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Silver Oak buying Roshambo Winery

High-end cab maker to get 2nd Sonoma County facility

Published: Wednesday, December 20, 2006 at 3:00 a.m.
Last Modified: Wednesday, December 20, 2006 at 2:35 a.m.

Roshambo, the hipster winery known for its irreverent attempts to reach new wine drinkers, is selling its stylish Russian River facility to Silver Oak Cellars, the upscale Napa Valley cabernet sauvignon specialist.

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Susan Diez, left, and Nami Kim enjoy Roshambo Winery's Drag Brunch last year.

Christopher Chung / PD

The deal, which is not yet complete, would give the Oakville-based producer of $100 cabernet sauvignons its second Sonoma County production facility and help extricate Roshambo's owners from debts incurred in building a $10 million, modern-styled winery on Westside Road.

Neither side would comment on the deal Tuesday, but people familiar with the transaction say a sale has been a long time in coming.

Roshambo, named after the popular rock-paper-scissors game, opened in 2002 but soon ran into financial trouble when the value of the family trust funds behind the venture decreased in value.

"Our job was to stabilize the winery and advise them on a future course," said wine industry adviser Alan Hemphill, hired by the winery in 2003. "We told them to run the business for one or two years, without the vultures circling, and then sell it."

Hemphill is not directly involved in the sale, but said he represented another client who bid on the winery and lost out to Silver Oak.

He said the winery's problem has always been that its owners, the heirs of the late Frank Johnson, overspent on a showcase winery and tasting room before the brand had enough momentum to cover the costs of the debt.

"They built a $6 million winery for $10 million," Hemphill said.

The deal involves the facility and about 35 acres of vineyards surrounding it, but not the brand, Hemphill said.

Naomi Brilliant, owner of the winery and the granddaughter of dental instrument pioneer Frank Johnson, declined to comment until January.

Her family's Frank Johnson Vineyards today owns about 175 acres of grapes in the Russian River and Dry Creek valleys.

The winery earned early critical acclaim, winning the sweepstakes award for white wine at the 2002 Sonoma County Harvest Fair. But its offbeat events and eclectic flair quickly set it apart from wineries that emphasized tradition and sophistication.

Brilliant has tried to infuse Roshambo with a spirit of fun and quirkiness that would help attract new drinkers turned off by the pretentious side of the wine industry. Edgy art displays and hip events - such as rock-paper-scissor contests and a Pirate Prom - have brought the winery some media attention for its irreverence.

"So who are we to think that we can democratize wine and tear down the carefully crafted barriers to entry?" the winery asks on its Web site. "We are artists, farmers, jokers, mothers, fathers, progressives, drinkers, queens, quarrelers ... and winemakers."

While there may be a niche for such a marketing approach for fine wine, industry consultant Vic Motto said it might not fit terribly well with a top-flight winery facility.

"They built a very serious winery and make very serious wine, but they have attempted to sell it with a fun message," Motto said.

That "fun" message may not have been compatible with some wine consumers, creating a challenge for the winery to reach some serious wine drinkers, Motto said.

Silver Oak, on the other hand, aims solely for serious wine drinkers and it hits the mark as well as any winery in the industry, Motto said.

"People line up to buy the stuff," Motto said.

Silver Oak's Alexander Valley cabernet retails for $60 a bottle, while its Napa cab tops out at $100.

The winery has been in expansion mode in recent years.

Ray Duncan established the winery in Oakville in 1972, producing cabernet from the family's Alexander Valley vineyards. He expanded into Napa cabernet in 1979 and opened a Geyserville facility in 1991, said son David Duncan, manager of Silver Oak.

The winery expanded into merlot in 2003 with the opening of Twomey Cellars in Calistoga.

Last year, the Oakville winery suffered a fire that caused $2 million in damage, and it will soon undergo a major renovation that will take it off-line for the 2007 harvest, Duncan said.

"We're going to tear it down and start all over," Duncan said.

For that reason, the winery is searching for a new place to produce wine in 2007. Duncan declined to say whether it is purchasing Roshambo to accomplish this goal.

But Motto said it makes sense for a winery like Silver Oak to continue growing, perhaps into varietals it currently doesn't produce, like pinot noir.

Well-designed, modern wineries in good locations like the Dry Creek don't come on the market very often, Motto said.

This story appeared in print on page 1

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