Creating the Future

NorthBay biz profiles three family-owned manufacturing companies that come from generational transitions…and aim to keep it that way.

Westec was started by Larry Alary and his new wife, Wanda, whom he met while installing a wine tank refrigeration system at Rodney Strong Vineyards in the early 1970s. Larry was working for a Bay Area company at the time, but his craftsmanship was admired by legendary winemaker Richard Arrowood, who suggested he start his own company in Sonoma County to serve the burgeoning wine industry.

According to Wanda’s son, Joe Belli, the current owner of Westec, Arrowood “was in Larry’s ear, telling him we needed someone like him up here, so Larry started IRAPP [Industrial Refrigeration and Process Piping] to build refrigeration units for wineries. It’s the same type of thing you have behind your refrigerator, but on a much bigger scale.”

The winemaking process requires temperature control. Fermentation and other processes create heat, and wine has to be kept at a steady temperature. As wineries grew beyond redwood tanks and oak barrels, more and more plumbing was needed.

The Alarys were successful and soon moved the operation off the family ranch into a shared building on Airport Boulevard, then to its own home on Grove Street in Healdsburg.

According to Belli, around 1980, “the demand for catwalks, sumpcarts, trinkets…was on the rise.” The Alary Corp., as it was known by then, began manufacturing specialty tank fittings (what Belli calls “trinkets”) and other items needed by a modern winery.

By the early 1990s, Wanda’s son Belli was centrally involved in the company’s operation, and satisfied customers were asking for more. “People wanted Larry to start building tanks,” Belli says. “They knew they’d get a solid product for a good price.” The Alarys purchased tank-manufacturing equipment from another firm that was going bankrupt and started building tanks in nearby Windsor, before expanding the Healdsburg facility. By 1996, the firm had 90 employees and $10 million in annual revenues.

By the end of the century, Belli’s role was growing, even as the firm was dealing with a series of setbacks.

In 1998, an accidental chemical spill kicked off a run of bad luck: A hose used to rinse metal parts was left on the edge of a containment tank that held a small amount of phosphoric acid. The nozzle developed a leak, dripped into the tank all night, and the resulting overflow ended up in Foss Creek. The spill generated extensive press coverage and a response from state and local regulators that, the Alarys argued, was overkill. The Alarys eventually spent nearly $1 million to deal with the spill, which included lost productivity, state fines and direct cleanup costs. They ended up selling their home to pay for the spill and laid off almost half their employees. The Alarys and Belli were determined to hang on, though, and began to rebuild the business.

In 1999, as they were simultaneously restructuring their companies and battling the state over the spill, the trio had another setback. Larry was diagnosed with Amyotrophic Lateral Sclerosis, also known as Lou Gehrig’s Disease. Wanda began to spend less time at the office and more time caring for Larry. In 2001, she turned the financial end of the business over to a longtime trusted employee.

Four years later, Wanda and Larry were in court as that employee, Joni L. Rocks, was sentenced to state prison for embezzling more than $500,000 from them. The embezzlement, discovered in 2004, was the final blow for the Alarys, who had trusted Rocks like a family member and had spent their savings keeping the company afloat—even while she was draining their accounts and running up $150,000 in charges on a company credit card.

Fortunately, they’d been working on their succession plan all along, and Belli had been gradually acquiring the company’s equipment and accounts. In 2005, rather than file bankruptcy, the Alarys liquidated and sold. The same year, Belli started The Belli Corporation, dba Westec Tank & Equipment Company.

Belli maintains that the core of his business hasn’t changed. “The root of what we do is what Larry instilled in us. He built great products, offered great service, was always happy to help his employees and customers…money was the last thing on his mind.”

Belli admits to being a bit more hard-nosed about business than Larry. “We work hard to please our customers; we don’t try to squeeze every dime out of the products we sell, but we’re realistic,” says Belli, sitting back in his chair and folding his brawny arms over his chest.

Larry Alary passed away in 2006, and Wanda is now retired. Belli presides over a healthy but smaller firm, with 35 employees and sales projected to be more than $6 million in 2010. Belli’s father’s family has been involved in the wine industry for four generations, and Belli’s company works exclusively now with wineries. “I’m all-in with the wine industry,” he says. “That’s my customer base, and I own and farm 12 acres of Chardonnay in the Russian River Valley.”

According to Belli, loyal customers, hard work and great employees helped the company survive the wrenching transition of five years ago and get into position to begin growing again. “My name is on the pink slip, but it’s the heart and soul of the employees that make Westec run,” he says. “I can’t say enough about them. They are Westec.”

The firm is investing now in new tank-making equipment. And yes, Belli has completely revamped the accounting system.

