John Dyson of Millbrook Vineyards & Winery
JOHN DYSON'S CV DOESN'T HINT that his ambition was to establish and promote a winery in the Hudson Valley. A Cornell graduate in agricultural economics, former New York State Commissioner of Agriculture (1975) and Commissioner of Commerce (1975-79), he was directly responsible for the Farm Winery Law of 1976; his "I Love NY" campaign, developed while he was Commissioner of Commerce, has been one of the most successful advertising branding campaigns anywhere. The success of Millbrook Vineyards and Winery (now part of Pebble Ridge Vineyards & Wine Estates, a wine group Dyson created) and its position as one of the preeminent wineries in the state, though, was almost 25 years coming. Still, Dyson, now 63, has no plans to retire. His privately held manufacturing company, with facilities in the U.S., Mexico and Thailand turned out turbochargers and specialty electrical cords (with revenues upwards of $250 million). As he sold off some of the business, Dyson reinvested his money in wine properties here and abroad, including Mistral Vineyards and Vista Verde Vineyards in the North Central Coast, California; Villa Pillo Estate in Tuscany, purchased in 1989; and the prestigious Pinot Noir label, Williams & Selyem, in the Russian River Valley, purchased in 1998. (To avoid a bidding war and squelch competition before it even appeared, Dyson offered the Williams & Selyem sellers $9.5 millionmore than they were asking.)
John Dyson: You know, in the beginning of a winery you don't make any money. You're planting vineyards, you're refixing the barn, you're buying machinery. It's a long-term deal. The Italians say you plant a vineyard for your children, and you plant an olive orchard for your grandchildren.
When we started 20 years ago, none of the people around here really grew grapes. We didn't know what rootstocks to use. We didn't know what tops would work better—like Chardonnay, or Pinot Noir, or whatever. So we began with three different rootstocks. Two of them were wrong—we had to pull them out eventually. We were working on winter hardiness, the right yield, appropriate yield, mature fruit and getting a consistent crop year after year. We found out that certain rootstocks are very susceptible to a bacterial disease called crown gall. Fortunately, one of them did work—an old French rootstock called 3309. (They numbered them. It was row 33, the ninth plant.)
The hurdles [the grapes] have to jump! They have to grow here in the short climate, short summer, and ripen; they have to make it through the winter (they have to do it two, three years in a row); they have to have a yield that is economical (two or three tons per acre); and they have to be something that has some longevity (not going to die in three or four years). A grape vineyard investment is a 15-year, 20-year investment. By the time you do all the trellises and the posts and the plants and prepare the soil, and whatever, it's $15,000 an acre. If you grow corn, it's whatever the cost of plowing, plus a few dollars for the seed.
At the time Dyson started Millbrook there were only a handful of wineries in New York State (there were 9 in 1976). Now there are 212. Growing grapes and making wine has proved to be big business. The retail value of all wine produced in New York is estimated to be $1.1 billion. Overall, the wine and grape industry contributes over $6 billion to the state economy. Dyson bought an old apple farm—turned dairy farm (on which he had baled hay as a kid). He tried raising dairy heifers, then tried raising sheep. He found those businesses unprofitable. By luck and default he started growing grapes.
JD: Originally, we did a lot of experimenting. Nobody had vinifera around here—they had all the old Concords. Ben Feder [of Clinton Vineyards] was one of the pioneers here. He did a French-American grape, Seyval Blanc. And Bill Whetmore over at Cascade Mountain Winery did French hybrids—different ones. He tried to do some reds.
[We decided to do vinifera] because of Dr. Konstantin Frank. He said it could be done. He had a large, successful planting in the Finger Lakes. His father was a professor at Geisenheim, one of the major institutes of viticulture in Germany. He decided to come to America rather than try to compete with his father, who was legendary.
Northern Italians, Alsatians—they get what they think is cold weather—they don't know cold
Dr. Frank was always after me to try an experiment down here, so I said we'll try an acre and see what happens. The first big planting here was just five acres in 1982. We got the plants from Hermann Wiemer, who followed Dr. Frank. (We still get a lot of plants from Hermann—we're old friends.)
We tried Chardonnay, Gewürztraminer, Riesling, Pinot Noir and Cabernet Sauvignon. We tried going through all the Northern Italian. We tried Sangiovese. We tried Nebiolo, Cortese. We tried two or three Swiss grapes. Then we tried Pinot Gris, which is Alsatian. I did research on all the varieties that grow in Northern Europe. Northern Europe includes Austria, so we had Grüner Veltliner. Then we did all of northern Italy, which is where the Tocai comes from. We did Tocai. We did what the University of California said was Cortese, which makes Gavi (but it wasn't—it was red—Cortese is white). It was 30 all together.
