wearing his black leather jacket and roaring through the valley on Highway 29 astride his Harley-Davidson motorcycle with a group of other “RUBS” (rich urban bikers), but that bad boy look was out of step with the solid, reliable image that Wall Street valued. What’s more, it didn’t fit in with the rarified circles the Mondavis were now traveling in with the Primum Familiae crowd. More practically, he found it difficult to rest his head comfortably on airplanes when his hair was tied back with a rubber band.
For Robert, who had hated Michael’s rat’s tail all along, the decision to chop it off came none too soon.
Robert’s ongoing role in the “Mission” posed a challenge when it came time for the Mondavis to do their road show. The bankers from Hambrecht and Quist, and Goldman, quickly realized that although Robert was by then an iconic pitchman for Napa Valley wines, he also had the unfortunate tendency to stray off script. Their solution was to minimize his role during the two-week trip to sell analysts and investors on the idea of buying shares in the company. In one or two of the cities the group visited, Robert introduced his sons. But generally, the tightly written formula was that Michael emphasized the company’s commitment to marketing its wines through education, Timothy discussed its novel winegrowing techniques, and Cliff Adams focused on operating details of the business. The bankers hoped that by keeping Robert’s involvement in the road show to a minimum, they would demonstrate that the Mondavi family’s succession plan was working and that the patriarch had truly handed off power to his sons.
Michael and Timothy shared the title of co-CEO at the time of the IPO but the investment bankers saw Michael as the more presentable brother in terms of his grasp of business issues and ability to communicate the company’s message to investors. As well as being a polished public speaker, Michael also was more comfortable in public settings than the more introverted Timothy. The bankers also tried to control the sales pitch by starting off with a video that opened with a shot of Robert in the vineyards, explaining, “Ever since I was a child I wanted to excel….”
Yet despite the slick multimedia presentation and the coaching they received from the bankers and their own executives, the brothers couldn’t entirely conceal their animosity toward each other during the road show. When one would answer a question, the other would get up, walk away, roll his eyes, or yawn. Despite the years of counseling and the attempts on the part of psychiatric consultants and business experts to help them align their goals, they couldn’t completely disguise their differing world views. Michael would speak passionately about Mondavi’s plans to become a global leader in the wine industry, while Timothy made it clear he preferred slow, steady growth. The analysts and investors who came to hear them talk may or may not have noticed the signs of trouble, but Goldman decided to price the shares toward the lower end of the range that it had originally suggested, perhaps sensing the family discord.
The pricing decision may also have been influenced by a skeptical story in Forbes magazine that ran three days before trading in Mondavi stock began. It doubted whether MOND would prove a smart investment: “Tempted to buy a few shares? Here is a better suggestion. Marvin Shanken, publisher of the influential Wine Spectator magazine, suggests buying a case or two of Robert Mondavi’s Reserve Cabernet Sauvignon 1986 at around $35 a bottle. If California wine prices rise, the bottle’s value should keep pace. And if the business goes sour, you’ll still have something to cheer yourself up with.”
On the morning of Thursday, June 10, 1993, Michael, Robert, Timothy, Marcia, and Cliff Adams converged in lower Manhattan and made their way to Goldman’s trading floor to see for themselves the first public sale of their company’s stock on NASDAQ, the electronic exchange where Microsoft and Oracle were also traded. The family felt so optimistic that the offering would be a success that it arranged for Mondavi-produced sparkling wine—made in limited quantities and only uncorked for special events—to sit chilled in ice buckets, ready for them to toast their triumph.
They were tense as they stared up at the ticker, waiting for MOND, their stock’s symbol, to roll across it for the first time. Priced initially at $13.50 a share at the insistence of Robert, who was optimistic that it would soar even higher, the stock quickly jumped to $14.25, then began falling. Goldman ended up buying much of it to buoy the price and avoid embarrassment. MOND ended the day selling for $13 1/8 a share. Closing below its initial offering price was a bad omen.
As the Mondavis and Adams jetted back from New York to California, they could not ignore the fact that the offering had not gone according to plan. By selling one million Class A shares, the family raised $12.55 million for itself before expenses. The patriarch sold 400,000 Class A shares, raising $5.2 million, while each of his offspring sold 200,000 shares, raising $2.5 million each. The company, in turn, sold 2.7 million Class A shares. Overall, the IPO raised around $37 million for the four Mondavis and the corporate coffers, far less than the bankers’ projections of $50 to $60 million.
Yet for the first time the Mondavis could instantly access the wealth that had been locked away in the company for so many years. Each of them instantly became multimillionaires not only on paper, but in reality. On the face of it, it was ideal: They got liquidity and retained what seemed like absolute control. At the time of the IPO, Michael and Timothy each had 18.9 percent of the voting power, Marcia, who had put some shares into a trust for her children, had 20.5 percent.
The family put a good face on a troubling start and got down to the business of celebrating that weekend. The hot ticket at the twelfth annual Napa Valley Wine Auction was the black-tie party hosted jointly by the Mondavis and the Rothschilds at Opus One. Four dozen guests in tuxedoes and long evening gowns ascended the steps of Napa’s wine temple, sipped champagne, and sat down to a dinner prepared by the famed and portly New Orleans chef Paul Prudhomme. After the meal, the guests crossed the road to join the more raucous party at the Robert Mondavi Winery, where some of the guests were puffing on expensive Cuban cigars and couples danced to a sixteen-piece band called Steppin’ Out. As arts and society columnist L. Pierce Carson reported in The Napa Valley Register, “Bob Mondavi and his sons were all smiles, pleased with the near sellout of the 3.7 million shares of stock the company first offered to the public on Thursday.”
Carson didn’t report on Timothy and Holly Peterson’s passionate performance on the dance floor, which raised eyebrows, particularly among valley old-timers who had square-danced with Timothy and Dorothy in the 1970s. The weekend concluded with Robert’s annual birthday bash, attended by California governor Pete Wilson. Since Robert could now buy whatever his heart desired, Margrit came up with a novel gift: She presented her husband with a pair of llamas.
Robert’s eightieth birthday celebration continued a few weeks later at Vinexpo, the giant annual trade show in Bordeaux for French wine producers, where the Rothschilds and Mondavis were promoting Opus One. The families hosted a five-hour train ride on the Orient Express to Pauillac, where Opus One would accompany a lavish meal. Dorothy and some of their children went on that trip but Timothy chose to spend his time with Peterson, who was there as a Mondavi employee.
Whatever pleasure Timothy derived from openly declaring his involvement with Peterson proved to be relatively short-lived. By humiliating Dorothy at an industry function and displeasing the rest of his family, who remained loyal to her, Timothy would discover that his behavior would cost him much more than just the loss of his family’s respect.