Leading with Quality & Innovation: Supreme Knight Scott Scheid

Leading with Quality & Innovation

KOV Supreme Knight Scott Scheid and his family have been major contributors to innovation and growth in the wine industry in Monterey County, California for nearly 50 years. In 1972, when the wine region was in its infancy, Scheid’s father Al began growing grapes to sell to other wineries as a financial investment. At the time, the company was called Monterey Farming Corporation, and positioned itself as producers of high quality premium grapes. Seeing opportunity in the untapped wine market, the company purchased additional acreage of unplanted parcels and then, as the California wine industry began its unprecedented growth, produced bulk wine to meet the wineries’ increasing demand for quality juice. As the world of wine continued to expand, the Scheid family saw yet another opportunity: to create a grapes-to-glass business of authentic and elegant wines that could compete on the global stage.

Today, while still selling grapes and bulk wine, the company (now called Scheid Family Wines), produces over 700,000 cases annually of estate-grown wines at its state-of-the-art winery near Greenfield, California in the Salinas Valley. The wines are sold under seven brands with distribution in all 50 states and 20 international markets. The company also produces nationally and regionally distributed exclusive brands for specific clients and distributors.

Scott joined Scheid Family Wines in 1986 after working as an options trader with E.F. Hutton and Co. in New York City. He served as Vice President and then chief operating officer until 2000 when he became president. During this time, he has overseen the ever-increasing growth of Scheid Family Wines and upheld the company’s reputation as a problemsolver for wineries, as well as an innovator in producing high-quality, sustainable wines. Scheid, like his father before him, is a dedicated supporter of the California wine industry. He has served as Vice Chairman of the California Association of Winegrape Growers (cofounded by Al Scheid) and as President of Monterey County Vintners and Growers Association. He is currently a District Director for the California Wine Institute. The Scheid family is actively involved in the Monterey community. The company is the wine sponsor for the Monterey Jazz Festival, the longest running jazz festival in the world, and supports many local charities through donations, leadership, pouring at events and teaching. Scheid’s wife Nancy helped establish the local chapter of the Leukemia & Lymphoma Society, and in 2016 was named the organization’s Woman of the Year. Scheid’s sister Heidi, who joined the family business in 1992 and now serves as executive vice president, won the 2020 Person of the Year Wine Star award by Wine Enthusiast magazine. The award highlights individuals who have made outstanding achievements over the past year in the wine and alcoholic beverage world.

The Arbor recently caught up with Scott Scheid at his home in Monterey County. An active supporter of KOV, Scott was eager to share his family’s place in the history of winemaking in Monterey County, as well as his enthusiasm for KOV.

By Nan McCreary

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Supreme Knight

Orange County Orange County

Scott Scheid

The Arbor (TA): How did you first develop an interest in wine?

Scott Scheid (SS): We are a financial family who found our way into the wine business. My father, who lived in Southern California, was an investment banker by trade. As post-war Americans adopted more aspects of European cultures, he predicted that wine would become a part of that, and there wouldn’t be enough grapes in all of California to supply the demand. He saw opportunity in that market, and consulted with A.J. Winkler, noted viticulturist at the University of California at Davis, to determine the best area for grape growing. Winkler advised him that Monterey County was not only suitable for growing high quality wine grapes, but also was an untapped market. Plus, land was more affordable than in Napa or Sonoma. Al gathered a group of investors, formed limited partnerships, and bought land to grow wine grapes contracted to statewide wineries. The plan was that after the vineyards were planted and in full production, the wineries would buy out the contracts and own the vineyards. That was the exit strategy for the investors. As it turned out, the vineyards were successful and so were the wineries as demand for wine grew nationwide, but after 14 years, they were still not ready to buy out their grape contracts.

TA: This is when you joined the company, right?

SS: Yes, I had returned from New York and was still working for E.F. Hutton. My dad asked me if I was going to be a stockbroker for the rest of my life, which was his way of inviting me to join the company and explore together the opportunity he saw for us to grow the business. While our winery customers did not want to purchase our vineyards, they were continuing to buy our grapes per their contracts, and the demand for wine was increasing. During this time, we were improving our vineyards and providing grapes to an expanding base of wine companies, including Heublein, Vintners International, Kendall Jackson, Trinchero, Gallo, Fetzer and others. With the wine business taking off, we decided to reinvest in the business and by the end of 1996, we had bought out the last partners.

TA: Was producing bulk wine part of your plan?

SS: Not in the beginning. But by the late 90s, the wineries were overloaded. They were running out of capacity and didn’t want to build more wineries in Napa or Sonoma. The big wineries, in particular, needed others to make wine for them so they could invest more in marketing and distributing their products. In California, our reputation preceded us for solving supply problems, so certain winery customers asked us to make wine for them instead of delivering grapes. For five years or so, we made wine for such customers by sending our grapes to other wineries to be made into wine for them. This is called custom crush. By 2004, we were custom crushing at seven wineries, including Wente Vineyards, Castoro Cellars and Golden State Vintners in order to make wine for our customers. We had specifications and wine making styles to meet and spent a lot of time being the squeaky wheel at the custom crush wineries to make sure they were proceeding according to our customer’s wishes.

