Business

A Marriage, Real Estate, and Wine

How Craig and Kathryn Hall ventured into the winemaking business and came out on top.

Running a business together as a married couple is tough. Writing a book about the experience can be even more difficult, say Craig and Kathryn Hall. The Halls have survived both, the evidence being their booming Napa Valley wine operation and the newly released A Perfect Score: The Art, Soul, and Business of a 21st-Century Winery.

hall_St_Helena
A new St. Helena winery incorporates a structure that was built in 1885.

Craig Hall is known locally for his commercial real estate developments, particularly the sprawling Hall Office Park in Frisco and the Hall Arts complex in the Arts District. Kathryn Walt Hall is a former attorney who once ran for mayor of Dallas and served as the U.S. Ambassador to Austria during the Clinton administration.

In the early 1990s, Texas Gov. Ann Richards took Craig aside and told him he needed to meet Kathryn, who, like him, was newly divorced. “I had high expectations, and [Kathryn] exceeded them,” he says. The couple knew they’d get married by their second date, making it official in 1993.

Hall Wines has grown to include 500 acres of vineyards and two wineries.

Kathryn grew up in California, where her family had a vineyard near the northern coastline. She loved the operation. “For me, there’s a realness about being close to the dirt that just puts everything in perspective,” she says. But after her parents died, her brother wanted to take things over. Kathryn was heartbroken, but Craig encouraged her to let it go. “I always feel something is amiss when families fight over money, and I worry, frankly, and hope that it doesn’t happen with my own kids someday,” he says.

Craig set about finding a vineyard for Kathryn to run on her own. The plan was to grow some grapes and eventually have a humble winery that produced about 5,000 cases of wine a year— and not just any wine, but Kathryn’s favorite, Cabernet. And that meant hunting for something in the Napa Valley. The quest took them to a hilltop vineyard called Sacrashe in Rutherford, which the couple acquired in 1995.

After a four-year detour to Vienna, they jumped back into their wine venture in 2001, dividing their time between California and Dallas. Kathryn was still thinking small, but Craig, a serial entrepreneur, wanted to scale up. He didn’t know much about wine but immersed himself in the industry, studying everything from farming methods to high-tech tanks.

In the two decades since their initial investment, Hall Wines has grown to include more than 500 acres of vineyards (and 3,000 unplanted acres), plus two wineries. One in Rutherford features a long, underground tunnel lined with Austrian bricks. It leads to a tasting room that’s lit by a grapevine-root chandelier with more than 1,500 Swarovski crystals. A much larger, newer winery along Route 29 in St. Helena incorporates a restored historic structure that was built in 1885.

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Austrian brick-lined walls lead to a tasting room in Rutherford.

The wineries should produce 120,000 cases of Hall and Walt wines and generate more than $30 million in revenue and $7.5 million in operating profits (EBITDA) this year. (Walt, launched in 2012 as a nod to Kathryn’s parents, is a line of Pinot Noirs and Chardonnays.) Next year, the Halls expect to do $48 million to $50 million in revenue and net about $12 million in EBITDA.

Combined, there will be about 15 different Cabernets and a dozen or so Pinots, Kathryn says. “It’s a lot of cases, but we’re not like a Gallo or some other big producer, because it’s broken down into so many different wines,” she says.

The Halls’ new book recounts their wine-making adventure, including mistakes they’ve made and challenges they’ve faced, as well as Napa Valley’s battle between localism and tourism and the evolving nature of the wine industry itself. The book takes its title from the elusive 100-point rating awarded to the 2010 Hall “Exzellenz” Cabernet Sauvignon by the Wine Advocate’s Robert Parker, who called it a “tour de force in great wine-making.” (The Halls’ 2013 “Rainin Vineyard” Diamond Mountain district Cabernet Sauvignon also earned a perfect score.)

The award-winning "Exzellenz" Cabernet Sauvignon.
The award-winning “Exzellenz” Cabernet Sauvignon.

It feels like we’re just getting started, but this overnight success has taken 21 years,” Craig says.

He brings discipline and risk-taking to the venture, eyeing new markets and other growth strategies. Kathryn focuses on day-to-day operations and travels to connect with customers. “We’re an executive team that fits together well,” Craig says of his wife and president Mike Reynolds. “We meet every Monday, no matter where we are in the world, for a one-hour or two-hour phone call to keep up with major things.”

After more than two decades, the Halls say they’ve figured a few things out about being partners in both business and life. “Both Craig and I are strong-willed,” Kathryn says. “So the very thing that makes him so fun to spend my life with also is something that makes working together and that dynamic very challenging. What makes us successful, even in conflict, is we have very similar goals and similar work styles. Even still, I don’t think either of us anticipated how much fun and rewarding this would be.”

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