Discipline, Not Dollars. How Paul Hobbs Builds Global, Enduring Brands.

0:10Hello, friends. I'm Ray Lateef, and you're tuned into Taste Radio, the number one podcast for anyone building a business in food or beverage. Building a lasting business in a volatile market isn't easy? Just ask Paul Hobbs. In this episode, the renowned winemaker and founder of Paul Hobbs Wines shares what it takes to scale a global enterprise while staying anchor to sustainable farming and minimal intervention practices amid a capital-intensive, ever-evolving industry. He explains why capital discipline and patience matter more than hype and how a commitment to authenticity can transform a craft into a durable long-term brand.

1:02Hey folks, it's Ray with Taste Radio right now. I'm honored to be sitting down with Paul Hobbs. That is Paul Hobbs, the legendary winemaker. Can I say that? Is that fair to say, Paul? That's your choice. Okay. So you've had a ton of experience in this business and, you know, right off the bat, I think it's an interesting time, to say the least, for wine. And a lot of people are worried about the future of the beverage and what the future holds for not only consumption of wine, but the brands that have been part of this industry for so long. How do you evaluate the opportunities and the challenges for wine?

1:40Well, I think as an industry, the alcoholic beverage industry goes through cyclical, just like any industry in reality. But we are going through a down cycle right now that's probably, over the course of my 50 years, or nearly 50 years in the industry, is more severe than, and if I talk to some of the older old-timers, they say it's one of the roughest they've seen. But there's a lot of confluence of a number of variables that have brought that together. Nevertheless, a correction has been needed because there's been over-planting and over-zealousness. And I think invariably I've been kind of waiting for, you know, the foot, well, it's dropped, you know, but I feel very bullish.

2:24Frankly, I feel a lot of optimism for the future. It's just like spring cleaning in a way. We've got to go through this very tough time. In addition, there's the anti-alcohol movement and that's worldwide. There's a lot of other factors impinging on the industry. But let's face it, wine has been around probably as long as man has been on the planet. And I don't think it's going away. I think there's a lot of young people that are interested. We've got to keep it affordable so that they can try good wines. Because when I was just striking out, I started as a teetotaler. When I first started trying wine, you know, I could afford really good wines.

3:04Even as a graduate student in California, you know, not that I could afford a lot. But now, you know, prices have skyrocket on some wines. Things are expensive. The production costs are, you know, are high for really super quality wines. So, yeah, there's a lot of things to balance. I think what's missing in this industry is love, right? I mean, you just talked about when you fell in love with wine. I remember when I fell in love with wine and the bottle and the vintage. And, you know, you start to realize that wine is something more than you ever thought it could be. And I think that kind of communication, that kind of passion is missing, especially from the standpoint of younger consumers.

3:47How do we bring that love and passion back? Well, that's a very leading question. Provocative question. I think curiosity. You know, and for me, again, I came to wine mainly because my father, I grew up in farming and so on. But my father, I was going into a different career. I had no interest in wine. no knowledge of what it was but I mean it's so rich in history and there's constant learning and so there's a connection with many cultures around the world I can't imagine that the young people don't have a love for that now of course there's trends there's things that go this way and that way but I think that's why I'm not really concerned some people are saying hey the young people are not really drinking wine.

4:34I don't think that's not what I'm seeing. I really feel, again, pretty positive about, but we've got to make it affordable because I think if all of them had$10 ,000 more in their pocket, they would probably choose to drink wine. You had a lot of experiences that helped get you to where you are here today. What was most impactful in your journey, what experiences that at your different stops and stages have really crafted who you are and the labels that you produce today? Well, that one, Ray, there's quite a few touch points. And some of them, I guess the first one would be my first true exposure to wine, which was in 1969 when my father brought home.

5:23I had no concept of what wine was except as an altar boy serving mass and pouring eight o 'clock you know father wagner some wine at eight o 'clock in the morning you know and then i by the way i did try that it was pretty awful so i thought that was why my mother forbid wine but i mean once i started to learn about wine and what a beautiful product it is and the passion the the energy the you know the determination um by you know because it's not an easy product to make at a high level on a consistent basis. But then I just discovered a whole new world of beauty. And my first epiphany and, you know, as a budding professional was, I guess you could say the tasting of German wines.

