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EXIT STRATEGIES

Efforts to Save New York Winery Prove Fruitless

Facing frost and bad weather, a Long Island winery fails for lack of cash.
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THE BUSINESS: Maker of premium chardonnay, merlot, cabernet, and riesling wines

FOUNDED: 1979 CLOSED: 1996

PRIMARY CAUSE OF DEATH: Bad vineyard land

SECONDARY CAUSE OF DEATH: Lack of cash after new owner acquired business

Since planting its first vines, in 1979, Bridgehampton Winery distinguished itself as an elite upstart in the small but growing wine region on the East End of Long Island. Forty neighboring vineyards and 16 wineries have thrived in the area in the 1990s, adding to New York State's increasing importance as a major American wine region, second only to California in gallons produced. But the Bridgehampton, N.Y., winery was forced to close on September 30, 1996, because neither its vineyards nor its bank account was green enough to keep the operation growing.

"I felt we should always aim high in our wine-making style, positioning, and imagery," says Lyle Greenfield, the advertising executive from New York City who started the winery. To do so, he brought in wine maker Richard Olsen-Harbich, a viticulturist trained in Europe; invested in a sophisticated fermenting process; and designed striking labels featuring paintings by well-known artists. The strategy landed the wine on lists at Manhattan institutions like 21. The winery built up a healthy retail and direct-mail clientele as well, and it earned more than 150 quality awards.

But bad weather dogged Bridgehampton. "The land was a frost pocket," says Greenfield, "a low spot in an otherwise lovely agricultural area, and it would prove inhospitable to fine grape growing." As a result, Greenfield harvested only eight modest crops in 15 years. Still, while the vineyard floundered, the winery continued production with other vineyards' grapes. The results were good enough for the Wine Spectator to rank Bridgehampton's 1988 chardonnay among the region's finest.

Greenfield continued pouring money into the venture, spending roughly $600,000 on the vineyard land and putting another $600,000 into the winery's installation and maintenance. "Often vineyard owners just don't have enough money to keep their operations running long enough," observes Professor Stephen Mutkoski, a wine expert at Cornell University. "It sometimes takes 5 to 10 years to reach the volume necessary for them to sustain themselves." Still, only 4 wineries out of 20 have failed on Long Island in the past 25 years. Although Bridgehampton's annual sales were around $400,000--a figure many of its competitors would have envied--it was desperate for capital by 1993.

That year Greenfield and Olsen-Harbich, who now owned 10% of the company, decided to sell the winery label, name, inventory, and equipment to Peter Carroll, who'd had experience turning around another winery. Though Bridgehampton's inventory was valued at more than $200,000, Carroll bought the winery for $150,000.

Despite Long Island's exceptional weather, bountiful harvests, and burgeoning tourist industry, the winery slid closer to failure. When Bridgehampton's lease on the facility expired, last year, Carroll liquidated the winery's assets and turned his full attention to the Lenz Winery, in Peconic, N.Y., which he also owns.

Greenfield, who has since cofounded an advertising music-production company, is mournful. "I thought Carroll saw the value of Bridgehampton's goodwill, label, and reputation, and where it could be taken with the proper capitalization and management," he says. "The effort seemed halfhearted, as though they were just filling bottles, slapping on labels, and collecting some cash."


Resources

LYLE GREENFIELD, Bang Music, 16 W. 18th St., New York, NY 10011; 212-242-2264 26

STEPHEN MUTKOSKI, E-8 Publications, 121 E. Remington Rd., Ithaca, NY 14850; 607-257-7610 26

RICHARD OLSEN-HARBICH, P.O. Box 1207, Cutchogue, NY 11935 26

Last updated: Aug 1, 1997




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