Mike Kelly (MBA ’22) chats with Daniel Schmid (MBA ’22) about how the 1661 Schmid Family Vineyards are bringing new ideas to an old industry.
Tell us about your background and what inspired you to become an entrepreneur.
Growing up in my family’s winery in Austria was full of entrepreneurial challenges. How do you set the price of a bottle of wine? Which products are complementary to our wine? What do our customers want? I’ve always enjoyed interacting with customers and being hands-on while helping out with a farmer’s market or in our store. Beyond the cellar there are stories of me selling stones to my relatives (don’t ask) or drawings to my neighbors when I was a kid (I really can’t draw very well). My first professional experience was working in a Fintech start-up in Austria, and when I found myself in a more corporate setting, I felt that starting and owning new initiatives was extremely rewarding.
What is the problem you are trying to solve?
I’m trying to solve two problems. First, how do we grow our family’s generational winery from a family business to a self-sustaining, healthy business that can be run by a non-family team? Many small-scale wineries stay alive through the efforts of their owner rather than a healthy business model. Our challenge is therefore to preserve our passionate and unique approach to wine making while bringing in a professional team that can continue to develop our vineyard.
The second challenge we are trying to address is that agriculture accounts for 19% of global CO2 emissions. Much of these emissions come from raising livestock as well as growing crops such as rice. However, I believe that wine as a differentiated product should serve as a leading example showing that nature-based agricultural products can preserve our planet and our climate rather than harm it.
What is your solution?
We found an innovative approach to help us in the initial phase of managing the business transition and to position us to integrate a team later. In particular, we have created a flagship leadership training program for graduates and young professionals in their gap year. The program is called “CEO for a Year”.
Through ceoforayear.com, we recruit top business talent from some of the best schools in the world. In particular, we allow a candidate to take responsibility for our cellar for an entire year. They will learn what it means to run a small business and know all its functions – from people leadership, to production and inventory management, to marketing and sales. All while spending a year living in a vineyard near Vienna, Austria, and becoming a wine expert in the process.
We also take a no-compromise approach to producing the highest quality wines while protecting our planet. Although sustainability has been a buzzword in the wine world for years, it is often not backed by clear metrics and rarely focuses on CO2 emissions. Our winery’s long tradition of caring for nature has led us to transform vineyards into biodiverse ecosystems and has been recognized with sustainability awards in the past. Now we have launched a new effort with the goal of becoming the first truly CO2 negative winery and setting an example for other small businesses and the rest of our industry. We want to achieve this by employing sustainable agricultural practices (eg no-till farming) and an ongoing effort to reduce lifecycle emissions (eg electrification of vehicles).
What was the inspiration behind your business/idea?
We were able to trace the history of our winery back to 1661. In this story, I was continually inspired by the individual stories of some of our ancestors. The name of our new wine—Wolfshuber’s Secret— pays homage to some of these stories.
Who is the team behind your startup?
I am supported by my family, especially my brother Josef, who has decades of experience as a winemaker.
How did you start?
Last summer I shipped 600 bottles of our wine to Boston, which was the first time my family had exported our wine on this scale. Even though the wine was primarily for friends here at HBS, in a sense it was my start of taking over and reviving the winery. It also inspired me to rethink our label and launch the initiatives I mentioned earlier.
I am currently looking for importers and distributors who will bring our wine to restaurants and stores in the United States. We are recruiting our “CEO for a year” and we are about to bottle the inaugural vintage of our Wolfshuber’s Secret Grüner Veltliner white wines.
On top of that, we are just starting to build our social media presence. You can follow our journey on Instagram (@schmid.wine) and check out our website at schmid.wine.