Cornell graduate students Andrew Harwood and Michael Lukianoff have a plan for a business that was exciting enough to get cited in the pages of The Wall Street Journal this April 11, not to mention take top honors in a national collegiate competition at the University of California, Berkeley's Haas School of Business.
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| Graduate students Andrew Harwood, left, and Michael Lukianoff won an award for their plan to create a winegrowers' cooperative and winery in Virginia to help farmers there replace their tobacco crops. Nicola Kountoupes/University Photography |
With that kind of attention, you're probably guessing dot-com startup, right? Wrong. The relatively low-tech proposal is to create a winegrowers' cooperative and winery in Virginia that will help farmers there replace their tobacco crops with biodynamically grown grapes. It was savvy enough to propel Harwood and Lukianoff to among the top eight of the 66 teams that competed for best proposal for a socially conscious business, and it earned them a free flight to San Francisco this April to present their idea to experts.
"With its echoes of 1960s activism, it is so old-fashioned it seems new," wrote The Wall Street Journal, citing the plan as an example of a growing trend toward a new type of socially conscious entrepreneur and investor.
The thoroughly researched plan for the Virginia Wine Growers Association in Pittsylvania County, Va., is also one that its authors are putting into action after receiving their master of management in hospitality (MMH) degrees this May from Cornell's School of Hotel Administration. Their vision, as stated in the proposal, is to create a real future for Virginia's economically depressed rural communities by "aligning their wealth of natural resources with the needs of today's global marketplace."
Yes, Virginia, there is a market for wine from that region and it's expanding. "Rhône varietals, the grapes used to make wines like Châteauneuf du Pape, do very well in Virginia," said Harwood.
Grapes actually have been grown in the state ever since an edict from the King of England required 17th century Jamestown settlers to plan vines. Virginia currently is the sixth largest wine producer in the nation (with California number one and New York number five). It's also a quality product, according to Harwood and Lukianoff. Wine Spectator gave a Piedmont Vineyards reserve Chardonnay a 90-plus rating in 1993 and now classifies 13 Virginia wines as "very good." Their fame, like most of their customers, is regional, however, at least for now, but demand for the wine is already outpacing supply by 15 percent, and the entrepreneurs expect it to grow much more.
"Virginia wine in terms of acreage planted has increased threefold in the last 20 years," says Harwood. However, "few people have recognized the potential yet, and land in much of the state is only $2,000 to $4,000 an acre," a lot less expensive than in, say, California or New York state. That fact "changes the whole equation," he noted.
While the truism is that "people don't make money in wineries, Andy called me and I was surprised to see the figures" made cents as well as sense, said Lukianoff, whose background in finance should help sell the plan to investors.
Another advantage to Virginia: Some tobacco farmers there will receive money as part of Phase II of the legal settlement with the large tobacco companies. While the settlement dollars aren't directed at helping them switch over their crops, they could certainly be used for that purpose. Currently "tobacco growers are in a real plight," said Harwood. "Even if they used 100 percent of their land to grow tobacco, they can only sell 70 percent at most" because of quotas, increasing supply from overseas competitors and decreasing demand." They need to find another crop to grow.
The winery cooperative "would not only provide a means to begin to reshape the agricultural landscape of rural Virginia, but also would keep jobs and productivity in the country where families live and have for many generations," said Harwood and Lukianoff in their plan.
Their model, which requires community involvement, calls for the use of natural fertilizers and biodynamic growing methods. Pioneered by Rudolf Steiner in Austria in the 20th century, the process involves recycling, composting and creating a self-sustaining ecosystem and has proven successes in California and France.
"Tobacco, and the chemicals used to grow it, drain the soil of nutrients," said Harwood. "Grapes have the potential to produce a product that will be more profitable and less damaging. That's the beauty of it -- you can make a profit and be socially responsible." They plan to tell the story of the biodynamically grown product and socially conscious business on the back of the label of the wines they eventually produce.
The plan also calls for training farmers in the latest viticultural methods, maintaining a nursery with vine cuttings and local root stock for planting, offering technical support and access to modern equipment and machinery, serving as a liaison between farmers and local and federal agencies and developing strategic partnerships with distributors outside the Mid-Atlantic region.
In addition to advice and support from such Cornell Hotel School faculty as Associate Professor J. Bruce Tracey, Harwood and Lukianoff got help from Virginia Polytechnic Institute and State University's viticultural department, which was able to give them detailed maps on the microclimate and soil in the various regions. Conditions can change from acre to acre, depending on the slope of hill, elevation, humidity and amount of rainfall and frost, say Harwood and Lukianoff. Such information will be key if farmers are to determine which grapes to grow where.
The pair hope to add tasting facilities, a café and bed and breakfast to the wine cooperative and winery, once they attract venture capital and other funding and community support to build them. They also will develop a web site to tell their story, sell their products and attract tourism to the area.
Before coming to Cornell for his MMH degree, Harwood majored in marketing as an undergraduate at the College of William and Mary in Virginia. He learned about winemaking methods while working in Tokaj, Hungary, and Pauillac, France, both grape-growing, wine-making areas, and he also spent time as a sommelier at New York City's exclusive Picholine restaurant. Lukianoff, who majored in finance as an undergraduate at Ithaca College, also worked in the industry as food and beverage director at the Inn at Silver Creek in Colorado and manager of a chain of restaurants in southern California.
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