6:12And they were sweet because that's what I was, you know, I'd grown up on Kool-Aid and milk and juices and things like that. So the first wines that really caught my attention, and I also was fascinated by the nomenclature and the structure because I like structure I like organization and how the German wine industry and then of course I learned from Burgundy as well I mean how they revere the vineyard so I think there were wines but there were also people and you know there were wines that caught my attention but in terms of people it was Mr. Mondavi first and then his joint venture with the Baron Philippe Rothschild on Opus One And I just happened to be in the right place at the right time.

6:56What year was that? 1979. So I was part of the inaugural winemaking team, though I was an apprentice winemaker. But I had the scientific training that Mr. Mandawe thought would be important in front of the French. What scientific training was that? Mostly chemistry. I was undergraduate studies at the University of Notre Dame in Indiana. and that was for pre-medical because I wanted to follow in my great-grandfather's footsteps as a medical doctor. So that was my career path, but my father sort of, if you will, uprooted that and suggested I go out to Davis. But that's a whole other story. But then when I met the professors there, you know, I thought, I'm going to fish out of water here.

7:39There's a lot of people that are scions of great families and so on and so forth. But then I found that they were so welcoming, kind, and kind of took me under their wing. So that would be another. I mean, my professors, I mean, all along the way, I've had these kind of great. And then trips to Europe. That's where I really got the sense of what wine was all about. There was the American approach. We were more scientific and sort of like UC Berkeley mindset, asking a lot of questions. And then the Europeans, of course, have had generations after generation. and I'm a first-generation winemaker, so that fascinated me, how this thing could go on for 600 years in Western Europe and even longer in some parts of Eastern Europe.

8:23So that really, all those things came to bear on my growing enthusiasm and curiosity about wine. It seems like you have a passion for and have had a passion for winemaking for quite some time. Of course, we live in the United States where commerce is king and brand building is the key to unlocking fortune and fame, perhaps. How do you balance the two? How do you balance your interest in and your passion for winemaking and brand building? I think that might be one of the best questions I've had in quite a long time. How do you balance that? I don't know. That's a toughie. Because I never went into the wine business with any awareness of the commercial side.

9:07I learned that at Mondavi, how Mr. Mondavi promoted wine and helped, of course, Robert Parker, his influence, and others too, Marvin Schenken and so on. And so they had more, maybe they understood the commercial and the important connection with people. My naivete was strictly, hey, I like making this stuff. I like learning about the vineyards and how to make different wine and learning about cultures and so on and so forth. but of course you know once you start your own enterprise then you've got to make it you know profit is important to keep it going right so then I had to learn that and I learned that you know from the men and women that I just mentioned but also when I started working in Argentina with Nicholas Katena he was a very commercially oriented marketing oriented individual he had a lot of experience.

9:58He worked outside the wine realm as well. So he was into fashion. And as many Latins are that run businesses, they were vertically integrated in business. So Nicholas was quite interesting as, you know, and I coupled my learnings from Mr. Mondavi as well as Dr. Katena, and then just started to do it myself. But I don't know if I haven't, I've answered your question. probably not. No, I think you did. You have to have a starting point where whatever you're doing is based in truth and authenticity. And I know those two words get overused quite often. But if you're just doing it for the money, and we've met entrepreneurs who are trying to do things just for the money, most times it doesn't work out.

10:45Most times you have to have that reason for being that is true, has a value, not only to yourself and others, but actually makes sense for the market. Right. And I think you did speak to that. You spoke about how it wasn't about becoming, you know, well known or becoming one of the top winemakers in the world. It was about making great wine for yourself and hopefully others would enjoy it as well. And you build from there. Well, I think at the end of the day, that's kind of how my mind works. I mean, I do remember reading a book written by Bill Walsh, who was a former coach of the 49ers football team in San Francisco and entitled The Score Will Take Care of Itself or something to that effect.

11:31And I thought, yeah, that makes sense. Pay attention to what you love. Throw yourself into it wholeheartedly. And the rest takes care of itself. And, you know, it's not quite that simple, but it's, I think that's what really keeping the eye on the ball. I think keeping your eye on the ball means understanding when opportunities present themselves. And I think you talked about Argentina and sensed that there was a great opportunity to introduce wines from that region to the rest of the world. How did you evaluate Argentina as a potential country that many people would come to revere for its wine?

