Executive View by Marshall Loeb: Enterprise in the Valley

Executive View /Marshall Loeb

There is a lot of talk that the small businessman cannot make a mark in these days of high prices, costly credit and crushing competition. Maybe the skeptics and fainthearted should motor to California’s green-carpeted Napa Valley and speak with Joe Heitz, entrepreneur.

Heitz started with almost nothing, and he certainly is no Henry Ford II, but he can say, with Ford’s proud independence, “My name is on the building.” Right in his backyard, in two gray stone structures that are 100 paces from his white frame house, Heitz, Wife Alice, Son David and four hired hands make a product that is sold in half the nation’s states. He is chief executive of Heitz Wine Cellars, which means that he is also vintner, bacteriologist, accountant, marketing manager and occasional lawn mower.

Many professional critics call steely-haired, iron-willed Joe Heitz, 58, one of America’s two or three best wine makers. His 1970 Cabernet Sauvignon knocked off the fabled Château Latour, Château Lafite Rothschild and other French pedigrees in some blind tastings. When French experts sent him a praising letter, he wrote back: “Why don’t you lower your import barriers?” The visitor gets the idea that Heitz would have done well even if he were making caps or car wax instead of wine.

To all aspiring entrepreneurs, he preaches: “I started this business in the 1960s, and in some ways it would be harder to start now—but it also would be easier.” He got a stake by “borrowing from Peter to pay Paul, and then borrowing from somebody else to pay Peter.” A friend put up $5,000. Today, says Heitz, $5,000 is nothing. “On the other hand, it is easier today to get much more money. Now people become instant successes.”

In any enterprise, Heitz believes, the small businessman can excel against the big, rich competitor if he is willing to do several things:

Learn all the technology, says Heitz, who got his own lessons working for a succession of California vintners and picked up the scientific nuances by studying and teaching oenology at California colleges. Don’t give in to adversity, he adds. In his first year on his own, he was struck by an almost biblical series of plagues: early frost, freakish heat, then hepatitis. Friends in the valley pitched in to help him pick and press his crop. “You know,” he muses, “people like to see you succeed. People like to see a family working together.”

Pay attention to the smallest details, Heitz advises. He prowls his winery like a top sergeant making a bed check, looking, listening, sniffing. “You can sense if something is wrong,” he testifies. “Do you hear a knock or a rattle? Maybe an air conditioner has to be fixed. You need good ears.” And, he continues, “people say that the machinery is automatic. Nothing is automatic.”

The entrepreneur must recruit a few loyal aides and work them hard. Young oenology graduates clamor to join Heitz because he is demanding, and he has them do everything. To them, he is a combination of Captain Bligh and Father Flanagan. With Heitz working alongside, they perform every operation: run the crushers and the bottling line, even paint the barrel hoops black because Joe wants them to look neat. His philosophy: “If your place looks like you don’t care, your employees won’t care. And extreme meticulousness is the most important factor in making fine wine.” Or almost any other product.

Finally, the businessman should recognize virtues in remaining fairly small. “If you make a certain-sized batch of a product,” Heitz contends, “it usually turns out much better than if you make three or four times that much.” He intends to level out his own production when it reaches 40,000 cases annually, up from about 35,000 this year.

Joe Heitz has turned down a fistful of offers to sell out to big companies. He prefers to live out an American ideal, working with his family, building his own enterprise. Says Heitz, brown eyes squinting in the California sun: “Alice and I started this business knowing that we would have fewer dollars to spend than if I continued working for somebody else.” Some day they will leave to their heirs a company that is worth several millions. As small producers commonly say, “We live fairly poor, but we die fairly rich.”