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Kevin Yee

Mondavi's Hangover

What do you get if you take the centermost property in the newest Disney theme park, add a nearby parade route, throw in a world- famous brand name, and offer four levels of food service that target every conceivable price point?

Iāll the bet the one answer you didnāt come up with was ćan empty restaurant.ä Nevertheless, empty tables grace the Mondavi winery at DCA, which may be facing a financial crunch if their patronage and overall numbers do not improve soon. It was not supposed to be this way.

Mondavi Winery
Mondavi complex from a distance.

When DCA was first announced, Michael Eisner knew right away there would be a few elements to the park that no existing theme park offered: educational (or perhaps ćedutationalä) displays that were designed to appeal to families. Thus, factory and farm exhibits would have their place in the new park, and a cornerstone idea for the park was to prominently feature a working vineyard that would showcase the process and, via wine tasting, the final result.

Robert Mondavi, whose Napa valley winery was founded in 1966, leaped at the chance to join the new park. Mondavi spent $12 million to create the Golden Vine Winery at DCA, and confidently predicted an operating profit in the first calendar year of operation. DCA, which was expecting roughly seven million visitors in that first year, would provide about two million customers to the Mondavi complex.

You read that right: they projected ö and budgeted for ö every two of seven visitors to spend money at Mondavi. Thatās just a shade under 30%! I know the wine is supposed to be good, but a third of the park-goers, consistently every day of the year? I doubt that there has ever been a restaurant or shop in Disney theme park history with such ambitious sales projections, let alone actual revenue. Read on, and decide for yourself if perhaps they were drinking too much of their own product when they took on the Disney project.

At first, things ran as smooth as silk. Cast Members (who work for Mondavi, not Disney) for the location were hand-picked, many of them lured from Disneylandās own pool of employees. Selected hourly stars were flown in September, 2000 up to Napa Valley for a rigorous company orientation and training session in wine and winemaking, called the Wine Ambassador Program. The preview days of California Adventure saw a lot of business come Mondaviās way. Were people excited about the concept of wine at the park? Did they know and trust the brand? Or was it the fact that everything on the menu was half-price for the preview days?

It must have been the discounted menu. Sales of food, wines, and merchandise are down. Way, way down. How far down? It seems they are not even covering their labor costs right now with their revenue, never mind their significant food costs, overhead, and investment. Let me assure you, running an establishment with labor-percentage accounting for over 100% of sales is not good. Even Disneyās cheap backstage cafeterias usually do better than that.

Mondavi Winery
Nary a soul on the Mondavi patio on a recent weekend day.

Mondavi Winery
One of the wine bars, now closed, at Mondavi.

Layoffs have already begun. Mondavi over-hired by quite a margin, it seems. During the busy preview season, a large staff was warranted. But now? Now folks struggle for hours even as management struggles with costs, including labor.

Management at the complex, which is run by Mondavi, not Disney, is privately starting to panic. The restaurant features two wine bars (one seems to be permanently shuttered now), a deli, an appetizer- and- wine Terrace lounge, and the fine dining segment called the Vineyard Room, with seating for 90. Each of these offerings, designed to hit all possible price points, is a drag on the bottom line because they all demand constantly fresh product. And without people buying that product, out it goes to the food banks. More money lost.

Mondavi Winery
Wonderful views of Paradise Pier aren't enough to lure folks up to the expensive Vineyard Room.

Mondavi Winery
e Terrace Room, deserted, waits for customers in the shadow of the Great Bear.

Mondavi Winery
deli offers more reasonably-priced food.

Perishable items even form a healthy chunk of the retail shop ö which may feature offerings too high-end and high-priced anyway for a theme park crowd. Reportedly, it sometimes takes hours ö plural! ö before the very first sale on any given day. Is there a market for bottles of wine at a theme park? Possibly a small one. What sales there are frequently go to guests of Disney hotels, where they can be sent without effort on the guestās part, and then guests have a chance to get drunk in their rooms. I wonder if this is what most people think of when they hear the words ćDisney vacationä?

Mondavi Winery
e Mondavi gift shop. A bottle of wine, anyone?

Itās not the expensive stuff thatās being sold, either. The shop offers all of Mondaviās California line - Arrowood, Byron, Io, La Famiglia di Robert Mondavi, Opus One, Robert Mondavi Winery, Robert Mondavi Coastal and Woodbridge, but a good majority of the bottles sold are of the $5 and $10 variety. (Incidentally, bottles purchased cannot be taken away directly; they must be picked up at Package Express later in the day).

Why is the cheaper wine being purchased more than others? Some guests have frankly admitted they are buying the lowest price kind because they are not interested per se in the wine itself ö they are after the DCA-specific medallion that comes packaged with each bottle. What they are buying, then, is an expensive souvenir and a cheap buzz.

