American Dream Achieved
IBA, as an approximately fifty-year old business brokerage firm serving the entrepreneurial community of the Pacific Northwest, has been uniquely positioned since before the American Bicentennial celebration of 1976 to witness and hear the stories of thousands of people who have lived the American dream through entrepreneurship creating beloved businesses by employees, customers, and communities while finding personal fulfillment and financial prosperity through execution of their ideas, hard work, perseverance, and ability. In an effort to share these stories heard throughout the years by our team of business brokers, who are commonly regarded as the “best listeners” in the M&A industry, IBA has retained highly regarded writer, Nesha Ruther, to tell their stories. It is our goal to share one story a month. It is our hope that you will find the stories as inspirational and motivational as they are to us and the buyers who bought the businesses in IBA facilitated transactions in Washington, Oregon, and Alaska.
The Story of Joel & Rebecca Tefft (Tefft Cellars)
By Nesha Ruther
While other young men were enjoying the simple pleasures of cheap beer, Joel Tefft had more sophisticated tastes. Born to a family of amateur moonshiners in Coeur d’Alene, Idaho, Joel grew up with the art of homemade alcohol. “My uncles and dad used to make moonshine in the bathroom, but I was always fascinated by wine,” he says.
From the time he was in high school, Joel began experimenting with fermented fruits, making small batches of peach wine in his bedroom. “One time I had a bottle that I had left the screw cap on too tight, and it exploded during the night,” Joel recalls, “I woke up with peaches and glass all over my room.”
Joel let his skills age for a while, and after high school, he entered the Navy as a photographer. Later, he and a friend opened a small photography business in Wyoming. Joel eventually found work at a propane company where he steadily moved up in the ranks.
After 20 years, Joel realized he had gone as high in the company as he was likely to go. He left and decided to revisit his childhood hobby. Joel returned to winemaking to find his skills had matured to a rich and flavorful vintage. In the mid-1980s, he and his wife Rebecca began looking for vineyards in California and Washington. “They looked like easier places to get started,” he says. “You didn’t need a million dollars. We found a piece of land that had Concord grapes on it, and we bought the vineyard.” They called their winery Tefft Cellars.
Joel and Rebecca settled in the Yakima Valley, three hours from Seattle, and began familiarizing themselves with the industry. Joel began working as the cellar master at Hyatt Vineyards. “That gave me a lot more experience and expertise, and while I was working for them, we started getting our own winery going,” Joel says.
In 1991, Tefft Cellars produced its first 500 cases of wine. The business continued to grow from there until Joel and Rebecca were able to work full-time. “I left Hyatt and we opened a tasting room. Eventually, we were making 50,000 gallons [of wine] a year.”
When the pair initially purchased the vineyard, it was used to grow Concord grapes, which are excellent for juice, but not for wine. The first thing Joel did was make the transition to wine grapes. “I always like the Italian varietals,” he says. “Sangiovese, Nebbiolo, I also like the Rhone varietals, but it was hard to get plants for those. We planted Syrah and had a bunch of Cab (Cabernet Sauvignon) because that’s kind of my mainstay.”
While much of Joel’s knowledge of grape production was on-the-job training, he also attended short courses at UC Davis to advance his knowledge. “I learned how to trellis the grapes; how much water grapes needed. It was becoming a science which was nice because you could take it back and apply it. The grape quality also improved because we were over-watering initially,” Joel says of the experience.
When most people think of grape growing, the image of lush Tuscan hills likely comes to mind. However, growing practices in Washington look very different due to the climate. One example is the presence of weeds, “In Italy, they let the weeds grow because they don’t get crazy. But in Washington, we’re always fighting the weeds. We fought the weeds more than we grew grapes,” Joel says.
Part of the process was not only finding ways for the grapes to grow successfully in a different climate but simply finding grapes that would. A Riesling might do well in the Pacific Northwest, but a Cabernet might not. This is made even more complicated by the presence of micro-climates, which can vary widely depending on factors such as altitude, tree density, or even what side of the road you’re on.
While Joel initially grew his own grapes, over time the demand for product outpaced the speed at which he could grow, and he began purchasing grapes from growers to supplement production. “I could only grow 30 tons [of grapes] a year, and we were processing over 300 tons [of wine]. So, most of my production was purchased, but I still enjoyed growing Italians,” Joel says.
When Joel was buying grapes from a grower, he could specify the results he wanted, such as the pH acidity, and sugar level. He could also tell the grower when in the year the grapes should be picked. This process gave him an unprecedented degree of control over his product.
Once the grapes were brought to the winery, they would be processed and crushed. The juice, seeds, and skins are put in a tank along with yeast and left to ferment for 7-12 days. “It depends on the weather,” Joel says of the process of fermentation. “If it’s nice and warm, it goes fast. If the grapes become cool, it takes a little longer.”
Once the wine is done fermenting, it is put in a tank to settle. This process allows dirt, grape skins, seeds, and other debris to sink to the bottom and be removed from the wine itself. Finally, the wine goes to the barrels to age. “Merlots, we aged for a year. Cabernets and Syrahs for two years,” Joel says.