The Chardonnay did fine. The Gewürztraminer died immediately the first winter (Northern Italians, Alsatians—they get what they think is cold weather—they don't know cold). The Riesling did fine; however, Riesling is very late ripening. It didn't do so well coming through the winters. You'd have a good crop, then you'd have not such a good crop. In fact, we took out all the Riesling a couple, three years ago. I'm debating what to put back in there.
True story: Bruno Prats [of Château Cos-d'Estournel, France], who's an old friend of ours, came here to just look at the vineyard for fun one day. The plants were all out at the time. "This is our Chardonnay, this is our Pinot Noir, this is our Cabernet Sauvignon," I said, "but this block of Cabernet Sauvignon does really well and this block, it doesn't do so well." What we had planted we got from a nursery. He looks at it. He's looking at the leaves, and he says "This is not Cabernet Sauvignon. This is Cabernet Franc." And he showed me: In the leaf there is a slightly different structure. He said, "Well, it's famous for being able to produce better wine in cooler climates, like Chinon and the Loire Valley. You know, you can make a really good red wine probably here."
Cabernet Franc is the most winter hardy. It's also very rot proof. This year we had all these hurricanes—it didn't rot. We pick Cabernet Franc some years in November. You get a day like this—with some sun, and it warms up a little bit—the grapes, because they are red (or black by then), absorb the sunlight. They warm up. So the ripening procedures inside the grapes go on in a day that's 50 [degrees]. A green grape wouldn't.
Grape is an odd thing. We had a Cabernet Sauvignon that tasted exactly like asparagus. You know, asparagus tastes like asparagus—you cannot get an asparagus that tastes like broccoli. But grapes can taste like cherries, or they can taste like asparagus, or they can taste like plums, or . . . It turns out asparagus can really taste very strongly in a Cabernet.)
What we are putting in [now] is Tocai and Cabernet Franc. We decided there is enough Chardonnay in the world. (There wasn't 20 years ago, but now there is a lot of it from Australia, South Africa, New Zealand.)
If you're making your own winery, you get to make wine the way you like it. Our whites, for example, are partly fermented in [stainless steel] and partly fermented in the barrel. We like very little oak. California likes really big oak—I don't like that flavor.
There is a further hurdle, though, which is marketing. (Try to sell something called Grüner Veltliner!) Tocai is unknown. This one surprised me: Given how famous Cabernet Sauvignon is, why is Cabernet Franc so hard [to sell]? It took us years to make a market for Cabernet Franc, even though it is obviously a Bordeaux-tasting varietal. You would think people would say "Oh well, it's Cabernet." It has made it now.
I had never built a brand. I dealt with companies that had brands. I did the "I Love New York" thing, so I made a brand. But this [winery] is a business I started literally from the ground up. You plant the grapes, you wait three years for a crop, then you make the wine, it ages for a year, then the bottle, then maybe you sell a little. That's five years. And, of course, nobody knows what Millbrook is.
In a little business like this you can't afford to advertise on a scale of "I Love New York," which cost millions of dollars. So you have to do it by public relations, mainly word of mouth. We ask people how they heard of us when they come through the front door—way more than half say some friend or someone recommended us. Building that, I think, takes probably 15 years. It's only the last two or three years that we have become a known destination. It never occurred to me it would be so hard. I just thought, "Well, I make good wine, people will buy it, right?"
Forty of the vineyard's 130 acres are planted, half in Chardonnay, the rest in Pinot Noir, Cabernet Franc, Tocai Friulano as well as some rare varietals—for fun. Winemaker John Graziano has been with him since the beginning. Millbrook Vineyards produces 8,000-10,000 cases a year, supplementing the grapes grown on the estate with grapes from other growers in the region and from the Finger Lakes, Long Island, and even California. 2005 marks Millbrook Vineyards' twentieth vintage. While it may be a big fish in the small pond of Hudson Valley wineries, Dyson views competition among the region's vintners as essential for the success of the business and as a step toward defining the region as a destination.
JD: In New York we have now over 200 wineries, mostly, really, farm wineries. Am I worried about having competitors? Absolutely not. Look at the success of a place like Napa: It has become a tourist destination. The holy grail is to be a destination. People fly from New York to go to Napa. Once they are there, everybody is going to get their share. Maybe you're going to go to Mondavi or Opus One, but then you are driving around and say, "Oh, here's one I haven't heard of. Let's try it." Everybody benefits. If we had more wineries, it would help everybody, including us.
