You meet some unusual people in the wine business.

Marcia Mondavi made that point by describing a meeting 20 years ago at which her father, Robert Mondavi, founder of California’s Robert Mondavi wineries, agreed to a joint wine-making venture with Baron Philippe de Rothschild of Chateau Mouton-Rothschild in Bordeaux.

Mondavi had accompanied her father to France and to dinner with de Rothschild. They found, she said, that Baron Philippe "doesn’t talk wine at dinner. That was impossible for Dad because the only thing he talks about is wine." Then the baron scheduled a business meeting for the next morning at 10:30 – in his bedroom.

"All my dad could say was: ‘interesting.’ Baron Philippe conducted all business from his bed, with a servant standing next to him. And before getting to the nuts and bolts of the agreement, he and my father sounded each other out on their philosophy of wine making," she recalled.

Marcia Mondavi came to Wharton April 13 as part of the Zweig Executive Lecture Series to pinch-hit for her 86-year-old father who had canceled his scheduled lecture due to emergency back surgery. Michael Mondavi, Marcia’s older brother and CEO of the company, attempted to join her via a video-phone connection from Florida. But no sooner would he start talking than the connection would break, causing the audience to become whine-makers of a different sort.

Marcia Mondavi prefaced her own remarks by reading her father’s intended speech just as he’d written it. The elder Mondavi told of joining his father’s small winery in the Napa Valley of California after graduating from Stanford in 1935. That winery produced only bulk wine, but Robert Mondavi was convinced that the Napa Valley could also produce fine wine. "We had the climate and the soil but not the know-how."

Mondavi told of developing this know-how by going to Europe and meeting the great wine-makers. He discovered they made each individual variety – cabernet sauvignon, chardonnay, reisling – differently, while Californians made "red one way and white another." The Europeans aged wine in small oak barrels while Californians used large redwood tanks. "And no one did research that might lead to better ways to make wine."

"So I began that in Napa. I was determined to grow great wines, wines with complexity and greatness. My winery was called the ‘test tube winery’ because we did so much research. But I knew we could produce equal to the best in the world."

In his planned speech, Mondavi skipped a well-known chapter in Mondavi wine history: How he and his brother Peter fought over how wines should be made and marketed. The two had inherited their late father’s business, which included the well-known Charles Krug winery. In 1965, Peter forced Robert out in dramatic fashion. The next year, at age 52, Robert Mondavi borrowed $100,000 from friends to start his own winery – and subsequently built it into the world-wide empire (8 million cases a year) that exists today. Peter Mondavi continues to head Charles Krug and the brothers are back on speaking, if not intimate, terms.

In his remarks, Robert Mondavi addressed the challenge of building a reputation for his fine California wines in a world that back then thought the only decent wines came from Europe. "I met in London with English wine writers, who were considered to be the ultimate in defining taste. I met in France with three-star chefs, inviting them to taste what we were doing. Our first exports were me and my family with a few cases of wine. But word got around that we were doing something exciting. Whenever the opportunity arose, I educated people about the Napa Valley and California."

Marcia Mondavi told the audience that her entire family has always kept "their eyes on the prize of making great wine." But she noted that their company also produces merely good wine of the $7 to $10 a bottle variety. That larger production, she acknowledged, is "the engine that makes the other possible."

The company’s premier product – selling for $90 to $100 a bottle – is Opus One, a Bordeaux-style wine. Opus One is the result of that bedroom meeting with the baron in 1979. "Baron Philippe had approached my father about a joint venture in the early ’70s," said Marcia Mondavi, "but he wasn’t willing then. We were just starting out and my father felt it wouldn’t be a partnership of equals. However, they stayed in touch."

She added that since the joint venture with the Baron, Mondavi has established partnerships with the Frescobaldi family in Tuscany to produce Luce, Lucente and Danzane wines and with the Chadwick family in Chile to make Caliterra and Sena wines. ("Eduardo Chadwick is known as the Robert Mondavi of Chile," she said.)

In answer to a question from the audience, Marcia Mondavi said she was never pressured to go into the family business – beyond being a member of the board of directors – "because I’m a girl. It was different for my brothers. My mother insisted that all three of us should be allowed to make our own career decisions. And my father agreed with her, but he also would say to my brothers: ‘Do you realize what we have here? Do you realize the potential of this business?’

Both brothers did join the company, but initially it was an uneasy relationship that reminded the business press of the long-ago feuding between Robert and his brother Philip.

As Marcia Mondavi told it, Michael and Tim Mondavi became co-CEOs of a company overseen by a " benevolent dictator." The result, she said, was that both of her brothers "’abdicated.’ They wouldn’t agree on a decision and would wait until our father made it. That was a painful period. It was difficult for employees, because they couldn’t help taking sides."

It didn’t help that although Robert Mondavi claimed his sons were in charge, in fact, "he did not want to let go," said his daughter. "We worked with family counselors and with heads of business schools to help Dad step aside."

It was finally decided that Michael, who is most interested in business and marketing, would be CEO of the company, that younger brother Tim, who is most interested in farming, would be managing director in charge of the vineyards, and that father Robert would concentrate his energies on developing a new non-profit "American Center for Wine, Food and the Arts" which is scheduled to open in the Napa Valley on Thanksgiving Day, 2001. "Dad hasn’t made a business decision in six years," Marcia reported.

In one of his brief appearances as a huge photo on the wall behind the Wharton lectern, Michael Mondavi explained that the reason the company went public in 1993 (with the Mondavi family retaining 50% of the shares and 90% of the vote) was both to raise capital for expansion and to avoid having to sell off parts of the business to pay inheritance taxes should the family patriarch depart. In fiscal 1999 the company earned $30.8 million on revenues of $370.6 million. Mondavi’s stock closed at $34.44 on April 24, and the company’s market capitalization was $535 million.

Michael Mondavi also answered a question about recent wine trends by stating a concern about what he called "synthetic wines." Current law, he said, "permits producers to sell a product that is 50% water and sugar and call it ‘chardonnay with natural favor.’ I believe the law will be changed and this bastardizing of varietal wines will go away," he commented as the video-phone connection broke once again.

Each time Michael Mondavi’s image and voice disappeared, Marcia Mondavi gamely took on the questions. On the issue of wine trends, she said the trend was clearly in the direction of fresher, lighter wines, just as it has been in the direction of fresher, lighter food. She noted that brother Tim had discovered that "closely-planted vineyards – 1250 vines per acre rather than the usual 500 – produces gentler, more subtle wines."

Asked if it is hard to get outsiders to work for a firm that remains family-controlled, she replied: "It was more tenuous years ago. Now we have long-term employees and low turnover. Our children can go into the business, but they are expected to work somewhere else first for at least five years. And we are so large now, there is no question of ousting a vice president to make way for a family member. We depend on professional managers."

Decisions that must be made by the majority stockholders are decided in a "family council," she said. "And if there is disagreement within the council, the least bloodied wins."