After aging, the wine is put in a tank to homogenize, so that the taste is consistent. Joel would make some minor adjustments to the acidity, add sulfites for preservation, and prepare it for bottling. A long way from exploding bottles of bedroom wine!
While most entrepreneurs know they are unlikely to see a profit in the first few years of business, wineries are unique in that they are one of few businesses that won’t even have a product for the first few years! A Cabernet, for example, is typically aged three years, not to mention the four years it takes for the grapes to fully develop on the vine. “What you do is you make white wine,” Joel says. “Chardonnay is ready the next spring, so that’s your bread and butter until you can get into the cycle of the reds.”
Joel and Rebecca were also able to make the process easier, by working at other wineries until their own was ready to begin selling in full. “Working at other places gave us the ability to come out of the gate with a product and it just went from there,” Joel says. “It just kept getting bigger, it was crazy.”
In addition to his own winery and tasting room, Joel also began selling to private-label wine businesses. Private label allows someone to sell wine they did not make themselves, under their own personal label. Joel went a step further than just making the wine for his customers, he designed their labels too! “It became a large part of our business to design labels and provide the wine. Everyone in Western Washington that had a private label, was selling our wine. I’d go to tastings, and it would be all my wine, but every one of them had a different label on,” Joel says.
This meant that sometimes, Joel’s wines (identical in every way except the bottle) would end up competing against one another. “One time I made some Chardonnay for two people, and both put it in the San Diego Wine Competition. [The judges] couldn’t decide which wine was better, so they gave both the gold medal. It was the Chardonnay we had made, but sold to two different wineries,” Joel says laughing. “It shows the consistency and quality of the judges that they could not decide which one of them had a better attribute.”
Joel was committed to making a high-quality product, but he also wanted that product to be accessible. “I never wanted to make really expensive wine. I wanted my customers to buy my wine and take it home and drink it, not stick it in a wine rack for years. I wanted my wine to be an everyday wine.”
Once, at a trade show, Joel saw someone selling equipment for boxed wine, long before boxed wine was common fare. Joel was intrigued. Boxed wine would not only allow Joel to save money on packaging costs but saved his customer’s money too. Joel’s enthusiasm was met with concern from the rest of the local wine community.
Joel’s winery had long been a leader in the local industry and were a symbol of quality. Many felt that making boxed wine cheapened the product and by extension, the local industry. “Many [winemakers] thought I would destroy Washington’s wine industry if I did so,” Joel says. “I did it anyway.”
Tefft Cellars’ boxed wine was an enormous success, at first selling through their distributor, and eventually being approached by Costco. “Costco approached me to [sell in] six stores in the state,” Joel says. “How can you say no?”
When it comes to the quality of wine, everything is about tannins. A chemical compound found in fruits; a good number of tannins allow for the drinker to get that dry, slightly sour taste. Too tannic, however, and you’re quite literally left with a bitter taste in your mouth.
“Nice wine is luxurious because when you put it in a barrel, you lose a quart [of water] a month. That wine in the barrel is getting thicker because it’s losing that water through the wood. It leaves this richness in your mouth,” Joel says.
“Some people will have a can of beer in their hand all day, wine is more civilized. You sit down, you don’t normally walk around drinking a bottle of wine, and you have it with food. Good wine, a good meal, conversation,” Joel says. “Wine just slows it down. It’s hard to talk about the attributes of a Budweiser, but when you’re sitting with a great Washington Cabernet, everybody’s getting a different berry flavor, you have something to talk about.”
While there is a romantic quality to owning a winery, there is also a lot of bureaucracy, from liquor licenses to bonding fees. “There are reams of paper, you have to tell them where every dollar came from, you have to show them your savings account, and how you’re making money now,” Joel says of the tedious process of acquiring a liquor license.
Despite being out in the country with a limited pool of applicants, Joel didn’t struggle much with hiring. “Lots of people are excited about wine, so we always found good help for the tasting room,” he says. “I did most of the wine work myself for quite a while, then I started hiring people to help me. I finally ended up with a cellar master who spent time with me and learned how to make wine.”
Like Hyatt had done for Joel earlier in his career, Joel taught his cellar master the trade until he eventually went on to open his own winery.
Between Joel and Rebecca, there was an even distribution of responsibility. “We made a pact that she would do the paperwork and I would do the rest. She also ran the tasting room, so that was her bailiwick, and I would just pop in and sign a bottle or something once in a while. People would get a kick out of that. It was fun,” Joel says.
In addition to the tasting room, the pair would host events they called Winemaker Dinners. They would admit only 16-20 people and come up with an elaborate meal. Guests would eat in the tasting room, while Joel and Rebecca cooked in their home kitchen on the property and would run the food over. “We’d take it over and give them lots of food, lots of wine, and they’d buy lots of wine after dinner. Once a year we’d bring in a band in summer for a kind of picnic. We would set up a ring toss for the kids, put a bunch of bottles out and you can toss a ring and win a bottle. Lots of good times,” Joel recalls.
For Joel, wine was not simply something to be sold, but the facilitator of experience. The vineyard, surrounded by farmland, on a warm night filled with food and wine and good conversation, was a truly meaningful experience.
