Gundlach Bundschu retools in Sonoma Valley for next generation in wine industry

As Jeff Bundschu thought about the field of longtime family-owned wineries in Sonoma County, he noted the group is shrinking again in a wave of consolidation.

Already this year, the Coppola and Kunde families have sold their wineries to bigger wine companies joining the ranks of his Sonoma Valley neighbors Bruce Cohn and Richard Arrowood that opted to sell years ago.

The 53-year-old Bundschu — with his unmistakable blond locks that dip to his shoulder and hip black glasses — is charting a course so that his family’s winery will be able to avoid such a fate.

After all, the Gundlach Bundschu Winery has navigated many obstacles since Jacob Gundlach bought 400 acres in Sonoma in 1858, from Prohibition to poor harvests to the 2017 Nuns fire that perilously encroached on its property. Such a track record, however, is no guarantee in today’s volatile marketplace of mergers and acquisitions.

A sixth-generation farmer, Bundschu already carved out a solid side business with concerts on the winery’s property that led to its annual Huichica Music Festival. It’s featured notable indie bands such as Yo La Tengo and Robyn Hitchcock and spawned a sister festival held in New York’s Hudson Valley. But he realized that wasn’t enough.

“I was getting more and more serious about this diversification pathway. It’s the kind of successful generational evolution to make sure that you have a diverse enough business to keep family and people interested and also be nimble,” said Bundschu, who was named president of California’s oldest family-owned winery in 1999, succeeding his father, Jim.

That has led to major changes for the family business, under the umbrella of the Bundschu Co., which employs 135 people and has 260 acres of vineyards. They were made before the pandemic but are now poised to show results with visitors returning to Sonoma County and a wine sector looking to rebound from 2019’s short crop as a result of wildfire smoke damage.

In February 2020, the company acquired the 60-acre former Valley of the Moon property off Madrone Road to serve as the new home of Abbot’s Passage Winery & Mercantile, which is operated by Jeff’s sister, Katie. The sale price was $11.6 million, according to the Sonoma County Assessor’s Office.

That deal complemented an earlier move in December 2019 to bring in his cousin, Towle Merritt, as vice president of operations and general manager of wine brands. Merritt had worked as general manager of Walsh Vineyards Management in Napa and brought those years of knowledge to improve in-house farming and production practices.

Bundschu said that such work wasn’t as much in his skill set and “would have inhibited me from ever going big into that direction.” It also allowed for the formation of the Towle Wine Co. that provides vineyard management and custom crush services to third-party clients and works with some retailers to start private wine labels using the extra capacity at the Madrone Road winery. That site added three times the stainless-steel storage to its overall operation.

As much as the moves were designed to grow the overall Bundschu operation that produces about 40,000 wine cases annually, the changes also were designed to allow family members to explore their passions to carry the business into the seventh generation and make it stand out from the more than 10,000 U.S. wineries. The company is still relatively small in the national industry. It would have to produce more than eight times its current caseload to crack the top 50 largest wine producers.

“Our ambition is to constantly be sort of expressive of who we are, no matter what it is we're doing. And I think that's an edge any small family winery can do if you lean into it,” Bundschu said. “Because it's really hard for big and fast scaling companies to tap into that.”

Bundschu’s ability to handle business aspects, but also familial issues that may crop up while running a family-owned firm has made him a standout in the local wine industry, said his longtime friend Jon Sebastiani.

Sebastiani speaks from experience. His family’s wine business split amid a divorce and sibling rivalries in the early 2000s. In the aftermath, Sebastiani became an entrepreneur in the food business with his Sonoma Brands company and also took over management of Sonoma winery Viansa.

“I find Jeff to be a very collaborative type of thinker,” said Sebastiani, who noted that he considered Jim Bundschu as a second father. “He is one who creates unity … even with his charisma and uncanny ability to do things differently.”