12:09Well, first of all, just getting there was not my idea. That was an inflection point in my career. And I was mid-30s. I had done seven years with Mondavi, six years on Opus. And I was midway through my career at Simi Winery, which was what at some moment became part of LVMH in 1987. So I made a trip to South America in 88, but not to go to Argentina. But I had a classmate friend there. I invited him over because I didn't speak Spanish. And so I thought, well, I'm in Chile. Maybe we'd just hang out together and he could help me. So I spent a week touring wineries in Chile that was organized by another friend.

12:53And what I didn't realize was the, well, the animosity that existed at that time between those two nations. And inviting a— I could have told you about that, Paul. you know falkland islands or border disputes things of that nature so inviting an argentine into chile got me thrown out of chile basically so that is the only reason i ever came to argentina because i was resisting it based then i learned from that experience not to believe everything you hear because then i learned that there was a myth that argentina and particularly Mendoza, which is sort of the key province of wine production in the country, there was this myth that it was too hot to grow fine wine grapes there.

13:43What really caught my attention in Argentina was Malbec, and it was an underappreciated grape. Well, actually, I didn't know. I thought it could be an underappreciated grape, and I wanted to experiment with it to see if, in fact, it could be made into a top varietal. But there was a huge resistance in Argentina to do that, and for a variety of reasons that seemed plausible at the moment. Nevertheless, curiosity got the better of me, and I thought, well, how could it hurt to do some real work on this and see what comes out of it? So that's work that I began basically in 1991 in the vineyards, made the first wines in 92.

14:25so when I finished that was all that work was done that built a brand called Alamos after that I decided hey I want to do my own little winery small to study the nobility of this grape because working in another environment as a consultant and what have you wasn't affording me the opportunity to really dig in deep and so that was the impetus behind starting Vina Cobos, which I started in 1998. And it was just mainly, again, to just study, does this variety truly have nobility in Argentina? We didn't even know if wines would age in Argentina, because no wines that had been made heretofore had aged well, but it was because of sloppy winemaking and that kind of thing.

15:11So no, I had no idea that we'd be in 60 some odd countries around the world. That was never part of the business plan. When did you start to realize that people were respecting Malbec from Argentina and that you were on to something. Well, it really caught my attention. There were, I think when I thought Malbec had caught on, and actually it's odd because it happened at Dulles Airport at the United Lounge, Concours C. And I haven't been in that lounge in a long time, but flying here last night or this morning, it was deja vu. I was back in that same lounge, the same bar. So what happened was, many, many years ago, like 25, 30 years ago, something to that effect, I walked into the lounge, and the lady behind the bar said, you look thirsty.

16:02Can I get you something? And I said, yeah, red wine, you know, and she said, you mean Malbec? And I said, wow. I mean, I've never imagined that somebody in the U.S. would just say if red wine was equated with Malbec. I never imagined you'd respond to a drink offer with red wine, but maybe you really were thirsty. I mean, it's amazing though, right? When you, you know, think back to, what is it now? Almost 28 years ago, 28 years ago that Malbec is ubiquitous and that you can get it anywhere and that people ask for it and that you're a big part of that as well. But, you know, again, that's just part of the story, the origins of that.

16:49Your interest in Malabek, of course, the story of the taste of the grape and the history and the legacy of winemakers from that region all are incorporated into and the reason behind its ascendance. And that story, once again, is really important. Is there a way to tell a story more authentically, in your opinion, than another. I mean, how do you talk about details of a grape like that, of a brand like Vina Cobos? Well, truly, I just basically say what I happened to. I mean, to do what we did requires creating a culture within a culture. And in Argentina in those days, quality was not something that was really on their radar.

17:38And it wasn't only in the wine industry, it was across all industries. That has changed. But, you know, to communicate that, you had to find a few believers, right, that say, yeah, we would love to join and lock shoulders with you. And so that's what we did with Malbec. I had a belief that the climate and the soils were good. So therefore, you know we were in the right place and they had old vine malbec so what they were missing was partly based on prejudice and partly based on just defensive winemaking and what i mean by that is they had severe hailstorms and so there were the argentine wineries paid growers poorly and they oftentimes didn't pay a grower until the fruit was already in the winery and might be months later before the grower realized how much they might get paid.

