Rising Son.

Growing up as the legacy of a living legend isn't easy. "Dad was very difficult to work with and particularly hard to work for," reflects Michael Mondavi, the 58-year-old president and CEO of Robert Mondavi Corporation (MOND).

But it's not his father's vineyard anymore--and, since taking the helm in 1994, the famed winemaker's son has been busy putting his own mark on the company that bears his father's name and even sports his profile on its logo. Under his leadership sales have jumped from $167 million to $427 million, and MOND's stock price has climbed from $9 to $45.63.

"It's Michael's winery, for sure, and he's done a fantastic job bringing wine to a broader audience," says Caroline Levy, beverage analyst for UBS Warburg. "Michael's created scale and leveraged the infrastructure with an array of brands that help insulate him from market vagaries."

Not that Michael Mondavi's father has abdicated his leadership position altogether. "Dad's my ambassador to the world and my best salesman," says Mondavi. "He was our biggest critic in the early years, and we needed it. But in the last decade, as he delegated the leadership and day-to-day management of the company, he's become our biggest cheerleader."

For a company born of a family feud worthy of Falcon Crest, that's a happy turn. "My grandmother asked Dad to leave the family business, Charles Krug Winery, in 1965 after my uncle, Peter Mondavi, and my father 'disagreed' on how to run things," recounts Mondavi, who says his father responded by marshaling his family together, borrowing $100,000 from relatives and angel investors, and building his own winery.

Today, Oakville, CA-based MOND is the category leader in premium wine production and fourth in total industry sales. Its landmark mission-style winery sits on a 550-acre Napa Valley vineyard named To Kalon (Greek for "highest good"). Over the years, MOND has siphoned off a 9.6 share of the U.S. varietal wine market and moved into 90 foreign markets; 10 percent of its sales are now from overseas.

MOND now encompasses 16 separate labels representing 80 individual California wines, as well as partnerships with vineyards in Australia, Italy, Chile, and France. Patriarch Robert Mondavi orchestrated MOND's first collaboration with the Baron Philippe de Rothschild of Bordeaux's Chateau Mouton in 1978. The result was "Opus One," released in 1984 at $50 a bottle. The current release, a luxury ultra-premium wine (the $25-plus range) produced from grapes grown in an isolated 104-acre vineyard, sells for $140.

MOND's popular premium wine ($5 to $8), Woodbridge, accounts for a whopping 56 percent of its sales. Robert Mondavi Coastal (19 percent of sales), launched in 1994, has proven to be one of the fastest growing labels in the brutally competitive super-premium ($7-$14) market, while the ultra-premium ($14$25) Robert Mondavi brand (14 percent of sales) is most often found in hotels, restaurants, and wine shops. The remaining sales are divided among 13 brands.

To continue the company's growth track, Mondavi hopes to convince Americans to adopt a more European attitude about wine. While Americans spend over $18 billion on wine, according to California's Wine Institute, the U.S. ranks only 36th in per capita consumption. About 12 percent of U.S. adults account for 88 percent of wine consumed, asserts a report published by St. Helena, CA, consulting firm MK.

"Wine is a tough sell in the U.S.," explains Jon Fredrikson of Gomberg-Fredrikson, the San Francisco-based wine industry economists. "Wine isn't indigenous to America, and people are intimidated by wine lists as the names are tough to pronounce. Beer is much, much more user friendly."

But Mondavi sees marketing--or the lack thereof--as the real culprit. "Our marketing efforts suffered until the early '80s, because we were appealing to the wine and food societies, all those black tie events," he laments. "We were complacent, cocky and started believing our own press. For decades, our industry sent the wrong message, that 'wine is for special occasions.' while the breweries told people that 'beer is the beverage of every occasion.' That's crazy. In the old country (Italy), wine was a blue collar beverage, not an elitist, white collar drink."

To reach out to the untapped market, Mondavi is exploring new channels. "We need to reach people who associate wine with food, health, and the good times in their lives," he says. "Our goal is to grow the customer base by removing wine's mystery, while still maintaining its magic."

