Entrepreneur Magazine, Business Unusual: How This Entrepreneur Reworked His Business Idea in the Face of Financial Armageddon

business unusual

FEBRUARY 27, 2015

From the March 2015 issue of Entrepreneur

By Lambeth Hochwald

 

The financial crisis of 2008 changed everything. Michael Dorf, who founded legendary New York City rock venue the Knitting Factory in 1986, was just three months away from opening a combined winery and music club in Manhattan that would feature visible steel fermenting tanks and a refined dining experience. Dorf anticipated bankers buying wines by the barrel.

 

But the subprime mortgage crisis doused those expectations. “We were not only in financial Armageddon, but there was such a reversal in big spending and ostentatious behavior,” Dorf says. “It became taboo.”

 

He had to find an alternative concept. “I came to an internal phrase, something I call being ‘vessel-agnostic,’ which meant that I realized that it didn’t matter if I sold wine by the barrel or by the glass.”

 

He kept the steel tanks but shifted his business plan from barrel sales to a by-the-glass tap wine service.

 

“When I conceptualized City Winery,” Dorf recalls, “I was getting older, I had young kids, and going out was rare. I wanted to build a place where I could eat a lot, drink a lot and consume a lot of culture.”

 

The City Winery in New York was followed by locations in Chicago, Nashville and Napa, Calif. The company now has a total of 500 employees and plans to open establishments in Atlanta, Boston and Toronto by the end of 2016.

 

“We are focusing on larger urban environments that have sophisticated cultural and culinary audiences,” says Dorf, who serves as CEO. “We’ll open in cities that are experiencing robust and strong hospitality markets.” Dorf projects gross revenue to exceed $40 million in 2015.

 

Staying true to his rock-club roots, Dorf made music a major draw at the venues, with performances by iconic rock, country and bluegrass artists such as Elvis Costello, Sinead O’Connor, Steve Earle and Tim O’Brien. Tickets are priced from $35 for bar stools to $125 for seats up front. Each City Winery venue has a capacity of about 300.

 

“That number has become magical for us,” Dorf says. “I use the words ‘intimate concert experience’ to define our events. The definition of intimacy is when an artist or someone on the stage can look into the eyes of every person in the room. Once you can’t have eye contact, you can’t have intimacy.”

 

But while the concerts are central to the overall City Winery experience, the business focus is on the wine list and Mediterranean menu.

 

“We don’t make money at all on ticket sales,” says Dorf, explaining that 80 percent of the box-office take goes to the artists. “Our focus is on making our profits from food and beverage, just like any restaurant.”

 

Much of that comes from the wines produced in-house. City Winery has contracts with vineyards in California, Oregon, Washington, New York and Argentina; 60 percent of the wine produced at the four locations goes into an eco-friendly, on-tap system before it’s served, which lowers packaging costs for higher margins.

 

“By making wine in our facilities, we’re not just selling it and offering a good wine list,” Dorf says. “Customers can smell the fermentation and see the tanks, which gives an authentic statement to what we do.”

 

The company also offers a wine club and barrel membership, in which individuals or companies have the opportunity to join in during the winemaking process, from the selection of grapes to crushing, aging, blending, bottling and labeling.

 

That was part of Dorf’s plan from the beginning: “My goal was and remains to move wine, to show that you could make it in an authentic manner in the middle of a city and to offer a luxury concert experience.”

 

Long-distance leadership
Every year since founding City Winery, Michael Dorf has brought 15 people from each of the company’s U.S. locations, including managers and up-and-coming staffers, to what he calls “base camps.” (The most recent was in Puerto Rico.)

 

“These should never be called ‘retreats,’” Dorf says. “A retreat is just the opposite of what you want to be doing—the idea is to go forward, and a base camp is a great spot where you’re close to your goal but you still have a ways to go.” Here, Dorf explains his rules for fostering a sense of togetherness among far-flung colleagues.

 

1. Connect with your managers. “As a CEO, you can’t be everywhere at once,” Dorf says. “And if it wasn’t for a bunch of our managers, there’s no way we could have gotten to where we are today. These events give us time to really think through what we do, how we do it and how we can improve, as well as focusing on our best practices in terms of our styles of management and how to create some scale but not get too ‘McDonald’s’ about what we’re doing.”