18:32So there was no incentive for them to go for quality. So I guess we just went in, or I went in and said, okay, mainly I work with young people because they're just more open-minded and less prejudiced. That made it, I would say, the ascent of our learning faster. And sharing that vision with people that you trust and you think can help you build a brand or a winery like Vina Cobos is so important. How do you trust people? How do you learn how to trust people? And certainly I'm sure in your career there have been people who have disappointed you, but how do you identify people that you can trust?

19:11Well, sort of a gut, I guess. But if they're straight shooters and they talk, I mean, I don't know. It's like this sort of like sleazy salesperson. You have a sixth sense that you're getting sold. Yeah, and then it's not only a matter of trust. It's a matter of are they dedicated to do the work because the work is, you know, are they willing to, it's going to be hard. It's going to be, there's going to be failures. Are they willing to go through thick and thin? Will they, you know, fall away and something like that? So, yeah, and then if you go to cultures like Argentina, particularly back then, there were a lot of people that didn't really trust because they lived in an environment where trust wasn't something they could depend on from their government and maybe even from their neighbors.

20:02There was a lot of corruption and things of that nature. So how did they come to trust me? And so I had to be consistent with what I said. And as long as people will do that and they do what they say they're going to do and they get up in the morning and they put in an honest day's work, that's, from my point of view, all it takes. Earlier you referenced here and we're here in the Bahamas and on Paradise Island for the NASA Paradise Island Wine and Food Festival, of which many of your wines are being served. and you've had experiences in all different parts of the world. And I think four continents, you said, seven wineries on four continents.

20:46And when you have that big of a business and that much responsibility on your shoulders, it almost feels like you might be having to pay attention to or be paying attention to one part of the business more than others. Is there a strategy that you have where you're able to keep an eye on all aspects of your businesses such that they're all running as they should and harmoniously at that? I think instinctively I learned some of this technique from my mother because she gave birth to 11 children over a 20-year period. God bless her. And being the second oldest, I got a chance to learn from her how to organize.

21:23And you can't do it all at once. So yeah, you can't raise 20 children, or I'm sorry, 11 children all at once. So yeah, over 20 or basically 40 years. So that's kind of it's a step-by-step process and it really in my mind it takes if you're starting from scratch which is essentially what I've done with very low capital and input you know to get things started so I didn't really want to go work you know with investors because I'm beholden to them and so I wanted the freedom so that meant well I didn't have a lot of money on my own that meant We had to find ways to work from hunger and drive, I suppose.

22:03But, you know, I've done this over time. And there's a learning that comes with the first one has helped me with the second. But I've also come to find out it's not that much easier even to go to France. Easier to set something up in the U.S., let's say with my winery in New York. But even that, you know, the legalities are different. If you go to central New York, it's quite different than working in Sonoma or Napa. So people are different. And so you've got to learn to understand them and adapt to their way of being. And so it's a give and take kind of thing. But I think patience and impatience come into play because, you know, I'm also driving for a high, very high standard.

22:49For example, with my winery in New York, I wanted a winery basically in the Americas that could compete with the best of Europe. And so to do that, you're asking people to work at a very high level. Well, I think two takeaways from your answer. One was that you have to delegate well. And two, you have to be frugal and intentional with the money that you have. And, you know, starting with the frugality, I talk to a lot of entrepreneurs who are brand new to the industry and have no money. And the first question they always ask me is, do you know any investors that are willing to fund my business?

23:28And, well, you kind of have to prove yourself out first and show that you can get a product that actually makes sense for the market and that could potentially turn a profit at some point. And I think just in general, business is business, right? And I'm not sure why a lot of entrepreneurs and founders don't think about consumer brands in that way. I mean, has that been your experience talking with other winemakers as well? Well, it seems as though everybody does this in a different way. Some have done it the way I've done it, you know, from a very frugal and low capital investment. Because this is a highly capital intensive startup.

