An American entrepreneur in Burgundy

The work that Michael Baum has been doing at Château de Pommard shows what an injection of energy - and money - can do. Richard Woodard reports.

Michael Baum/Baum-Carabello family
Michael Baum/Baum-Carabello family

If the recent history of Château de Pommard illustrates the succession challenges currently facing the French wine industry, its new direction could also offer a template for other, similar estates to follow – if they can afford it.

Since 2014, it has been owned by Silicon Valley entrepreneur and investor Michael Baum and his wife, Julie Carabello – the first American owners of a winemaking château in Burgundy, who have brought both energy and money to the property. 

“We are definitely disruptors,” says Baum, whose CV includes a number of successful technology start-ups. “But I would like to think we do that in a way that respects what’s good about the past, not just the past in itself.”

Revitalisation

From 1726 until 2003, the property was owned by only three families, all of Burgundian origin. After that, it belonged to property tycoon Maurice Giraud, from Haute-Savoie.

Giraud’s busy tenure was characterised by extensive modernisation work and a focus on oenotourism, but pales in comparison with what has happened since: the embrace of organic and biodynamic viticulture in the Clos Marey-Monge vineyard and an intensive phase of capital investment covering two new wineries, a WSET wine school and a five-star hotel.

The fresh approach began in the vineyard, along with the “unmissable” opportunity to adopt biodynamics in what is claimed to be Burgundy’s biggest “monopole”, the walled, 20-hectare Clos Marey-Monge.

Experts were brought in – Claude and Lydia Bourguignon for the soils, Antoine Lepetit de la Bigne for biodynamics – and the Clos was subdivided into seven plots, including newly planted Emilie (first vintage due in 2021) and the flagship Simone (0.54ha). From 2017, the plots have been bottled and sold separately, in addition to the core Clos Marey-Monge blend.

The business also has a roster of sourced wines from across the region, which Baum and winemaker Emmanuel Sala will expand – especially on the Côte de Nuits – once two new wineries (one white, one red) are completed for the 2021 harvest.

The current winery can produce 200,000 bottles, but the two new facilities will have a combined capacity of up to 1m bottles, although Baum doubts that production will exceed 800,000 bottles “because we won’t be able to find enough quality fruit”. 

For more than 20 years, the wines have been sold to private clients, an approach which Baum likes: “We make a €100 wine and sell it for €100, but my neighbour might get €30, or €20 in 2019 [when yields were down],” he says. “There are too many hands in the food chain … We would not want to have more than one person between us and the customer. Five years ago, Microsoft was not in a good place, because it had stopped talking to customers.”

A limited drive into the on-trade began about a year ago. This will account for about 15% of the company’s volumes in 2020 but, in time, might hit 25%. “From an economic standpoint, the on-trade doesn’t really make sense,” Baum says. “But it’s important to us because we want to have relationships with sommeliers, to get their feedback. The right sommeliers have a huge appreciation for organic and biodynamic wines. It’s also helpful from a branding standpoint.”

Château de Pommard’s new business model is a multi-faceted one that is about more than just making and selling wine: there’s the hotel, the Ecole V wine school (there is now a Paris branch), the corporate events, visitor “experiences” and hospitality.

Roadblocks to change

Initially, not everyone bought into the vision. Baum describes the first two-and-a-half years of his tenure as “cleaning house”: the workforce of 45 was whittled down to 12-14 before expanding to its current level of 111, with 32 open positions. “We didn’t have the right team,” says Baum. “We had a team of people thinking more about the past than the future.”

For all his respect for Burgundy’s winemaking heritage, Baum isn’t afraid to enforce change. “Being that I’m from Silicon Valley, I definitely have an innovation bone in my body,” he says. He was told that a new bottle shape – “I did it with a friend who designed the original Evian water bottle,” he says casually – wouldn’t work because its lipless neck made it impossible to lift the bottle out of the mould. The solution was an indentation in the neck, concealed by the collar.

“We went all over the world and bottle companies said they couldn’t make it,” Baum recalls. “Then, when we came up with the new technique, the Italians said they could make it; then the French found out and said they could do it after all. Wine is not a great industry to sell innovation into – it’s smaller and it’s reticent to adopt new technologies.”

This innate conservatism, Baum believes, has to change if wine is to evolve and thrive in the future. “Wine consumption has stopped growing and/or is declining in developed countries around the world, and yet the number of winemakers continues to grow in areas like California, Oregon, Australia and China.” 

He says the winemaker’s business model must also evolve. “This is where we see ourselves playing a role in the industry – not just with our own winemaking business but leveraging what we’ve learned about multi-faceted business models to help other producers, especially sustainable producers. We’ll be talking more about this in a few months.”

The multi-faceted approach at Château de Pommard may be attractive to wine companies in Burgundy and beyond, but it’s one that demands big spending at the outset. As French wine estates struggle with issues of succession and the funding of future investment, this domaine is unlikely to be the last to pass to a new, cash-rich owner from beyond the country’s borders.

Richard Woodard

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