ćCheapä is not a word otherwise heard frequently at the Mondavi complex. Here are some of the prices as they currently exist at the various Mondavi service locations:

The Vineyard Room
Four Course Fixed Price Menu with Wine- $42.00 per person (Lunch) or $50.00 per person (Dinner).
Four Course Fixed Price Menu without Wine - $28.00 per person (Lunch) or $36.00 per person (Dinner).
Children's Fixed Price Menu - $14.00

Menu includes three courses plus dessert. Choose one selection from each course:
- Classic Antipasto or Tuna/Potato Salad
- Butternut Squash Ravioli, Saffron Tagliatelle, Orecchiette with Rapini, or Pappardelle with Braised Duck
- Pan Roasted Snapper with Spinach Risotto, Gnocchi with Maine Lobster, Roasted Pork Loin, or Braised Beef Short Ribs

Golden Vine Terrace
Wines by the Glass - $8.00 - $24.00
Wine Flights - $16.00 - $27.00
Food Menu includes Soup, Pastas, Cheese, Fruit, Antipasto Platters, Meats and Seafood, Ice Cream

Wine Country Market
Wines by the Bottle
Deli Sandwiches
Prepackaged Snacks

Wine Bar
Wines by the Glass - $5 to $8

I know. I hear what youāre saying to yourself: what were they thinking? Fifty dollars per person is a truly extravagant expenditure, particularly for a family on vacation (which usually means a budget).

Hereās what they were thinking. R. Michael Mondavi, current CEO of the Mondavi corporation, commented in the 1998 Mondavi press release announcing the venture with Disney that ćthe opportunity to showcase wine as part of the California experience on this level is the fulfillment of a lifelong dream for my father and our family. Introducing visitors to California's wine history and Robert Mondavi's role in it supports our global strategy.ä In the months before opening, he mused: ćthe majority of consumers are intimidated about wine. So we will have a seven-minute movie about the history, the present and future of California wine as well as eight food-and-wine tasting areasä [Source: Columbus Dispatch, September 20, 2000].

So Mondavi looked at this as a chance to enhance their brand awareness and a way to goose wine sales in general. I would say that this effort is failing, to judge by the sales so far.

But Mondavi also mentioned education as a prime motivation. Theoretically, this matches Eisnerās stated desire to have Disneyās California Adventure educate as much as it entertains. How does the Mondavi complex measure up? Pretty well, actually. There are those previously-mentioned wine ambassadors set up on tables outdoors, and they walk you through the sometimes intimidating vocabulary and categories associated with wine. There is the seven-minute educational video ćSeasons of the Vineä in the Barrel Room (where actual wine is actually stored! excitement!), which is surprisingly engrossing for a movie about grapes and the annual cycle of a vineyard.

Mondavi Winery
he Barrel Room, which shows the film "Seasons of the Vine."

Oh yes, a vineyard. Mondavi has one of those here, too, on about one acre to the side of the complex. Naturally they donāt sell the wine they grow here, because itās designed to be educational and perhaps just fun. Plus the land is too small for a sizeable amount of wine production.

Mondavi Winery
one-acre vineyard, at the start of its third (!) planting.

Oh, and there is another glaring problem: the vines keep dying. They are now on their third planting. Seems the Orange County soil and climate, so suitable for orange groves, is not all that well-suited for wine grapes. The weather in particular has been uncooperative, with five hot days in a row in January enough to wipe out one of the plantings. Iām slightly taken aback that they didnāt think of this. It is Southern California after all· sun happens.

For all the problems detailed here, I sincerely hope the restaurant finds a way to struggle toward profitability. Everyone Iāve talked to simply adores the Mondavi family. Employees are granted good wages and benefits. The restaurant itself is gorgeous and an architectural marvel ö itās well-themed eye candy, and a welcome addition to DCAās skyline. The food is top-notch Italian-Californian cuisine.

But the numbers donāt lie, and the bottom line is... well, the bottom line. Statistically speaking, Americans drink carbonated sodas, not wine. Does the concept of wine, which many know nothing about, intimidate them away from buying anything here? Undoubtedly, that is a major cause.

But the real problems may lie deeper. DCA was designed to lure tourists into longer stays at the Disneyland Resort, so the parkās target audience is out-of-area families. Do families want a wine education and tasting experience? Possibly. But at $50 per person? Most assuredly not. The absence of major crowds at this facility is nothing more than market forces at work: folks are voting with their wallets. At these prices, the problem is not intimidation but disinterest. And that may prove to be an intractable problem indeed.

And there is one final bit of bad news: Mondavi signed a 10-year lease agreement with Disney, with options to extend. Does this mean Mondavi is stuck with a money-losing lemon on DCA property for the next decade? One would hope they have legal recourse to break the contract.

When Disneyland first opened, Kaiser wanted to close the Hall of Aluminum due to tepid response, Disney refused to allow an empty exhibit and pointed to the contract. It's happened many times since. How the Mondavi drama will play itself out is anybodyās guess. Stay 'tooned...


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