August 1, 2003
Uncorking A Growing Business
After 30 years of business ownership, Iris Rideau looked forward to spending peaceful days on her picturesque five-acre estate in California’s Santa Barbara County. But at the last minute, she realized the sedentary life was not for her and so, in 1997, Rideau Vineyard was born.
With 2002 revenues of $1 million and projected 2003 revenues of $1.4 million, Rideau’s decision has certainly paid off. The boutique winery, which has eight full-time employees and produces 6,500 cases a year (78,000 bottles of wine, retailing at $18 — $36 per bottle), has won several awards for its premium beverages including Best of Show in the 1998 New Orleans Wine Competition. Wine Spectator magazine also acknowledged the vintner for wines produced during her 1997 and 1998 seasons. Until her vineyards produced their own grapes, Rideau had to purchase them from other producers.
In 1995, Rideau purchased 25 acres of land that contained an abandoned 19th century adobe farmhouse, designated a Santa Barbara County historical landmark. Initially, she planned to turn the crumbling structure into a bed-and-breakfast but zoning laws would allow only a museum or wine-tasting business. Set on developing the property, Rideau hired a land-permit consultant, who helped her decide to develop a tasting room and vineyard. “I knew absolutely nothing about running a winery,” admits the three-time business owner, who relied on her previous business acumen to create her seven-year plan, a necessity for winemakers. “But I’m a firm believer in hiring the best talent I can afford to help me accomplish my goals.”
Using some of the proceeds ($2 million) from the sale of her prior business, I.C. Rideau Securities, Rideau set about the dual tasks of restoring the crumbling 1884 county landmark to its former Victorian glory and developing the adjacent 15-acre vineyard. The vineyard cost approximately $25,000 per acre over four years to develop and maintain. Since she had no winemaking experience, she also hired a seasoned winemaker. Her biggest expense was purchasing wine barrels, holding tanks, a grape press, and grapes. “My vineyard didn’t produce grapes until 2002,” she explains of the pricey business venture. “You’re actually planting and maintaining the vineyard while you’re buying grapes, which is the hard part.”
Rideau, 63, used her skills as an accomplished Creole cook to prepare homemade dishes of jambalaya, gumbo, and crawfish Ã©touffÃ©e to attract tasters. The spicy dishes, accompanied by Rhone varietal wines, including Syrah, Roussanne, and Viognier, gave Rideau’s tasting room the edge it needed to compete with the more than 40 wineries dotting her Central Coast location.
But even in the midst of overwhelming success, Rideau faced many challenges with her undertaking, the most difficult of which was making the decision to drop her wholesalers. “I learned the hard way that wholesale doesn’t really work for small labels,” says Rideau, who lost significant profits when she sacrificed half her retail price to increase distribution. In March, however, she retook control and now sells her wines exclusively from her tasting room and online.
After five years, Rideau, who frequently works 10 to