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Gold Medal Wine Club
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Santa Barbara, California 93111
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Schug Winery - Northern California Coast

42 years of making award winning Pinot Noirs, makes Walter Schug an elite Winemaker

There might not be a Schug Winery story to tell had Joseph Phelps continued to make a Pinot Noir wine. What was essentially a marketing decision by Phelps, was one of life’s turning points for Walter Schug.
The year was 1979. Joseph Phelps had recruited Walter Schug away from Gallo six years earlier to spearhead the creation of his now famous Joseph Phelps Winery & Vineyard. Phelps knew of Walter’s reputation at Gallo where he was in charge of quality control and grower relations. In this role he dealt with hundreds of vineyard owners in Napa, Sonoma and Mendocino counties who were under contract to provide grapes for Gallo’s huge wine empire. At the time, Walter Schug oversaw the growing and purchasing of amazingly one-third of all grapes being grown in California! He was the industry’s foremost expert in his knowledge of northern California vineyards. He knew virtually all the growers. He knew which vineyards were best suited to plant any particular varietal, and how to coax the best possible fruit out of each.
For Phelps to recruit Walter Schug was a genuine coup. Phelps was not an industry insider, he was a building contractor from Colorado (among his many projects was Denver’s Stapleton Airport), and knew very little about starting a winery. So he left it up to Walter to handle just about everything. Walter selected the land, designed the winery, laid out and planted the vineyard, and even made the wine! He also bought grapes from other growers—grapes needed to supplement the winemaking while the estate vineyard was maturing.
Walter remembers well the first grapes he bought and crushed at the new facility. “Right from the start we made Pinot Noir from the Heinemann vineyard. I felt that particular vineyard had great promise,” he recalls. Phelps Winery continued to produce Pinot Noir until 1979 when Joseph decided it was too tough to sell Pinot Noir to the American consumer. That decision by Phelps was the catalyst for Walter Schug. Walter knew what he had in the Heinemann vineyard. He saw potential that was simply too good to let go.
So Walter arranged through Phelps to make the Heinemann vineyard Pinot Noir on his own using the winery’s facilities. From the next harvest in 1980, he made 1,200 cases of Pinot Noir and a few hundred cases of Cabernet Franc. The following year he made about the same amount of wine then decided it was appropriate to find another home for his new endeavor. He took his barreled wine over to Storybook Winery where he and owner Jerry Seps had worked out a partnership to jointly build up the facility to handle both operations.
For the next two years while making his own wine, Walter remained with Phelps Winery, orchestrating it’s production to 80,000 cases. Meanwhile he was slowly expanding his own start-up venture. And in 1983 it was finally time to leave Phelps to concentrate on his own wines.
For four years he made his wine using the facilities at Storybook Winery. Then Walter moved to Yountville, into a building owned by one of the Domaine Chandon principals. Through 1990 he continued to build production, reaching the 6,000 case level. Because of his decidedly European style of wines, Walter not only gained prominence on the East Coast where European wines are more popular, but also received an abundance of accolades from the European markets. In fact, Schug Winery today exports one-third of its production to European countries–perhaps more than any other winery his size.
In 1990, Walter made a permanent move to a 50 acre parcel within the Carneros district of Sonoma county. He has since planted his own vineyards on the property and built his own winery facility. His plan is to gradually shift to about fifty-percent estate grown and bottled wines. About 20 acres is planted to Chardonnay and 18 acres of Pinot Noir.. “Our style of wine is quintessential European,” says Walter’s son Axel, who heads up the winery’s marketing efforts. “We have always done well in the overseas market and now we’re starting to see preferences shift here in the U.S.,” he adds. Particularly with Chardonnay, there has been a noticeable change away from the big oaky California-style Chardonnays to a more lean austere style which pairs more aptly with a wide variety of food.
Today, Schug Winery looks to the future with great promise and deserved optimism. Their 12,000 case operation each year produces award-winning Pinot Noir, Chardonnay and Sauvignon Blanc. Very small lots of special Reserve-designated Cabernet Sauvignon, Chardonnay and Pinot Noir are produced each year too.
Walter Schug grew up with viticulture in his blood. He was raised on a Pinot Noir estate in the Rhine River valley area of Assmannshausen, Germany. His father was the director/winemaker at the winery which was run by the state. The area is considered one of the few outside of France capable of producing high quality Pinot Noir. It was there that Walter developed a lifelong fondness for the charm and elegance of Pinot Noir.
While in high school Walter worked on the estate learning the craft literally from the ground up. He admitted to us that his first love was actually architecture. “There was absolutely no pressure from home to study viticulture and enology,” Walter recalled. “But it was hard to combat because wine was already in the blood. It just seemed the most comfortable thing to do.”
By the time he was eighteen years old, he began his training as a winemaker. He was sent to live and work at other wineries in Germany for two years as part of his apprenticeship. Soon after, he gained entrance to Geisenheim, the U.C. Davis equivalent in Germany, and began to study viticulture and enology. When Walter was attending Geisenheim, a group of California winemakers came to Germany to observe the operation at Assmannshausen. Walter’s dad put in a plug for his son to help out the group in California. The suggestion turned into reality and in 1959, after graduation, Walter flew to California for what was to be a special temporary work assignment at Cal Grape (the operation later became part of the 6 million gallon Sierra Winery in Delano). Things went so well that they offered Walter a full time position as Assistant Superintendent. Excited by this new prospect in America, Walter raced home, married his sweetheart Gertrud, then both headed back to California to live.
Walter was at Cal Grape for almost six years. Feeling like he had exhausted his opportunities there, he left to join ranks with the E.J. Gallo Company. Walter was hired to oversee grower relations and quality control for Gallo’s contract grape sources in Napa, Sonoma and Mendocino counties. He traveled the area extensively, visiting with growers, making sure grape quality was being maintained and helping growers get the maximum potential out of their vineyards. It was a huge responsibility which he expertly handled for seven years. As huge as Gallo is, it was an invaluable training ground for how to do things the right way in the wine business.
Walter’s reputation found its way to a Colorado developer named Joseph Phelps. Phelps hired Walter in 1973 to start his winery. Walter proceeded to put the Phelps winery on the map. He started from scratch and built it to an 80,000 case winery before leaving to start his own winery in 1983. As Winemaster at Phelps, Walter spent many years distinguishing himself as one of the premier winemakers in the country. He earned critical acclaim with just about every major wine varietal. Among his accomplishments was being the first in the U.S. to make a Syrah wine and a Botrytised Riesling. He also crafted their famous Insignia Meritage wine, gaining worldwide recognition as a top Cabernet Sauvignon producer.