Case in point is Katie Bundschu’s role with Abbot’s Passage winery. She returned to the family business in 2012 and started the winery in 2015 with its first vintage. She opened a small tasting room off the Sonoma Plaza in 2017.

She realized that her father and brother have put their stamp on Gundlach Bundschu, so she wanted to make something different. In local wine history that sometimes isn’t the case with female offspring. Some have had to go out on their own to create a brand. A notable example is Judy Jordan creating J Vineyards & Winery separate from her family’s Jordan Vineyard & Winery.

“It's all about being able to put my point of view on something and also personally to honor all of the people before me and the six generations who were supportive that kept that business going,” said Katie Bundschu, 39, who is the first female winemaker in the sixth generations of her family in local agriculture.

Gundlach Bundschu’s varietals are sourced from its estate Rhinefarm Vineyard. They range from cabernet sauvignon that features the taste of intense dark fruit to its medium-bodied pinot noir, to its dry Gewürztraminer. In contrast, Abbot’s Passage features wines blended and co-fermented with lesser-known varietals such as mourvèdre, carignan and petit sirah.

“AP at its core is discovery and adventure and also yet comfortable and familiar,” said Katie Bundschu, who is expecting her first child in October with husband, Christopher Tynan, who also is a winemaker.

The property has just opened for guests. Abbot’s Passage features a different hospitality experience than Gundlach Bundschu, known as a place for an informal wine tasting in the Sonoma Valley, as well as its tours on Pinzgauer, a Swiss Army transport vehicle that takes guests around the property.

Abbot’s Passage has a kitchen that can provide an immersive food and wine experience. There are outdoor tables residing among 80-year-old zinfandel vines and a shuffleboard court. Inside are various wearable products and other items for sale from female-owned businesses.

“I was adamant that I didn’t want more bocce courts,” Katie Bundschu joked.

Jeff Bundschu said the experience at Abbot’s Passage is more elegant, but one still accessible for guests given the family’s approach to hospitality through the years. This clan doesn’t do stuffy.

“The whole process of growing Bundschu Co. is preserving that approachability that people know starting at Gundlach Bundschu that’s been part of our family for 100-plus years, and then making sure that stays consistent as we grow into different ways,” Jeff Bundschu said.

The Abbot’s Passage property also solves the issue of increasing inventory. The Gundlach Bundschu winery already reached its winemaking capacity limit and was outsourcing up to 30% of its tonnage to outside wineries to keep up, Jeff Bundschu said.

The new winery, which includes a dedicated bottling line, also opens an opportunity to reach winemakers who don’t have their own space to crush their grapes and make wine, adding another stream of revenue to the Bundschu family business. The Glen Ellen location is ideal for winemakers in Sonoma and Napa counties to transport their grapes and ferment their wine.

“It's kind of a cross functionally with the geography of where we're located. You look at Napa and Sonoma counties and you just put your finger right smack dab in the middle is Glen Ellen. So I think we're in a very opportunistic area,” Merritt said.

Merritt and Bundschu intend to reach out to their business contacts they accumulated through the years to help provide more personalized service that vintners may not get elsewhere at custom-crush facilities.

The Bundschu company was able to weather the pandemic better than other wineries as all were forced to pivot more to digital sales. The family company’s leader credited a detailed consumer database, so his employees could reach out with sales pitches directly to consumers. That was crucial after bar-and-restaurant dining temporarily shut down last year and still has not fully recovered.

“We've been maniacal about collecting consumer data to the point it was almost as important as the sales,” Jeff Bundschu said. “We did pretty well when we came out of it (the pandemic).”

The pre-pandemic business changes have positioned the historic Sonoma wine company to take advantage of future growth and remain independent. For example, the Huichica Music Festival already has expanded into Walla Walla, Washington, which is another significant wine region.

“We have ambition to broaden our national portfolio here in the next three to five years,” Jeff Bundschu said.

You can reach Staff Writer Bill Swindell at 707-521-5233 or at bill.swindell@pressdemocrat.com.