The Journey

Farella Partnership

May 1st, 2018

Frank: “There’s no doubt that Realm is the best fit on the planet.”

Scott: “In some ways this is almost destiny.”

In the spring of 2018 Realm entered into a partnership with Frank and Tom Farella of Farella Vineyard. We’ve purchased fruit from Farella, which is in the Coombsville AVA, since 2003. Under this arrangement, Realm adds Farella to its stable of Estate vineyards. We farm the vineyard and work with the wineries that continue to buy fruit from the property. Tom continues to make wine under his own Farella label at the winery on the property. The journey to get here was full of twists and turns, but we are more excited than ever about the future…

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Scott met Frank Farella in 2007, shortly after Scott moved to Napa Valley. They’ve had a personal relationship and also a professional one, as Frank has helped Scott and Realm on a number of legal matters.

Frank: “Scott grew up in the Midwest so he didn’t have a wine background. When he got out of Harvard Business School he latched onto the wine industry. He worked at Motto, Kryla & Fisher (the wine industry consulting firm) which was in the same building as our office (Farella Braun & Martel). I’d done a lot of work with MKF over the years; they were clients. Vic (Motto) said he’d hired this ‘youngster’ and asked if I would take him on as a mentor and help him learn about the wine business. I said sure. About six months later he had blown right by me in terms of his knowledge and skills.”

At the same time, Juan Mercado and Realm had a relationship with Tom Farella and Farella Vineyard going back to 2003, when Juan responded to an ad Tom placed in Wine Country Classifieds to sell some fruit. Juan was the first person to respond, driving up one morning from his nursing job in Oakland in his Honda Civic. He took one look at the vineyard, called his then-winemaker Mike Hirby and told him he had to come see the vineyard. By the end of the day, Tom had agreed to sell Juan five tons of Cabernet.

Tom: “We always had more fruit than we could use in our own wines, and we’d been selling fruit to several large wineries for over a decade. But we’d started to think about shifting to smaller producers. A lot was changing in the valley. We were used to dealing with winemakers, going to growers’ tastings and seeing what they were doing with our grapes. But with consolidation that became rarer, the relationship with our clients was different. I remember one of my last meetings with a big client was at the airport with the accountant. I couldn’t stand it. I hated that our grapes were disappearing into these big blends. So I started to think about how we could get into the artisanal class. I wanted to work with artisans, not corporations.

The Wine Country Classifieds ad was purely a fishing expedition. I don’t remember getting a lot of calls but I do remember Juan wanting to meet out in the vineyard. It was pretty lickety-split. I learned he was a nurse but that he worked at the Enoteca wine shop on the weekends. It was clear to me that he was passionate about wine. He didn’t have a name for his wine yet, they bottled shiners their first year, so I could see it was still this very raw thing. But Juan’s character and his passion got me excited. He called Mike Hirby to come see the vineyard, and they were so excited about this location, this site. And I was thinking yeah, you don’t know shit! You haven’t even tasted a grape or seen a red berry here yet. It was early in the season. But I love your love! How do you say this is going to be great when you don’t even know? But they were really excited and they got a nice piece of ground right next to our block. It was all Cabernet. It started with a few tons and eventually they got some more.

It was fun getting to know Juan and Mike, but there was really no ‘there there.’ Still, my sense was that this is the future. It’s people like this that I need to sync up with. It was palpable that there was a diversion between the old guys and these new ones working in smaller lots. It was more of a Burgundian model than a Bordeaux model. Realm was the first small producer we sold fruit to, and then others followed.”

The Farella Vineyard comprises 28 acres of vines in the Coombsville AVA, a cool, southeastern region of Napa Valley. The hillside vineyard is set against the Vaca Mountains east of the town of Napa with elevations ranging between 300 and 500 feet. The soils comprise layers of volcanic tufa, red decomposed rock and ashy deposits from ancient landslides. There are 30 acres set aside as untouched oak woodland on the property. Frank Farella acquired the property in 1976, and at the time there were very few vineyards planted in the region. But Frank, who’d grown up on a farm, was determined to grow grapes.

Frank: “I grew up with my grandparents in Gresham, Oregon during the deep part of the Depression. My mother and dad divorced when I was about four and we had no money. But my grandfather was a retired musician and had a three-acre farm in Gresham which in those days was way out in the sticks. Now it’s a suburb of Portland. I loved being out on the farm and my grandfather and uncle had about 100 vines on a hillside. They made wine in the barn. It was horrible stuff but it was fun for me.

Much later, after law school, I left a very good job at a major San Francisco firm to start my own firm with two of my friends from Stanford. It was 1962. We had no serious clients or business, just a very close friendship. So I was back on short rations again. After a few years when I stopped having to borrow money I started looking around for wine properties. I’d driven up to Napa many times with my father who had business in San Francisco after the war, and I just fell in love with the wildness up here. In the early 70s I was at a dinner with Bob Sproul and he told me about a property near his in southern Napa. He said ‘there aren’t any vineyards out there, but you might want to take a look at it.’ One thing led to another and lo and behold, this is the place we fell in love with.

There was nothing out here, except one Chardonnay vineyard on east Third Avenue. Everyone we consulted said we couldn’t grow Cabernet down here because it was too cold.”