What I think we are missing is a grape.
New York wines, I think, get lost a little bit. Their image was as sweet, dessert wines—not to knock Manischewitz, but that was kind of the image. The Finger Lakes are, for sure, now associated with Riesling, which is unique in the whole country—like Oregon did Pinot Noir. And Long Island is, for sure, associated with Merlot/Cabernet Franc, also Chardonnay. In the Eastern grape area they have made a little bit of a mark with Merlot and Cabernet. Good red wine. That's why we decided, well, OK, we're going to do Tocai and Cabernet Franc. We are also going to continue to make Chardonnay and some of the more oddball grapes, just for fun. Some [come] from California, some from other people. We buy and we grow some oddball ones, like Tocai, ourselves. Nobody else grows them.
You need to have something distinctive so people have in their mind, "I'm going to the Hudson Valley, and more or less anywhere I go there will be a great Pinot Gris," or whatever it is. We need to have some kind of a distinctive grape. I don't think we've found it yet. I personally think it's Tocai and Cabernet Franc, because Cabernet Franc grows better here than it does in the Finger Lakes and, I think, better here than on Long Island. And Tocai is a unique thing—a nicer wine than Sauvignon Blanc (which won't grow here anyway—it's too late ripening, too winter-tender). We have proven that Tocai is very winter hardy, as winter hardy as Cabernet Franc—even in our harshest winters, we get a two or two-and-a-half-ton per acre yield out of Cabernet Franc and Tocai.
We have figured out grape growing, courtesy of a lot of help from Cornell. [The new undergraduate enology program at Cornell] actually was cooked up by the dean, who kept getting requests from wineries who needed more people trained in growing—horticultural people who are trained in the East Coast. These kids from California don't know beans about growing here. [Cornell has] the pomology and viticulture, the microbiology. We have already one apple [research center]; now we have our own enology center. It's terrific.
But it's not only growing the grapes, it's also making world-class, quality wines.
Questions: When is a barn not a barn? Answer: When it sits in the middle of a prime piece of real estate and when it's used to make, store and sell wine, in which case everybody wants a piece of it.
JD: This is a high-cost area to grow grapes. We are fighting with the town—the town is doing a reappraisal and they're going to raise our taxes. Are you ready for this—they sent me a thing in the mail: 130 acres, with the possibility of only one house (not built)—130 acres and this barn: $3.9 million, with the agricultural exemptions. They say, "Well, look at this wonderful view." It's a 20 percent [net increase]. The town supervisors are very proud of the fact that they don't ever raise the taxes. They don't ever raise the rate. [They raise] the assessment. Anyway, I can see why it's hard. We have a high-value crop; maybe apples are higher.
But who would pay $4 million for a building site? You can't do anything here—it's restricted. I put it under conservancy years ago. So it has one house site and this barn. The barn can only be used for agriculture. The zoning is agriculture—you can't build an IBM chip plant here. It's not zoned commercial. I could do a horse farm; someone else could do grapes other than me, I suppose.
This had been always an apple farm. The people who owned it were the Wing family—the father was one of the great dairy farmers. The government asked during World War II, "Please, everybody take out the apples—we need the milk for the U.S. troops overseas and for the American population. We don't need apples." So they took out all the apples. They built this enormous barn in the WWII period, then it burned down in something like 1957 or '58 or '59. They built it back again. One could argue a smart person would keep the insurance money and not rebuild. Anyway, they built it back up again.
We decided, while we were adding on [to the barn], let's make it wide enough so the wine can go through the bottling line, end up in the cases, and then the cases go in storage. The federal government's rules are endless. Among them are you have to keep wine in a bonded area, not because they are worried about us, but because they are worried about their taxes—they don't want to miss a bottle.
What do the bureaucrats want? You have to have a delineated area that's "non-tax-paid" that shuts and a delineated "tax-paid" room—when you take wine from A to B, you are supposed to have paid the taxes. They insist that there's a physical barrier so when you take it from the "non-tax-paid" room to the "tax-paid" room, the door has to lock.
They come and they check the windows and the doors. They had a big problem with this door: [It] locks but there's a window that could be broken—however, it only goes out into a little courtyard, surrounded by the building. We said, "How's anybody going to get in there? Climb over the roof? If you're worried about taking cases and cases of wine, how could they get back over?" I ran several government departments; government bureaucrats have their own way of thinking.
Among the difficulties facing wineries and distilleries in New York State are arcane and archaic laws regarding alcohol sales and distribution, many of which have been on the books (untouched) since Prohibition. Dyson has stood point in the industry's efforts to get the stifling laws repealed, or at least modified to reflect the realities of the twenty-first century.
