Art Ciocca, founder and chairman emeritus of The Wine Group, shares about how principled entrepreneurship allowed his business to flourish.



My story at the Wine Group began when I was hired by Coke New York in 1974 to build the brands of the Franzia Wine Company. Just when we were ready to start marketing and brand building, Coke New York got out of the wine business because it didn’t fit the needs of consistent quarterly earnings for a public company. I said, “This is a damn good company, and if you don’t want it, I’ll buy it.”

My five partners and I put every penny we had into this thing. I think we were leveraged 26 to 1 when we finally concluded the deal. The journey was more important to us than making a lot of money short term. At the Wine Group, we knew we had to change the paradigm to be successful. What put us on the map was boxed wines. It took us two years of agony to get it going. We had wine that leaked all over grocery shelves. We could have thrown the towel in, but didn’t; because there were huge consumer advantages: more convenient, easier to pour, easier to store, stayed fresher longer. We offered five liters for the price of a four liter package, which gave us a huge advantage over our competition.

The Wine Group has grown from a small, failing company to the second largest wine company in the world. We have over 50 brands including Franzia and Cupcake and Concannon. We sold 65 million cases last year. What made our business successful was principled entrepreneurship. Our core value has been, from the outset, to create long term sustainable value for all of our stakeholders: the employees, customers, suppliers, and stockholders.

We’re seeing a breakdown in values across society today. People have a mentality of want to get rich fast; without creating any value, looking for favoritism, tax advantages. You get wealth redistribution as opposed to wealth creation, and society suffers. The people that get hurt the most are those who can least afford it. I wanted to fix some of that, and to get people thinking in a much more principled way.

Two years back I read a Wall Street Journal op-ed by Tim Busch entitled “Teaching Capitalism to Catholics”. Tim explained that principled entrepreneurship ties in perfectly with Catholic social doctrine. Tim is one of the founders of the Business School at The Catholic University of America to teach kids about this. The more I learned about the business school, the more I liked it, and the more I personally wanted to get involved.

Tim Busch, to his great credit, said, “Why don’t you visit the University before you make that decision?” I got to meet this very impressive group of directors. Listening to their commitment to make this business school work; that just made me all the more convinced. My wife and I invested $10 million in the Arthur and Carlyse Ciocca Center for Principled Entrepreneurship at The Busch School of Business and Economics.

Educating students, who will build principled businesses and multiply their efforts through other people, will have lasting value for a long, long time. We’re excited about this opportunity, and we’re looking for more opportunities, both now and as part of our estate plan in the future.

This is an extraordinary period in the history of our lives. I think if others found investments that marry with their passions, the way we have, it’s almost inconceivable how far we can go. The stars are aligned. This is the time to truly make a difference.