If industry enthusiasts believe making wine is a roller coaster ride — especially in the age of western wildfires and COVID-19 — then Michael Brughelli should feel right at home, considering he once planned to either go into mechanical engineering like his father or design roller coasters.
In joining two others on a Bank of Marin wine lending team for the Central Coast, Brughelli takes the newly created position of vice president and market officer. Since 2018, the Novato-based financial institution has focused on the region as an area of increased wine lending potential. The industry has shown it deserves its own financial division for some banks.
Brughelli, 38, has a background in agriculture starting with his childhood, working on a farm then majoring in viticulture. His experience in the winemaking business spans 15 years.
The winemaker-turned-banker has already counseled many winery owners and managers about how to navigate their finances through the threats of wildfires and economic challenges from a global pandemic.
“There’s a lot of uncertainty out there,” he said.
Brughelli loves wine in all its complexities with the industry’s “incredible melding of art and science” in the making of it.
“It can transport someone to a different place,” he said.
Brughelli will serve in a highly experienced wine- lending trio, alongside Napa Regional Manager Scott McAdams and Senior Commercial Banker and Wine Industry Specialist Marshall Graves. The bank made the announcement of Brughelli’s hiring on Aug. 31.
While based on the Central Coast, Brughelli has worked as a consultant to Folded Hills Winery in Santa Barbara and Diamond West Farming in Paso Robles, which is home to some of the most stunning pinot noirs in California.
The Bank of Marin wine-lending team will build on a clientele that ranges in scope and size — from those with production figures as low as 1,000 cases a year to up to 700,000.
“This is more about relationships, and it’s exactly why we brought Michael on board,” Graves said, further distinguishing Bank of Marin from other known wine industry financiers such as Silicon Valley Bank. “No other bank has the skillsets in practice as our bank in bringing on Michael.”
The bank’s program catering to wine clients started in March 2018 and covers the Paso Robles, Santa Barbara and Monterey grape-growing regions. Paso Robles alone has come a long way, with its historic transformation of 20 wineries a few decades ago and now boasts more than 200 and growing.
With all there is to capture and service, Graves recognized 2020 has presented its fair share of “challenges” for business, not excluding the wine industry. The main obstacle is the state and local shutdowns as a result of COVID-19 in mid-March in which wine tasting rooms saw no customers.
“These are some extremely unique times. But the wineries we have as clients pivoted and are performing remarkably well,” he said.
Graves has found the wineries that came out of the better end of the government-imposed shutdowns as a result of the pandemic were those that were “taking care of their wine club members,” without “diluting the brand equity” by giving away too much in desperate attempts to keep a grip on their consumer base. After all, giving away too much cuts into profit margins.
With a few real estate acquisitions thrown in this year, Graves said he’s noticed many of their wine clients asking for operating lines of credit. Low interest rates have made refinancing a no brainer for some businesses navigating stormy waters over the long haul.
Many clients, including new ones, opted to apply for the Paycheck Protection Program, the low-interest stimulus plan put into place by U.S. Congress for businesses trying to maintain at least three quarters of their staffs.
“A majority of the clients applied so early on in the process, and we had no qualms (helping them) in doing so. It was comforting that they saw that much value in us,” Graves said.
According to the commercial lending pro, a bright light in turbulent times for wineries on the Central Coast is that the “cost of entry is so much lower than what we’re seeing in Sonoma and Napa.”
As the banking business grows, the possibility of opening a satellite office is on the table since they don’t have one now, according to Graves.
“There are multiple opportunities that have already proven true here. The stars are aligning,” he said.
As a publicly traded company, Bank of Marin declined releasing revenue numbers associated with the wine lending group.
Bank of Marin was founded in 1990 and has grown to 22 branches, five commercial banking offices and two loan production locations across seven San Francisco Bay Area counties.
Susan Wood covers law, cannabis, production, as well as banking and finance. For 25 years, Susan has worked for a variety of publications including the North County Times in San Diego County, Tahoe Daily Tribune and Lake Tahoe News. She graduated from Fullerton College. Reach her at 530-545-8662 or [email protected].