JD: To give you a little history: In 1962, Cornell was prohibited from doing research on wine grapes by the holdover of Prohibition sentiment in the state legislature. Why? [Because] we have, all along the Southern Tier, very strong northern Baptists, slightly different from southern Baptists. They are against drink. John D. Rockefeller was one. (He grew up nearby Cornell—his mother refused to have alcohol, dancing or music.) So, until 1962, [Cornell] could do research on Concords for Welch's grape juice, but they could not do research on wine grapes. Hard to believe; New York—we all think we're so cosmopolitan.
I actually passed the [the Farm Winery Bill] in 1976, not thinking I was going to go into the wine business. I have to make a disclaimer: I didn't do it out of self interest, I did it because Mark Miller [of Benmarl Winery] said what we need is a farm winery law, and he gave me an example from some other state. We were looking for things to stimulate agriculture, and we put it in. And the legislature said, great idea. So came the Farm Winery Law. None of us had any idea we'd have 200 wineries or that it would be the fastest growing area of agriculture, let alone one of the few that is growing at all.
From then on, we sort of caught up. It took figuring out the grapes, it took figuring out the wine, and it took a legislature that would allow direct shipping.
The open-on-Sunday law? Sell alcohol on Sunday? Scandal!
By this time I was in the Commerce Department. I was Agriculture Commissioner for one year. It was all the same thing to me—it's all economy
Nobody would take the job of Commissioner of Commerce under Hugh Carey because it was considered a hopeless task. He said "You and your father know all these big business people. Help me find somebody—everybody I ask turns me down." I said, heck, I'll do it. My degree is agricultural economics—I can do it.
Why shouldn't a winery be able to sell on Sunday? It's the weekend, when people are touring around. We're going to miss one of our two days of the weekend. So they said, OK. Various church groups yelled and screamed. They passed it anyway, and then the issue became shipping.
You're not allowed to ship—it will encourage drunkenness, surely that's self-evident. That was another year or so. Then, to ship it became clear you had to be able to take credit cards. However, state law prohibited giving credit—you had to pay cash for any alcoholic beverage (because if you give somebody credit, of course it's going to encourage drunkenness). This was all Prohibition—see, if a guy could drink without paying cash, he'd be taking bread out of the mouths of his children in order to have another drink on credit. That was 1983 or '84. Retail stores were not allowed to take credit cards until 1986. They were also not allowed to take a check because a check, until it cleared, is credit. So, you want to buy something from Sherry Lehman, it had to be cash.
I'm not making this up. Who could make it up?
So, credit cards was 1986. Last year, [liquor stores] had the battle of trying to be open on Saturday and Sunday. The mighty state legislature went round and round—you know what they came up with? You can be open either Saturday or Sunday, depending on which one you consider to be the Sabbath, but not both. This is 2005! [Ed note: The law has since been changed to allow opening both days.]
We have longstanding issues, still. Most states don't allow sales of wine in grocery stores. There's an ancient agreement here, dating back to the 1920s, which is that liquor stores could sell liquor but not beer, and supermarkets could sell beer but not liquor. Of course, now there are well-established lobbying groups on both sides. I'm a free marketer: Everybody ought to be able to sell everything. If Sherry Lehman wants to sell a selection of fancy beers, what do we care?
[The shipping case went to] the U.S. Supreme Court. The appellate level in New York said the state is allowed to prohibit shipping. Michigan took the opposite view. So this was primed for the Supreme Court. I was the expert in the New York State case. I have to say, we thought we had it five-to-four, but we weren't sure, because they are impossible to predict. Among the conservatives there are free marketers and there are state's righters.
You have a case of the free market versus state's rights: The State of New York says it should be able to do what it wants, and the free marketers say there's a restraint of trade under the commerce laws. Scalia voted with us on free trade; Thomas voted for state's rights. It was five-to-four. We got the liberals—four—plus Scalia. You know why? I figured out why at the end: Scalia and the other four are in a Supreme Court wine tasting club. The other four, who voted against us, are not. His view was, "It's only wine—it's only shipping for wine, not booze."
What they said—this is the compromise—is the state can do what it wants under the 21st Amendment appealing Prohibition, but it cannot treat its domestic producers differently than [it treats] other producers in the U.S. You have to read this stuff carefully. In the Supreme Court's world, we are a domestic producer of the state. Now we have direct shipping bill and it's [permissible to ship] 36 cases. It's only been a few months since the Court's decision and it has been already amazing.