When he heard Disney planned to open a 55-acre California Adventure theme park in 2001, Mondavi saw an opportunity to do just that. "We thought, 'Gee, the wine and grape businesses are a very important part of California history and the future. Let's talk with them."' The result? Disney's Golden Vine Winery, featuring a 325-vine mini-vineyard, restaurant, deli, and, of course, a gift shop devoted to Mondavi wine. "With Disneyland, we've got the best story teller in the world to tell wine's story," he says.

Mickey Merlot, official wine of Disneyland? "Please, no," Mondavis says, rolling his eyes. "But the numbers are interesting. Some 350,000 people yearly tour our winery in Oakville vs. 10 million to 12 million visitors at Disneyland. Disney projects 4 million to 7 million through the Disney California Adventure, and eventually 3 million into the Golden Vine Winery. And these guests are younger than our average winery visitor."

Moving beyond traditional wine specialty shops into new retail channels is also helping wine shuck its for-special-occasions-only image. The COSTCO wholesale club chain, now the U.S.'s largest wine retailer, absorbs 8 percent of MOND's total case volume, while supermarkets, appealing to an increasingly sophisticated buyer with $7-$14 wines, are fast becoming the new "fine wine purveyors."

Mondavi also does his best to spread the gospel personally, spending 60 percent of his time on the road. Equally comfortable with his CEO peers and his field workers, this farmer's son is no stranger to getting his hands dirty, having suckered vines in his grandfather's fields at age 11. Since childhood, he's had a front row seat to every kind of business challenge. In the wine business, an ill-timed freeze, soaking rains near harvest, or a vineyard assault by the colorfully named but devastating pest, the Glassy Winged Sharpshooter, can threaten crop yields.

But the most pressing current threats are intensifying competition and raging industry consolidation. E. & J. Gallo winery, the world's largest winemaker with a 25 percent share of the U.S. market, moved into MOND's turf with its premium launches, Turning Leaf and Gossamer Bay, which are gaining a following. And last year, Australia's Foster's Brewing Group--a firm with brand-building expertise--snapped up neighboring Beringer Vineyards for $1.5 billion.

But MOND has done its own share of competitive maneuvering, including a 1993 IPO that raised expansion capital while leaving the Mondavi family with 80 percent of voting shares. "Michael saw the big picture in 1993 when MOND went public to address the consolidation threat," asserts Merrill Lynch beverage analyst Douglas Lane. "The family was willing to dilute their equity in order to capitalize acquisitions and develop new vineyards, finance international partnerships and alliances, all while gaining market share at the expense of rivals."

Currently, the vineyard outsells its production capacity by far, sourcing only 12 percent of its grapes from MONO-owned or leased California vineyards and purchasing the rest from independent growers. MOND's long-term goal is to own 25 percent of its grape production.

While acknowledging that consolidation-and the resulting marketing clout-- is a competitive concern, Mondavi shrugs off recent winery couplings. "If Beringer had merged with Allied Domecq's Clos du Bois, or with privately held Kendall-Jackson [Wine Estates], or been acquired by Brown Forman (Fetzer, Korbel, Bolla), that type of consolidation would have meant additional risk for us," he says. "It would be more difficult for us to have category management as luxury wine specialists, competing with a new portfolio that's worth more than $1 billion in domestic sales."

If and when the mega-merger craze hits the wine sector, MOND will be ready, asserts Mondavi. "The competition always targets Robert Mondavi," he shrugs. "If we ever have those circles taken off our body, I'm going to feel like a failure. Our attitude is, 'Let 'em target [us], because by the time they shoot, we've gone somewhere else."'

vital statistics

Michael MONDAVI CEO, Robert Mondavi Corp.

"In the old country, wine was a blue collar beverage."

Birthplace: Napa, CA

Age: 58

Family: Wife, Isabel; two children, the oldest, Robert Mondavi, works at the winery.

Education: B.S. in business, University of Santa Clara, 1966.

Hobbies: Riding BMW and Harley-Division motorcycles, fly fishing.