The heirs to one of the nation's most prominent winemaking families are branching off from their family's Sonoma-based wine company to grow the business in new directions.
The three children of Don and Nancy Sebastiani will soon become sole owners of The Other Guys, the higher-end division of the family's successful negociant wine company, Don Sebastiani & Sons.
Creating an independent company will allow it to explore new wine markets while giving the three Sebastiani children greater independence.
"My dad's always had the desire to give us separate things to do so we're not fighting over the same piece of meat on the plate," said Donnie Sebastiani, 32, the eldest child and head of Three Loose Screws Wine Company, the main wine division of Don Sebastiani & Sons.
Three Loose Screws owns the popular Smoking Loon and Pepperwood Grove brands, among others. The wines generally sell for under $10. The company, which purchases bulk wine from other wineries and markets it under its own label, sold 1.7 million cases of wine last year.
That's down from 2 million cases the previous year, a drop attributable to price increases of about $1 per bottle on most of its wines, Donnie Sebastiani said.
The drop in sales was "a speeding ticket" given to a young company that had grown too fast, and a sign it needed to regroup to set the stage for the next phase of growth, said Don Sebastiani Sr., 56.
Spinning off The Other Guys will let Donnie focus on rebuilding the large wine division while giving his brother, August Sebastiani, the space to experiment.
"The big company has grown up and Donnie, who is the most grown-up of all of us, has been given the keys to the grown-up company," said August Sebastiani, the 29-year-old president of The Other Guys.
The smaller scale of The Other Guys will give him more freedom to try novel marketing ideas, he said.
"We kind of enjoy making mistakes," he said. "This way, if we were to fall, we don't fall that far."
The Other Guys division began several years ago as a way for the company to sell new wines directly to restaurants and retailers, bypassing powerful distributors and reaching new markets. The venture struggled initially.
"There was one point where I would load up the way-back of my Tahoe and drive down to Monterey and hit three restaurants and head home," August Sebastiani said. "Not terribly efficient."
The company later dropped its direct sales model and switched to selling wine through distributors, though with a separate sales force and different distributors than its parent company.
The strategy is one that had worked well in the past for Don Sebastiani Sr., a savvy marketer with a long history of creating new wine brands for different markets.
While running Sebastiani Vineyards, the winery established by his grandfather Samuele Sebastiani in 1904, Don Sebastiani Sr. partnered with brother-in-law Roy Cecchetti to create a fast-growing portfolio of value wines. The wines, which included the popular Pepperwood Grove label, were largely sold in different markets by different distributors.
Consolidation among alcohol distributors in the U.S. makes it harder for individual wineries to command their attention, and tough for wineries to accomplish all their goals with a single distributor, Don Sebastiani said.
"With one house, I can't get new things done," Sebastiani said.
In recent years, however, The Others Guys' network of separate distributors has been expanding. Its sales volume has increased significantly, to about 110,000 cases this year, Sebastiani said.
"It has finally now started to kind of pull off the runway, to get its own traction," Sebastiani said.
The company has been an incubator for nontraditional marketing ideas, launching brands with off-the-wall names such as Hey Mambo and Plungerhead and embracing new packaging like screwcaps and Zorks, an alternative type of closure.
That will likely continue, with The Other Guys being a place for research and development and the Three Loose Screws division focused on being a robust, professional wine company, Donnie Sebastiani said.
"Dad sees the future of The Other Guys as being a little more of the spaghetti-against-the-wall division," he said.
Employees of the two companies will be "selling competitively, but lovingly" to avoid conflicts, the elder Sebastiani said.
"Which means when you go into the store and you build a display for one of these companies and it has to be at somebody else's expense, you don't go after your cousin or your brother. You go after the guys that are not related to you," he said.
The move may also be an effort to head off the kind of rivalries that have caused the Sebastiani clan so much strife over the years.
In 1986, the late Sylvia Sebastiani fired her oldest son, Sam Sebastiani, from the family business and put Don in charge, igniting one of Wine Country's most infamous family feuds.
Sam Sebastiani and his wife, Vicki, started their own winery, Viansa, but it foundered after they turned the Tuscan-style winery over to their seven children, who struggled to work together. Both Sebastiani Vineyards and Viansa have since been sold.
Just how much distance Three Loose Screws and The Other Guys will put between between themselves remains to be seen. The separation isn't expected to be finalized until the end of the year.
The plan calls for The Other Guys to be wholly owned by Donnie, August and their sister, Mia, 22.
August will focus on the wine side of the business, while Mia Sebastiani will concentrate on growing a line of food products under the label Mia's Kitchen, which currently sells a line of sauces.
The company will get its own offices, but the digs will be familiar ones. The Other Guys will move into existing Don Sebastiani & Sons offices overlooking Sonoma Plaza, just a block away from the Don Sebastiani & Sons headquarters.
In the end, how much independence The Other Guys can achieve may depend on how much control their father is willing to relinquish.
Even though Donnie is the one running Three Loose Screws, his father admits it can be hard to remain in the background.
"I call him every day with 15 ideas," he said.
You can reach Staff Writer Kevin McCallum at 521-5207 or kevin.mccallum@pressdemocrat.com.
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