TA: How were you able to keep up with all of this growth?

SS: Innovation is one of our core values, and we realized that we needed more crush capacity, so we began investigating options for building a state-of-theart winery at our Hacienda Vineyard near Greenfield in Monterey County. We spent a year visiting all of our friends’ winery facilities — Trinchero, Gallo, Coppola, Bogle, many others— to learn best practices and see what could work for us. Finally, in early 2005, we made a $25 million initial investment and built the first phase of our winery. That year, we had a big harvest, and filled the winery with grapes. In 2006 and 2007 we expanded the winery, then built a bottling facility a few years later.

TA: When did you begin growing and marketing your own wine?

SS: Actually, we produced our first wines under the Scheid Vineyards label in 1989. It is our family brand and has remained a small production highend portfolio of our best wines - about 10,000 cases each year. It is mostly sold direct-to-consumer and is available in our two tasting rooms: one at the winery in Greenfield and the other in Carmel. We have about

3,000 members in our Scheid Vineyards Wine Club today. So, our family brand was a very small part of our business over the years while we continued operating our grape growing and bulk wine business, but about the time of the 2008 recession we began to consider whether to make wines for national distribution. We had all the tools we needed: 4,000 acres of vineyards that had been upgraded and modernized with vineyard information systems, including irrigation and data sensors, skill at winemaking for many diverse customers in a new state-of-the-art winery and a spirit of innovation and entrepreneurship. Coming out of the recession, we acquired our first distributor, and began selling wholesale finished wines into the market. This was like starting a new business: we had added the third leg to the stool (in addition to selling grapes and bulk wine), so we had to consider warehousing, bottling, marketing, a national sales team and compliance with state and national laws; all of the things that go along with vertical integration in the wine business. It’s been 11 years since we made that decision, and we’ve had great growth, even with Covid. We will ship over 700,000 cases of wine this year which includes our own global brands as well as a large business making exclusive wines for companies like Kroger, Aldi, Safeway, Whole Foods and Trader Joe’s that are available only at their stores.

Father and son Supreme Knights Al and Scott Scheid

TA: You now market your wines with over seven different brands. Tell us about this strategy.

SS: Our brands are about what the market wants — that’s the end game. Since the beginning, we have taken opportunities to solve supply problems for the industry. As wines became more a part of the culture, we began growing grapes. And then as demand grew, we supported growth of the wineries with bulk wine. Now we are supporting our own growth, and making wines that consumers want. Our brightest brand right now is Sunny With a Chance of Flowers. It includes a Sauvignon Blanc, a Chardonnay and a Pinot Noir. It’s in the trending “Better-for-You” category, with zero sugar, 9% alcohol by volume and 85 calories per five ounce serving. A Rosé and a Cabernet will be added next year. Our globally distributed portfolio also includes District 7, Ryder Estate, Ranch 32, Metz Road, VDR, and Stokes’ Ghost.

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TA: You said you grow 39 different grape varieties. Why so many?

SS: We love experimenting with different varieties and flavors in the diverse appellation of Monterey. It gives us a “spice rack” in the winery for creating and blending wines. This has served us well for our winery customers as well as our new business delivering finished wines to consumers. Our Scott Scheid in full Cadre Officer regalia vineyards are located over a spread of 70 miles between two mountain ranges in the Salinas Valley with daily winds emanating from the Monterey Bay, so we have many different microclimates. Cabernet Sauvignon and Petit Verdot do well in the south, near Paso Robles, and Pinot Noir and Chardonnay prosper further north toward Greenfield and Soledad. While the daily temperatures vary, all of the vineyards are cold at night, and this diurnal range is great for grape growing. We consider ourselves to be Pinot Noir specialists; we grow 20 different clones on six different vineyards.

TA: What are your goals for the future?

SS: Our vision statement says, “By the year 2025, Scheid Family Wines will become one of the most recognized wine producers in quality, innovation and sustainability in the world.” It’s a lofty goal, but it’s not impossible. We get feedback that our wines are excellent and over deliver for the price. We are increasing our organic vineyard acreage and have been sustainably certified for some time. In fact, we’re carbon negative. We generate 200% of the power we need to run our entire winery campus from a wind turbine that creates energy from the winds that sweep down the valley from the bay. As far as being known, we’re getting there. We are selling wines world-wide and have plans to keep growing. And in 2020, Heidi was awarded the Person of the Year Wine Star Award by Wine Enthusiast.

TA: Tell us about your involvement with KOV.

SS: Our company mission is “bringing people together to enjoy and savor life.” That ties in with KOV because today wine is most often used to bring family and friends together. We see wine as more and more a part of American culture, especially in social media and new trends, such as the “Better-for-You” movement. My dad is a Supreme Knight (elevated in 1989) and he sponsored me when I joined the Monterey Chapter in 1998. I served on the Chapter Cadre for many years, and really enjoyed planning and working on events. It’s a great group, because if there is anyone who enjoys and savors wine, it is the members of KOV!

TA: Thank you for taking time to talk with us. And congratulations on being elevated to Supreme Knight. It is obviously well-deserved.

SS: Thank you. I am happy to help in any way I can.

Scott Scheid with sister Heidi and father Al