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Friday, Mar 29, 2024

Agua Dulce Au Vin

Agua Dulce Au Vin Fed up with the development business, some entrepreneurs and their families begin bottling their own wines near the Santa Clarita Valley. By JACQUELINE FOX Staff Reporter In 1999, an insect known as the glassy-winged sharpshooter began poisoning the vines at wineries in Temecula and throughout Southern California, making it appear to be a dubious time for two well-known Valley developers to get into the wine business in, of all places, Agua Dulce. That year, and the two that would follow, would prove to be especially troubling for California vintners as the critter continued to wreak havoc on the region’s wine industry, already struggling against a weakened economy. Gov. Gray Davis just recently allocated roughly $7 million in relief funds to help vineyards recover from the losses. But Don MacAdam and Ray Watt had committed themselves to turning what began as a business plan written on a cocktail napkin into a full-fledged career change. And this wasn’t just about harvesting a dream: starting a winery, they believed, represented the best opportunity to create a legacy and future business for their children and their families. “There’s just something about grapes, I can’t quite put my finger on it,” said MacAdam, a Woodland Hills native. “It’s in the soul, and knowing that you are creating something you can pass on to your children makes this whole venture all that much more worthwhile.” At the south end of the 90-acre Agua Dulce Vineyards off Sierra Highway near Santa Clarita sits a 61-home community called Sierra Colony Ranch, just one of many equestrian-style projects Watt and MacAdam developed over the last two decades. This one opened in 1995. Phase II of that project called for an additional 85 homes and they would have gone up right where the grapes now grow, had the two not decided they’d had enough of homebuilding. “Basically, we got to the point where in the late ’90s the market was real sluggish,” said MacAdam. “It just looked like a nice time to change careers. I decided it was time to get out of development and all the red tape that goes with it. It was just getting too goofy.” The land, owned by Watt, it turns out, is perfect for growing grapes. Agua Dulce’s nighttime temperatures are too chilly for the sharpshooter and, given its warmer days, grapes thrive on the dramatic temperature shifts. “We sent samples of the soil here to the California Food Growers Association and they said it was perfect soil for wine,” said MacAdam. “They said it tested out at the same level as Napa did 20 years ago. And, as far as the climate goes, it couldn’t be better. We get a 30-degree difference in temperatures here between night and day, so the insect that has been creating so much damage isn’t found here.” MacAdam’s wife, Cathy, oversees marketing and daily operations for the vineyard, which is now producing 13 varietals, ranging in price from $14 to $24 a bottle. The couple and their four children live on the property and run the vineyard practically as a 24/7 operation. “That’s another advantage to this business,” said MacAdam. “Like all growers who live on their farms, we get to spend more time with our families. But it’s pretty much a non-stop operation right now.” They’ve hired French winemaker Jim Yerkes, who has worked at some of the state’s top vineyards, including Glen Ellen, Sonoma Creek and Stag’s Leap, and recruited a well-known vineyard manager to oversee a staff of 20 workers. There are risks inherent in the viticulture business aside from bugs, and Mother Nature poses the bulk of them. But so far she’s been kind to Agua Dulce, which gets roughly 1,000 visitors every weekend. MacAdam is projecting revenues for 2002 of roughly $2.5 million, about half of what it cost to start the winery. Those numbers translate into about 13,000 cases for the year at about $200 apiece. Pretty nice production work, considering the land, known as “the old alfalfa field,” lay untouched and overgrown for more than six decades. “Those are nice numbers for what I would consider to be a medium-sized winery,” said Paul Kronenberg, president of Family Winemakers of California, which lobbies for the industry in Sacramento. He said there are about 850 licensed wineries in the state and that a handful of family-run wineries crop up in California every year. Most, he added, never make it through their first five years in business. “Broadly speaking, opening a winery is very capital-intensive,” said Kronenberg. “And the wine marketplace, especially here in California, is very competitive. Roughly 95 percent of all the wine produced in the United States is produced in California, so if you are a brand new winery, you are competing against a whole lot of established brands. The biggest, of course, are producing as many as 8 billion barrels a year.” Although sales for Agua Dulce look strong for the year, the industry, said Kronenberg, is actually in a mini-slump, especially in Southern California, where biochemists have joined the fight to permanently eradicate the sharpshooter before it moves north to Napa. “This is a product that is demand-driven,” said Kronenberg. “And we’ve had two big harvests in a row for the last two seasons, so there’s a lot of wine out there. The economy slowed down last year as well and wine is often a discretionary purchase, so it’s typically one of the first things to go when money is tight. All things considered, the wine industry here and across the country hasn’t been as robust as it was a few years ago.” Agua Dulce produced 160 barrels in 2001. A barrel holds about 59 gallons, or about 24 cases. MacAdam said he’s aiming to produce about 600 barrels this year. The maximum yearly yield for Agua Dulce, he said, is 37,000 cases. Vines planted in 1999 should be able to produce that amount for the next 100 years. But don’t look for the Agua Dulce label on grocery store shelves anytime soon. For now, it’s only available in the retail shop at the winery, or through the Agua Dulce Wine Club the vineyard’s primary revenue source. (Retail sales from the store and tastings make up about 15 percent of revenues.) “We’re not structured for a wholesale business,” said MacAdam. “We are the only winery that’s close enough to get people in Los Angeles, and especially the Valley, to come out here to buy. So we knew early on that wine club membership was the way to sell.” Agua Dulce has 1,700 club members, which MacAdam said is higher than membership at more than 60 percent of the wineries in California. There’s no fee to join, but club members must commit to buying six bottles of wine each quarter. In turn, they get a 15-percent discount on wine, a 10-percent discount on store merchandise and four free tastings a year. Agua Dulce has a small meeting room for corporate events and the vineyard has invested heavily about 10 percent of its revenue in a mass advertising campaign, including radio and TV spots. “That’s a very high figure for advertising, but it’s paying off,” said MacAdam. “We have mostly targeted the San Fernando Valley, and that’s exactly where most of our visitors are coming from.” Li’Shey Johnson, a sales assistant at Morgan Stanley in Calabasas, said she has booked more than a dozen corporate events at the winery since it opened last October. “One of my duties is to find places where the financial advisors and clients can socialize that would be unique and entertaining, but still provide an opportunity for them to interact,” said Johnson. “Agua Dulce is unique in that it is a winery, which is a real rarity in Southern California.” If sales are on target this year, the winery may soon begin an expansion plan. There are still 50 acres of land yet to be planted. “We have plenty of room to grow, but we don’t want to move too fast,” said MacAdam.

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