 

2. Help your managers think like owners. “This is one of the biggest challenges for businesses, and a week away can help managers think like owners, to feel like every bottle of wine, every customer is really important.”

 

3. Focus on specific goals. “During our first Base Camp, we distilled our mission statement and talked about office politics. At the top of a hill, I had hidden a whiteboard and some flash cards to get the conversation going.”

 

4. Look at the business through a new lens. “When Steve Jobs died, I had everyone think about us as an Apple product and focused on how Jobs would have approached serving wine and putting on a show. This year I had a rock ’n’ roll photographer as our guest, and together we looked at City Winery through the lens of a photographer. That helped us talk about how we capture the most focused experience for our customers in the short time frame we have to indulge their senses.”

 

Click HERE to read the article on Entrepreneur.com

Lose the fence, add some parking, open the patios…

Since the development began on City Winery Nashville nearly 10 months ago, we have watched the neighborhood grow in positive ways. With every step of the construction, the area became one step closer to a burgeoning and safer community.  It has always been our goal to contribute to that spirit, and now we’re taking it one step further. Today, the razor wire on the fence around our building has come down, and next week the fence will be reduced to only the front section of our building.  We feel this will allow easier access to our parking lot for our guests during open hours, and is a necessary makeover as we enter the spring and open our patios for our guests during warmer months ahead.
As much as we want to protect our patrons and employees, we also prioritize being a friendly neighbor as we grow with Nashville. We are excited to be pioneers in the Pie Town/Sobro neighborhood, and look forward to new neighbors coming in this spring (Flo Thinkery, Frothy Monkey, Made In Network, etc.)
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We heard voices in our heads similar to that of “Mr. Gorbachev, tear down this wall”!   The message was more like “tear down the chain link and razor wire”, but anyway we heard the message, we agreed and are thrilled to be making this next step!

See you for some wine on the patios very soon!

City Winery Chicago produces new wine: West Loop Red

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City Winery West Loop Red 2013, California

City Winery Chicago’s third version of the infamous West Loop Red is coming! Made by our winemaker Robert Kowal (@cwvinewhisperer), the 2013 West Loop Red is a great blend featuring highlights of bold red varietals blended into a conducive concoction that is quite the sipper!

Bottles in 750mL and Magnum (1.5L) formats will be available soon at our retail store where other City Winery wines are also available for purchase!

The breakdown: 36% Zinfandel, 26% Petite Sirah, 17% Cabernet Sauvignon, 12% Syrah, 6% Cabernet Franc, 3% Merlot 

Tasting Notes: Aromatic with purple flowers and damson plum, cassis and sage. Ripe and dried red fruit and black, brambly berries. Cinnamon, nutmeg and brown baking spices with vanilla bean. Significant tannin and elevated alcohol to balance out this wine. Should be a crowd favorite. 

Food Pairing Suggestions: Try with City Winery’s duck tacos, skirt steak or the juicy City Winery burger!

Music Pairing Suggestions: Drink this heady wine with the ever rockin’ Leon Russell as he graces us with his presence February 24 & 25!  With a full band and Russell’s charismatic piano playing and singing, the full sounds reminiscent of New Orleans will keep you swirling and sipping to the beat.

For more information on this wine and how to purchase, please email: chicagoreservations@citywinery.com.  CHEERS.

Northstar Winery Game and Wine Dinner at City Winery Nashville

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Northstar Winery is proud to partner with City Winery to present a five course game menu dinner with five paired Washington Star Reds. Winemaker David “Merf” Merfield will be in attendance! For a sneak peek at the menu, please click here.

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Northstar is dedicated to the production of world class Merlot, showcasing Washington’s star grape variety.