24:09To buy vineyards and wineries are, you know, it's a lot of money. So normally, we had the luxury in California of being able to buy grapes from growers. Not a lot of growers were willing to have the winemaker walk their vineyards with them and tell, hey, let's collaborate on how these grapes are going to be grown. But there were a few, particularly those that had spent some time in Europe and seen how the true vigneron works, that it's a collaboration. So I could work that, and then I could also, there were what we call shared facilities. But that's always fraught with somebody else's vision of how that facility runs.

24:47So you don't have the control that you'd like. But your drive is going to get you there. So yeah, just stay with it and patience and fortitude and so on and so forth. But then I think most people would prefer the easier route, and I can't blame them. I mean, the easier route is, hey, let's have good funding and buy everything we need and hope it all works out. But that also has its own – that usually feels good in the beginning but can kind of collapse as time goes on if the business is not profitable. Then you've got some upset investors. There is a flip side to that, which is you're seeing a lot of new products that call themselves wine or wine-ish or in different forms or different packages that have made wine less delicious.

25:40This is just me talking, that have made wine a lesser beverage, I think, than what it is. I could just be some snotty bastard here talking about this. But does that concern you at all? I mean, is just wine in any form a good thing that people are drinking wine? Or do you see some real potential problems with some of the new products and new brands that are coming to market? Yes and no. I mean, the fact is you stop there and think, well, that's what wine is. You might say wine is horrible. It's like my experience as an altar boy. You know, when I first tasted those, I said, that's the reason my mother doesn't allow alcoholic beverages served at the family table.

26:21Tastes terrible. But then when the Chateau Hichem graced my lips, well, that was, you know, that was an epiphany. So, no, I'm not really concerned by that, to be honest. I really think that great wine will continue to be made. I think, am I concerned that, particularly in the U.S., a lot of first generations don't see a second generation, and then it gets sold for a big price, and it ends there, and then you lose a little bit of the soul. I do think you need some of that family pride or individual pride, and where you're not worried about what the investors are thinking about getting a return, that kind of thing.

27:07So big corporations have that pressure. And it's hard enough without that pressure. But I think also then you're not able to do exactly what you want to do, and that's what I tried to escape. Even when I had the best experience I think a person can imagine, to do seven years of Mondavi was like a postdoc. It was great. And then you start to grow in your career, right? But what you want as an artist and a craft, I think, is the personal freedom to do what you want. But then you come to realize that you're never totally free anyway, unless you're a hermit. Because the government comes calling. There's a lot of restrictions.

27:46There's a lot of, some of it's good, some of it's... Tariffs. Yeah, there's, you know, regulations that sometimes are good and sometimes they're not meaningful and all kinds of things. But that's just part of swimming in the pool. I like the way you put that. It's part of swimming in the pool. Sometimes you get a bad taste of chlorine in your mouth. And sometimes you're by yourself and soaking up the sun. Yeah. Yeah. Paul, I've really enjoyed speaking with you. Thank you so much for taking the time. I'm glad you're out here. Yeah, thank you. It's probably a nice respite from where you're based.

28:17I'm based in Northern California. And I basically consider both Sonoma and Napa. I mean, I live in a little town called Sebastopol with my family. but those two that's my background my backyard Napa Valley and Sonoma County West Sonoma County well I'll be in San Francisco later this year and maybe we can have a follow up to this conversation different type of venue might yield a different conversation as well yeah let's do that let's do that right or do it in Mendoza oh okay you don't have to sell me on that Paul thank you so much once again thank you

28:57That brings us to the end of this episode of Taste Radio. Thank you so much for listening. Taste Radio is a production of BevNet.com Incorporated. Our audio engineer for Taste Radio is Joe Cratchy. Our technical director is Joshua Pratt. And our video editor is Ryan Galang. Our social marketing manager is Amanda Smirlinski. And our designer is Amanda Huang. Just a reminder, if you like what you hear on Taste Radio, please share the podcast with friends and colleagues. and of course we would love it if you could review us on the apple podcast app or your listening platform of choice check us out on instagram our handle is bevnet taste radio as always for questions comments ideas for future podcasts please send us an email to ask at taste radio.com on behalf of the entire taste radio team thank you for listening and we'll talk to you next time