Roshambo Winery: A Case Study in Failure

A few years back, we visited the newly-opened Roshambo Winery. Today Roshambo is a case study in failure. But back in 2005, it was something to see. The winery was on the east side of Westside Road in Healdsburg, a mile or two south of Madrona Manor. (Madrona Manor is highly recommended for a stay, but the last time we were there the restaurant had switched to a tasting menu format. Not to our taste, but there are plenty of good restaurants in Healdsburg, about a mile away.)

Roshambo was housed in a contemporary concrete and steel structure, not a welcoming face. But that’s never stopped us before.  We went inside and were somewhat impressed with the wines. But we were less impressed by the prices. (It’s hard to describe the place.  Luckily, the web never forgets.  The exterior is below.  Click here and here for interior images.)

Roshambo came to mind the last few days when we finally cracked open their 2007 chardonnay.  Lots of citrus and grapefruit, not much oak or vanilla.  Very pleasant on a hot summer evening.  Norma rates it “quaffable.”

Sadly, Roshambo is no more.  Started by Naomi Brilliant (described in a  New York Times profile as a “social butterfly”) around 2000 when she was 27, she plowed the vines under in 2010 and planted vegetables.  She actually sold the winery building to Twomey in 2005.  She leased a tasting room in 2007, but that was close to the end of the line. Ms. Brilliant set her goal as “trying to convince her generation that wine is a blast.” At the advanced age of 37, she “realized [she] wasn’t having any fun doing this any more.” (All quotations are from the New York Times article linked above.)

“The profits at Roshambo (a name for the children’s game rock-paper-scissors) evaporated as sales dwindled from a high of 10,000 cases in 2005. Last year, Ms. Brilliant reduced production to 1,000 cases and decided to make no wine during the 2009 harvest, selling all the grapes.

But her biggest problem was that Roshambo wines never found their market. For the sort of folks who attended her events, the wines were expensive, $15 to $30. And she never positioned them as anything other than party quaffers.”

Exactly.  Any winery can sell one bottle of wine based on almost anything: a cute label, an attention-grabbing name, shelf position in a retail store, an unusual bottle, and so on.  But that won’t keep you in business long.  Wineries live or die on repeat sales.  Like any other monopolistically competitive market, the trick is to develop a product that has the characteristics and price that a particular market segment can afford. Many of the papers in the Journal of Wine Economics use hedonic regression, a statistical technique that relates prices to product characteristics. We search far and wide for pinot noirs that suit our taste.  We’ve found a number — Jack Creek Cellars, RN Estate, Siduri, Lynmar Estate, Hartford Family, Kenneth Volk, Fess Parker, Cambria, Coghlan, Archery Summit, A to Z — hey, if I could list them all,  we wouldn’t need an entire website!  When we find a good one we stick with it.  If we really, really like the wine we join their club. (The image below is the A to Z home page.  I couldn’t resist.)

As Ms. Brilliant put it, ‘I am an artist. My art is to bring people together.’ While she enjoyed the grand gesture — flying performers in from New York City for her Drag Queen Brunch — she made Roshambo the highlight of Sonoma County wine events by cranking up the live music and encouraging her friends to forgo the sober sipping and spitting and simply drink her wine. [Editors note: we try to keep up with what’s happening in Sonoma County, but we do not remember ever hearing about any of these events.  We are skeptical of the claim that Ms. Brilliant’s events were the highlight of anything.]

‘We had a lot of success getting people to dress up,’ she said. ‘I always tried to be fabulous.’ ”

More from the Times profile:

“But when the parties ended, Ms. Brilliant faced the day-to-day operations of a winery she described as a financial drain.

Her business plan? There wasn’t one. The Roshambo events, where tickets typically sold for a modest $10 to $15, lost money. She rationalized the expense as long as the wines were selling. ‘If all of the people who say they love my wine and support me would have bought my wine,’ she said, ‘things would have been a lot easier.’

Pitching her wines to retailers was like ‘selling my soul,’ she said. ‘There is always someone else who can make wine for less and offer it to stores at a lower price. It would have been insanity to keep lowering the price.’

She said that big corporations own many of the wineries that are perceived as family businesses, and control the means to distribute wine. ‘They make it very difficult for the real start-ups,’ she said.”

Those statements, of course, fly in the face of the massive number of new wineries that have opened in California during the last decade.  Many of them are doing quite well by producing wines whose quality matches their price.  Ms. Brilliant’s problem was that she never managed to accomplish that most basic task. I guess the real world had to intervene sooner or later.