Kingston family vineyards

3. Answer the following questions:

How are Courtney and her team, guided by their mission, purpose and core beliefs, supporting the goal of raising Chile's position as a country of origin for premium wines?
In your opinion, did the family make the right decision in not accepting the hotel chain's offer and why?
Answers should be written and submitted individually, about a paragraph each (250 words total).

4. Along with the answers to the questions above, please formulate two questions to ask the Kingston include them with your submission.CASE: SM-266 DATE: 10/12/16 KINGSTON FAMILY VINEYARDS Nearly 20 years ago our family planted grapevines in the far hills of Chile’s Casablanca Valley. Our goal was to try to ensure that “the Farm” remain a valuable agricultural asset for generations to come. Today Kingston Family Vineyards is a successful international operation that produces and markets high-quality wines and grapes. We consider our Chilean-American family and our land to be our biggest assets. Today we find ourselves at a crossroads, one that feels as significant as that of my great-grandfather when he arrived in Chile almost a century ago. 1 —Courtney Kingston, Founder, Kingston Family Vineyards In 1998, Courtney Kingston persuaded her family to expand their ranch in Chile from dairy and cattle into wine. By March 2016, Kingston Family Vineyards had a strong international brand for its small-production wines and successfully sold the remaining top-tier grapes to other Chilean winemakers. But they faced key choices regarding focus and growth. As Courtney packed her bags for Chile to attend the annual meeting of the family business, she considered three diverging paths. One option was to increase production of their highly rated, handcrafted wines, which had established the vineyard’s reputation for quality, pursuing sufficient scale to turn a profit on the winery. Alternatively, the Kingstons could refocus on the vineyard, as they had originally planned, playing to their strengths in farming expertise and leveraging their primary asset – the land. A third possibility was to Invest in Chile’s burgeoning tourism market, and open a 1 Interview with Courtney Kingston, Kingston Family Vineyards, May 17, 2016. Subsequent quotations are from the author’s interviews unless otherwise indicated. Kaitlin Malloy and Professor Alyssa Rapp prepared this case as the basis for class discussion rather than to illustrate either effective or ineffective management. Copyright © 2016 by the Board of Trustees of the Leland Stanford Junior University. Publicly available cases are distributed through Harvard Business Publishing at hbsp.harvard.edu and The Case Centre at thecasecentre.org; please contact them to order copies and request permission to reproduce materials. No part of this publication may be reproduced, stored in a retrieval system, used in a spreadsheet, or transmitted in any form or by any means –– electronic, mechanical, photocopying, recording, or otherwise –– without the permission of the Stanford Graduate School of Business. Every effort has been made to respect copyright and to contact copyright holders as appropriate. If you are a copyright holder and have concerns, please contact the Case Writing Office at businesscases@stanford.edu or write to Case Writing Office, Stanford Graduate School of Business, Knight Management Center, 655 Knight Way, Stanford University, Stanford, CA 94305-5015. Kingston Family Vineyards SM-266 p. 2 boutique hotel in Casablanca’s wine country. Courtney wondered how best to preserve the family’s land for the next generation while contributing to the greater Casablanca Valley community. HISTORY OF THE KINGSTON FAMILY BUSINESS Carl John Kingston moved to Chile in 1906 from the Upper Peninsula of Michigan in pursuit of copper and gold. In 1918 he arrived in the Casablanca Valley, 50 miles northwest of Santiago, with his wife Caroline and settled on a remote ranch that would become known to the family as “the Farm” (see Exhibit 1). C.J. and Caroline’s eldest son, John C. Kingston, returned to the United States as a young man to attend Harvard University, and upon graduation in 1935 returned to the Farm with his new wife, Janet. John and Janet raised five children in Casablanca. For three generations, the Kingston family focused primarily on the cattle and dairy businesses, becoming a major Chilean producer of high-quality milk and beef. Michael Kingston, John and Janet’s third child, left Chile to attend Princeton University, where he met and married his wife, Louise. They settled near Princeton, New Jersey, and raised their three children: Tim, David, and Courtney (see Exhibit 2). The third generation of Kingstons traveled during school vacations back to the Farm to be with family and maintained a strong connection to Chile and the Casablanca Valley. Courtney Kingston attended Princeton University and worked as a consultant at Deloitte in San Francisco before getting her MBA at the Stanford Graduate School of Business in 1997. While at Stanford, Courtney evaluated alternatives to diversify and secure a more solid footing for the Farm beyond the increasingly unattractive economics of the commodity dairy business. A Plan to Diversify: Wine Throughout the 1990s the price of raw milk in Chile declined steadily, putting pressure on the Farm’s operating margins (see Exhibit 3). They sold cattle for beef to cover short-term cash flow needs and developed additional revenue streams, including equipment rentals and forestry services for nearby farms. By the mid-1990s, the family was beginning to consider options for greater diversification that would leverage their land and farming expertise. At Deloitte, Courtney worked in the firm’s wine industry practice, and began to learn the ins and outs of the California wine business. The Chilean wine industry was then experiencing strong growth, and Kingston neighbors in the Casablanca Valley had recently planted Sauvignon Blanc and Chardonnay vines on the valley floor. Larger U.S.-based wineries like Seagram, Beringer, Robert Mondavi, and Kendall Jackson were expanding into Chile to meet growing global demand for their wine and to take advantage of the lower costs of land and labor abroad. Smaller, entrepreneurial “flying winemakers” explored smaller production ventures working two harvests a year in the northern and southern hemispheres, but the challenging nature of starting a business in a developing economy sent many American and European entrepreneurs back home. The Kingston Farm’s roots and connections in Chile and California put them in a strong position to grow grapes in Chile and market premium wines in the United States.