Tom: “That is a popular narrative for Coombsville. About the cold. But in the proper location Coombsville is perfectly lovely and sunny, especially on the upward slopes. You get down into the valley and it’s much cooler - there’s actually fantastic Pinot Noir just down the street. So it’s truly a case of applying the right varietal to slope and aspect. If you look at all the notable Cabernet vineyards in Coombsville they’re always on these slopes. It’s not the bottom or the top, it’s the middle. The tenderloin. That’s where most of our Cabernet is planted.”

Scott: “I’m really excited about the future of Coombsville. It’s true that when Frank bought it everyone said it was too cold for Cabernet. But now I look at it and think that with climate change it’s quite possible that Coombsville in the 2020’s will be to Napa Valley what Oakville was in the 1990’s. And the fact that Farella is a west-facing slope in a slightly cooler climate region is critical.”

Frank bought the 56-acre site where Farella Vineyard sits in 1976 and began developing the 28-acre vineyard in 1979. Along with a couple of partners he planted Chardonnay, Sauvignon Blanc, Merlot, Cabernet Sauvignon and Syrah, and began selling his grapes to colleagues and wineries he knew through his law business. Eventually he decided to try his hand at making his own wine, driving up from his office in San Francisco every evening and weekend to top barrels and do whatever else needed to be done. After several trial vintages, he made his first commercial vintage in 1985 under the Farella-Park label.

Tom, meanwhile, had also gravitated to the wine industry. With a Viticulture and Enology degree from UC Davis, he worked at wineries in Napa Valley, Sonoma County, Burgundy and Oregon before finally returning to Napa Valley in 1990 to join his father, taking over the vineyard and winemaking duties at Farella Vineyard. Tom became the steward as well as the champion of Farella, using portions of the fruit for his own brand and selling what he couldn’t use to wineries throughout Napa Valley. Partnering with Realm was a turning point for Tom – the point at which Farella entered into the artisanal wine market - but the relationship between Realm and Tom wasn’t always easy.

Tom: “Before Realm restructured in 2011, the winery owed us a lot of money, both for fruit and for some custom crushing we’d done for them back in 2005 and 2006. I was making money on interest on the ‘loan,’ and I had confidence that we’d be ok because I knew that Andy (Beckstoffer) wasn’t getting paid either, and to me that was like brand suicide. So I was betting that it would all be good. But it took a while for it to happen. Eventually, though, Scott came to the rescue of all of us, including Beckstoffer.”

Scott: “In 2016 Frank, Tom and I started having discussions about what the future might look like. Frank Farella turns 89 this year (2018). And Tom has three other siblings. As Frank thought long term about the future of both the property and his family he wanted to provide stability for his kids’ financial future but also find somebody who would carry on the vision of what he’d started with the land.

Obviously it wasn’t just an economic question, but an incredibly emotional one as well. Tom’s siblings aren’t very close to the vineyard or the wine business, but Tom is completely invested in it. I asked over lunch one time – how were they thinking about the future? A few months later Frank called me and said ‘I’ve been thinking a lot about what you said. Can we get together?’”

Tom:“When Scott started talking to my dad and me, I couldn’t say no because it’s not just about me. I’ve always tried to respect my siblings’ stake in the game, and I’m really grateful they weren’t always making demands of me. I’ve always said I wanted a big brother. For the last 30 years, I’ve had the weight of this operation on my shoulders. I’ve been pushing this rock up a hill a long time. It’s been hard; it’s been a struggle. If there’s a hailstorm or a fire or if the economy falls apart, it’s on my shoulders.

Plus, I’ve put all my focus on the estate. My career has always been about the estate, not so much about the winery or the business or me. I’ve always focused on the quality of the property, the technical aspects and the long range planning. The reputation of our vineyard was everything and I’m proud of my track record in terms of building up its value over time. I know that if I’ve built the reputation of this place I’ve done something powerful.”

Over the next year or so as we negotiated with Frank and Tom, it was clear it was going to be both simple and complex at the same time. Simple in the sense that we all knew each other so well and trusted each other implicitly. Complex in the sense that we were essentially structuring a partnership between people with different needs over time. The talks fell through several times.

Scott: “Frank was worried about starting down this path because it could affect our personal friendship. And I understood that. We had difficult negotiations over certain things but there was never a time when we couldn’t speak candidly to each other and work it out.”

Eventually an agreement was reached, allowing Frank to remain in his home on the property as long as he’d like, and Tom to continue working with Farella fruit for his own label. We know the vineyard needs to be replanted and we are counting on Tom’s insight and perspective to help guide us. This is truly a collaboration on both a professional and personal level. We know this property is special, and together we want to help steward this land through its next evolution.

Benoit: “It’s a thoughtful transition, and I believe it will show in the wine. It’s been the same with Hartwell and now Farella. Both transactions were done on the basis of emotion and respect. It’s much richer than just writing a check. And now we get to take care of the land. It means so much more when it’s done that way.”

Frank: “We’re sharing the property and it’s a wonderful union we’ve been able to forge. Scott loves this land as much as we do.”

Scott: “The path to where we are now was so similar to Hartwell, in the sense that in that case Benoit had the long relationship with the Hartwells and Realm taking control of that vineyard seemed like it was meant to be. Here it was my long personal relationship with Frank that pushed it along. It seems like destiny.”

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