Scheid Family Wines
Scheid Family Wines controls wine quality and consistency from grape to glass.
Heidi Scheid describes Scheid Family Wines as a mid-sized winery trying to compete with the big players that have multimillion-dollar marketing budgets and large product development teams. “I would say the industry has never been more competitive,” Executive Vice President Scheid says. “There are so many brands out there. It is tough for someone our size to compete with the big five.”
But the 48-year-old winery does compete and does it well, steadily expanding its branded wines while also producing private-label wines for major retailers.
“We are small and mighty,” Scheid says. “We attract employees that want to work hard and have the entrepreneurial spirit to build brands from the ground up rather than have already successful national brands handed to them.”
Scheid Family Wines has the advantage of being vertically integrated. The company grows, crushes and ferments its own grapes, and bottles the wine itself. That allows Scheid Family Wines to control quality and consistency from grape to glass. “Now, more than ever, customers want to understand where products come from and are attracted to brands that are authentic,” Scheid says. “They want to know the source. We can trace every bottle back to the vineyard blocks. It gives buyers confidence in our product.”
Scheid Family Wines farms 4,000 acres of estate vineyards that stretch along 70 miles of California’s Salinas Valley, which is surrounded by the Monterey Bay to the north and two mountain ranges.
The valley has a number of micro climates. “There is a cold, windy fog from the north that warms up as you go south,” Scheid says. “It is the most diverse growing region in California.”
The company takes advantage of that climatic diversity and grows 39 varieties of grapes. Grapes for pinot noir and chardonnay, for example, are grown in the cooler north while grapes for cabernet sauvignon and petite sirah are grown in the south.
Because of a labor shortage of farmworkers in California, Scheid Family Wines has invested in mechanizing its vineyards through mechanical pruning and harvesting of much of its acreage. The company also invested in electric pruning shears that are powered by a backpack battery and allow vineyard workers to easily cut through vines. “Hand-pruning is very physically demanding,” Scheid says. “This new technology has improved the lives of our vineyard workers and can lengthen their careers.”
Growers to Winemakers
A more unusual investment is a 400-foot-tall wind turbine that went into operation in 2017. “It powers 100 percent of our entire winery operation plus enough energy for 125 homes,” Scheid says. “We are always looking at ways to be more sustainable. Sustainability is something we hold dear to our hearts.”
Heidi’s father, Al Scheid, founded Scheid Family Wines in the early 1970s as a tax shelter. “It’s the un-sexiest story in the wine business,” Scheid says.
Al Scheid had started an investment company after working for EF Hutton stock brokerage and his clients wanted him to come up with a tax shelter, which allowed individuals to offset losses against regular income. “He did research and came up with vineyards,” his daughter says. “They are pretty much guaranteed to lose money in the first five years.”
Al Scheid identified Monterey County as the perfect place to grow grapes. He came in as the managing partner, bought property and signed a 30-year contract to supply grapes to Almaden. “That was the first 20 years of the company,” Scheid says.
In the late 1980s and early 1990s, Heidi and her brother Scott joined the company. They modernized and replanted almost all of the vineyards with grapes for more popular wines such as merlot and chardonnay.
“By 2003, we realized we needed to have our own winery,” Scheid says. “We had talked to our winery customers and they wanted wine, not grapes.”
Two years later, the company invested in building a state-of-the-art winery in order to make custom wine for its winery clients. In 2011, Scheid Family Wines decided it was time to build its own branded portfolio and shifted its focus to producing its national brands such as Scheid Vineyards, District 7, Ryder Estate, Ranch 32, Metz Road, VDR and Stokes’ Ghost, as well as private-label wine for such clients as Trader Joe’s, Kroger and Total Wine & More.
In 2011, it produced 6,000 cases under one label. That has since increased 100-fold and Scheid Family Wines now produces 600,000 cases annually of branded wines, including both national brands and private-label wines. Those wines are sold throughout North America and 15 other countries.
Scheid Family Wines currently uses only 30 percent of the production from its estate vineyards for its own brands. In the near term, the company plans to continue to grow its sales of branded wines to one million cases and shift its business from being a wine grape grower and bulk wine producer for others to being a branded wine powerhouse.