From the early days of the Columbia Valley, it has been recognized that Washington Merlot has very special characteristics. The legendary winemaker and mentor André Tchelistcheff used to talk about the absolute clarity of varietal expression that Washington’s Merlot grapes have. Northstar was conceived in the early ‘90’s with a singular focus on this varietal. Our winemaker handcrafts our Merlots; the flagship Columbia Valley Merlot showcases the top 1% of Merlot available in the state. The Walla Walla Merlot, often more rounded in its youth, is made in very small quantities and showcases the unique characteristics of Northstar’s home, the Walla Walla Valley.

Merf has been Northstar’s winemaker since 2005 after moving to the Northwest in 1990, originally to become a craft brewer. The opportunity came to apply his fermantation science background at Northstar, and he’s been an integral part of the Washington wine industry ever since.

We are proud to offer blog readers a $15 discount on the purchase of tickets for this very special event! Enter code WINEANDGAME at checkout to receive.

HOLD ON, SAM’S COMIN’!

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LEGENDARY SOUL MAN SAM MOORE TO BRING RARE, INTIMATE, 11-PIECE FULL BAND PERFORMANCE TO THE CITY WINERY IN NASHVILLE MONDAY, FEBRUARY 23RD

Rock & Roll Hall of Fame Member Promises All The Horns,
Groovy Licks and some Surprise Hits with his Special Guests

Nashville, Tenn. (February 13, 2014) – World-renowned soul singing legend, Sam Moore, will bring a rare, intimate, 11-piece full band performance to Nashville’s City Winery Monday, February 23rd. The Original Soul Man is no stranger to the city, having recently collaborated with bluegrass group Nu-Blu with their tribute to his friend George Jones, titled “Jesus and Jones”. Moore gave a moving tribute to the late great country singer at Playin’ Possum – The Final No Show! at Nashville’s Bridgestone Arena in November of 2013 and kicked off Fan Fest at Marty Stuart’s Late Night Jam in June to a standing ovation. This month’s intimate appearance will be Moore’s first full-band, full-length Nashville concert in more than 10 years.

Hits to expect in this special appearance will include “Hold On, I’m Comin’,” “I Thank You,” “When Something Is Wrong With My Baby,” “I Take What I Want,” “Rainy Night In Georgia” “ Come On Come Over” his Grammy Nominated version of “ You Are So Beautiful To Me” and his monster Grammy winning and inspiration for The Blues Brothers hit “Soul Man,” among others.

Tickets and VIP/Meet & Greet passes are still available to the February 23rd concert at www.citywinery.com/nashville orhttp://bit.ly/cwSamMoore.

The past year has seen Moore very active from coast to coast, with appearances in support of Al Green at December’s Kennedy Center Honors, where he delivered a stirring rendition of Green’s “Take Me To The River” with Mavis Staples. The performance followed appearances at the Memphis Music Hall of Fame induction ceremony in November and September visits to multiple media outlets with Nu-Blu. In August, CBS Sunday Morning profiled Sam including coverage of the Stax Museum opening in Memphis.  You can also see Sam in the Gregg Allman “All My Friends…” tribute concert airing on AXS TV, HDNet and Magnolia Pictures VOD.

Sam recorded a tribute to the late Dr. Martin Luther King, Jr. in early 2014. “They Killed A King” pays tribute to his great friend. The song was released in early April to commemorate King’s passing and inspires all to remember and continue the cause of inclusion and equality.

Moore’s last album Overnight Sensational, produced by Randy Jackson, included collaborations with friends and fans like Bruce Springsteen, Jon Bon Jovi, Sting, Vince Gill, Travis Tritt, Paul Rodgers, Eric Clapton, Billy Preston, Billy Gibbons, and Wynonna. The album’s song “You Are So Beautiful” earned him a Grammy nomination. His 1994 collaboration with Conway Twitty on “Rainy Night in Georgia” earned the pair two CMA awards and an ACM nomination. He has also received the coveted NARAS Heroes Award, been inducted into the GRAMMY Hall of Fame for “Soul Man,” earned the ETAM Living Legend Award and received a Pioneer Award from the Rhythm & Blues Foundation. Rolling Stone Magazine named Sam Moore among the Top 100 Greatest Singers of All Time.

Purchase tickets for the concert and a special meet and greet experience now!