In continuing with selling not only wine but experiences, Joel and Rebecca opened a rental property on the vineyard, which people could book for vacations or events. “We built a new house, so we remodeled the old winery house so every room had a bathroom, and you could house like ten people. The whole house was [the guests’] until they left. That worked out really well, and it kept people coming over,” Joel says.
In retrospect, Joel says that timing was just as important to the success of the business as the business itself. “In Washington, wine was king. People would come all the way from Seattle just to see [the vineyard], it was an adventure for them.” A normal week for Joel and his team was roughly 200 visitors. For special events such as the barrel tasting weekend they had with an association of local wineries, the turnout could be as high as 2,000.
To accommodate the masses, Joel and Rebecca roped in all of their friends to volunteer along with the staff and hosted a pre-barrel tasting the weekend before for serious wine enthusiasts who wanted to beat the crowds.
Joel and Rebecca ran Tefft Cellars from 1991 to 2009. Joel had long since wanted to try his hand at spirits, and decided it was a good opportunity to exit the wine industry. In 2008, after nearly 20 years of his business, Joel and Rebecca sold Tefft Cellars. Joel came across IBA’s Winery Industry Transaction Team, Gregory Kovsky and Jeffrey Bryan after searching for a broker online and after multiple interviews selected them to sell his company and real estate.
The sale of a vineyard can be quite complicated when accounting for not only the real estate of the property, but also the value of the wine at various stages of production. Thankfully for IBA, Joel was meticulous in his bookkeeping. “I had a very complicated spreadsheet where I kept track of all my values and expenses, so I knew my costs on any particular batch of wine at any time as well as barrels, tanks, bottles, etc,” Joel says of the process.
For Joel, making wine was not only a profession, but a way of life. So much so that when he negotiated his non-compete agreement with the buyers, he included a clause allowing him to continue to make champagne and brandy.
Joel and Rebecca moved out of Yakima Valley to the Tri-Cities area, where they turned to the harder stuff and opened a distillery, Black Heron Spirits. They ran their distillery for several years but found it more difficult to make a lasting impression on consumers. While people tend to be more adventurous when it comes to wine, there are high rates of big brand loyalty among spirits drinkers. Unless you run Jim Beam or Smirnoff, it is difficult to make an impression.
At that time Washington had state-owned liquor stores, meaning Joel and Rebecca’s largest customer was the state itself. Washington then changed its laws, removing state-owned liquor stores and allowing grocery stores to sell. This required distilleries to negotiate with distributors on an individual basis. Joel and Rebecca decided it was time to sell that business as well.
Now partially retired, Joel and Rebecca moved back to his home state of Idaho. He continues to make wine from his home. While he occasionally misses the days of running Tefft Cellars, he recognizes selling the business was the right choice. “It was the right time [to sell],” he says. “And that’s why I still make wine in my garage, it’s a hard habit to get rid of.”
Joel also has a small vineyard on his property that produces a couple of barrels of wine a year. He and his wife now work part-time merchandising plants at a nursery from March to September. They spend the remainder of the year traveling. “We’ve been to Montana and Arizona. My brother is in Colorado, so we go there. We went to the Galapagos,” he says. The pair enjoy traveling and are looking forward to going to Europe now that COVID-19 travel restrictions have been eased.
For Joel, Tefft Cellars allowed him to achieve a life nobody in his life thought was possible. His family did not have the funds to send him to college, which led to him joining the Navy.
“When I was in school, there was this one teacher, we were talking about Pompeii and she goes, ‘Most of you will never see it.’ I thought, ‘Why would you say something like that?’ I decided that I was going to prove her wrong. Here’s this kid from Coeur d’Alene, Idaho. I made [my life] so that I could go.”
Joel did see Pompeii, not once but many times. “I realized that if I was going to get anywhere, I had to do it myself. It’s hard, but harder to get anywhere working for other people.”
For Joel, achieving the American Dream has meant building a career he loves, that can provide for a life he loves. And going on a business trip to visit Italian vineyards is not too shabby either. “[The American Dream] is the freedom of owning your own business,” he says. “There were tough years where I didn’t go anywhere, but once you get the employees and it gets rolling, it’s almost unstoppable. But you have to be the kind of person that wants to own a business.”
Nesha Ruther is a writer and editor from Takoma Park, Maryland. She received her BA in English Creative Writing from the University of Wisconsin Madison, where she received a full tuition scholarship through the First Wave program based on academic and creative merits. She was a 2016 Young Arts winner in spoken word, a 2016 winner of the DC Commission of the Arts Larry Neal Writing Award, a 2017 winner of the Mochila Review Writing Award, which was judged by Nikki Giovanni, a 2020 winner of the University of Wisconsin’s Eudora Welty Fiction Thesis Award, and a 2022 Tin House Winter Workshop Participant. She has been commissioned to write and perform for the National Education Association, and has had work published in NarrativeNortheast, Angles Literary Magazine, Beltway Quarterly and more. She currently lives in Cincinnati Ohio and is the Lead Manuscript Developer at Holon Publishing and Collective Press.