Central Coast Vineyard Changes Hands

Donati Family sells some of its California winegrape acreage to Doug Circle

by Paul Franson
Paicines appellation
The Paicines appellation consists of about 4,500 acres devoted to grapegrowing.
San Benito County, Calif.Doug Circle, principal of Pinnacle Vineyards LLC, has bought 444 acres of the 1,024-acre Donati Family Vineyard in the Paicines American Viticultural Area. Situated in San Benito County in California’s Central Coast region, the vineyard is 27 miles east of Monterey Bay over the Gabilán mountain range John Steinbeck made famous in "East of Eden."

Circle is a diversified ag businessman who has been expanding into winegrapes. He also owns Sierra Madre Vineyard and associated wine brand in Santa Barbara County’s Santa Maria Valley. The Paicines deal doesn’t include a brand or winery, which remain under the ownership of 7,000-case Donati Family Vineyard.

Circle said he took over the property last Tuesday, and plans to continue farming it. “Most of the grapes are sold under long-term contracts to wineries, including the Donati family,” he said, adding that he will “of course honor the contracts.”

He doesn’t plan to use the grapes for his Sierra Madre brand. “Those are Burgundian varieties and this vineyard is primarily planted in Bordeaux and Rhône varieties,” he told Wines & Vines.

Zepponi & Co., Santa Rosa, Calif., served as exclusive financial advisor on the sale. Financial terms were not disclosed, but Mario Zepponi said the family didn’t need to sell. “The family is selling excess land. They’re focusing on their own brand and have far more vineyards than they need.” He added, “This transaction is good for the industry. It was not a distress sale, but a healthy commercial sale.”

The Donati family will keep 580 acres, including 47 acres of vineyard plus an estate residence. They plan to develop additional acreage in 2012 to continue the Donati Family Vineyard brand. They will satisfy their short-term grape needs via a grape buyback agreement with Pinnacle Vineyards.

The purchased property includes 376 acres of vineyard planted to premium red and white varieties, principally red Bordeaux vines at various stages of maturity. 

The Donati family bought the property in the late 1990s and began producing ultra-premium, Paicines AVA-designated wines from the vineyard in 2005 under the Donati Family Vineyards label. It has a winery and tasting room in Templeton. Since 2003 the vineyard has also supplied grapes to several major wine producers.

“This is a spectacular vineyard property,” said Joe Ciatti, principal with Zepponi & Co. “The Donati family has consistently produced first-rate fruit from their vineyards.  With multi-year grape contracts in place, paired with a high quality, well cared for vineyard, it’s truly a premium acquisition. The vineyard garnered grand appeal to a wide variety of grape buyers, given the dramatic change in grape supply impacting the North American market.”

The vineyard was once part of a large Almadén Vineyards property and adjoins a former Almadén facility now used by Diageo primarily to produce Blossom Hill wines. It sits in a valley 10 miles south of Hollister. It was abandoned as a bulk-brand growing region for lower cost areas, but is now being reclaimed as a source for high-end grapes. Most of the Donati vines were planted since 2000.

Paicines AVA

The Paicines appellation is about 17 miles north of Pinnacles National Monument and Park; it consists of about 4,500 acres devoted to grapegrowing. On the western side are the Cienega Vineyards and the Gabilán Mountain range that separates Paicines from San Lucas and King City.

The San Luis Dam and New Idria and the Panoche Valley are on the eastern edge. The San Benito River forms a portion of the western boundary and continues on through the vineyards.

The Paicines area is in a wind tunnel of cool ocean air flowing to the San Joaquin Valley. Because of the relative lack of trees adjacent to the vineyard areas, the Paicines area is open to the direct influence of these winds. In the afternoon, Paicines takes advantage of a slight cooling breeze that flows in from the Monterey Valley.

At night, Paicines is more protected from the evening fog than much of the surrounding area, because of its open location. However, during periods of extremely heavy fog, the Paicines area holds the fog longer than much of the nearby area, including Cienega Valley.

Elevation ranges from 500 to 1,200 feet above sea level. The average elevation is lower than much of the surrounding area closer to the Gabiláns. The rainfall pattern in the Paicines area differs greatly from that of the Gabiláns: Annual rainfall in the Paicines area is between 12 and 15 inches.

The 10-year average temperature is around 2,750 growing-degree days, a cool Region II.

Background of the principals
Donati Family Vineyard is the only brand located in the Paicines appellation, although there are five other vineyards growing primarily Bordeaux varieties. Neighboring appellations are home to Calera Wine Co. (30,000 cases), Chalone Vineyard (40,000 cases), Leal Estate Vineyards (10,000 cases), Pietra Santa (40,000 cases) and DeRose Winery (4,000 cases).

Born and raised in Orange, Calif., Doug Circle discovered his entrepreneurial spirit when he first grew strawberries as part of a Future Farmers of America project, at 15, and opened his first roadside stand. After high school, he worked as a fruit salesman following the crops throughout California, Arizona and Mexico.

He met his wife Jan in 1981, and soon thereafter married and started a family. At that time the couple owned 25 strawberry farm locations, running eight roadside stands, a business they maintained for almost a dozen years.

With a long-time business partner, Circle started what became Sunrise Growers/Frozsun Foods, rolling several small companies into a $300 million frozen and fresh strawberry operation.

In 2001, during a winegrape glut, Robert Mondavi Winery put its Sierra Madre Vineyard on the market.  Because there was a 60-acre strawberry operation at the vineyard, a local broker presented it to Circle. He bought it, and, although he remained a strawberry farmer, he became a winegrape grower as well.

Michael Mondavi convinced Circle to start his own brand. "If I were in your shoes, I would pursue making the world-class Pinot Noir and Chardonnay that this vineyard is capable of," Mondavi said. Circle took his advice.

Ron Donati
bought the Paicines property in 1998 for his son, Matt Donati, to grow high quality grapes from the ninth-oldest AVA in California. Soon, favorable reviews of the fruit convinced Ron Donati to create the Donati Family Vineyard brand.

Starting in 2003, Donati produced Merlot, Cabernet Sauvignon, Meritage, Claret, Chardonnay and Pinot Blanc, released to restaurants and boutique wine shops in 2005

Paicines is a good site for growing grapes, he said, but its out-of-the way location, with a population of 204, is less than ideal for a tasting room, so Donati chose Templeton near Paso Robles for its winery and tasting room.

Zepponi & Co. specializes in advising ultra-premium and luxury brands, estate wineries and vineyards, such as Chalk Hill Estate, Four Vines, Black Stallion, Kuleto Estate and Murphy-Goode Estate.  Its principals collectively share more than 75 years of wine industry experience and $900 million in completed transactions. For more information, visit zepponi.com.

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