Once in a while, an idea comes along that’s so good, you can’t top it. In 1940, North Dakota-born Santa Rosan Florian Dauenhauer built a hop-picking machine that revolutionized the industry. Over the years, Dauenhauer Manufacturing has tried its hand at a variety of other things, but none have been as successful as its line of hop harvesters, which is the firm’s primary business today.

According to Tom Frazer, Dauenhauer’s grandson and the current President/CEO of Dauenhauer Manufacturing, the family relocated to San Francisco when young Florian was a teenager. By age 20, he was living in Santa Rosa. Florian and his brother Joe leased a hop ranch in the Sacramento Valley from the Proctor family in 1940, but ran into trouble at their first harvest. Migrant farm workers came to the brothers the night before picking was to begin and told them a neighbor had offered twice as much to pick his crop instead. The brothers were forced the match the price, and the majority of their profits were lost to this unexpected labor cost.

“Over the next winter, my grandfather built a prototype hop harvester in his basement on Wilson Street in Santa Rosa,” Frazer says. “He couldn’t afford a dedicated power system, so he adapted a Buick car chassis to turn the harvester’s multiple drive belts.” Florian was 32 at the time.

At the next harvest, the workers’ spokesman tried the same tactic to raise the wages. Joe asked Florian if they should agree to the raise, and Florian’s response was, “Fire ’em, Joe. The machine will work.” Not only did the prototype pick the crop, but it picked the neighbor’s crop as well.

Word got around that someone had an effective harvester, and Florian started to build machines to fill the demand, while Joe continued farming in the Sacramento area. Dauenhauer soon realized that banks wouldn’t lend money for an unproven machine and decided to finance the machines himself. “This was a very shrewd decision,” Frazer points out. “Because of the cyclical nature of farming, this allowed a consistent cash flow for the company and the opportunity to profit from the financing along with the manufacturing.”

Dauenhauer’s invention became as important to the hop industry as the cotton gin was to cotton—mechanization meant farmers could plant much larger crops. Ironically, the small family farmers that Dauenhauer at first empowered became the victims of their own success. Over the years, hop farms consolidated and moved to areas where cheaper land was available.

While Dauenhauer Manufacturing focused on hop harvesters, Florian continued to invent and patent many devices in fields as varied as mining and aerospace. After extensive development and testing, Dauenhauer released a vineyard tunnel sprayer that recycled oversprayed chemicals and eliminated drift but, Frazer shrugs, “It wasn’t adopted by the market because of the high cost and changes in farming practices.” In response to a decade-long downturn in the hop market, the firm also offered custom metal fabrication and powder-coating in an effort to diversify.

Frazer graduated from Stanford University (AB Economics) in 1987 and, in 1992, the family purchased the company from Grandpa Florian, moving from a sole proprietorship to a corporation. In 2000, Florian passed away, and four years later, Frazer moved the factory to Washington State, the largest hops-growing region in the United States.

“We refocused our core business,” says Frazer, who now manages the company from an office in Santa Rosa’s Railroad Square and commutes back and forth to Yakima, Washington, regularly. “We’ve always been the best in the world at making hop harvesters, and that’s what we’ll continue to do.”

For decades, the Giacomini family has played a role in the West Marin landscape. In 1959, after growing up on his father’s West Marin dairy and graduating from the UC Davis agriculture program, Bob Giacomini started a dairy of his own on Highway 1, three miles up the highway from Point Reyes Station.

For 40 years, Bob and his wife Dean raised Holsteins, selling their “fluid milk” to producers like Clover Stornetta. Along the way, they raised four daughters—Karen, Diana, Lynn and Jill—all of whom grew up to be great cooks with a passion for cheese.

“In the late 1990s, we sat down as a family and started talking about how to transition into a 21st century business and keep it family-owned,” says daughter Lynn Giacomini Stray. And, as much as they all enjoyed cooking, they were intrigued by the idea of making cheese. After a few more discussions and some market research that revealed there was no artisan California-made blue cheese, the family decided to get into the cheese business.

Point Reyes Farmstead Cheese released its first batch of Original Blue in 2000. That creamy, tangy, rich cheese has gone on to win a wall full of awards and launch a new chapter in the family dairy business.

Stray credits Cowgirl Creamery, Redwood Hill and Bellwether Farms with paving the way for artisan cheese makers in the area. “They were the pioneers,” Stray says. “They supported the growth of this market and introduced people to artisan cheese.”

The Giacominis make what’s called farmstead cheese, which means it’s made from the milk from their own dairy—just like an estate wine made from grapes grown in a winery’s own vineyards. “We only use our own milk, from our own cows, who are eating the grass we grow,” says Stray, who adds that the term “terroir,” often used by the wine industry to describe the impact of a vineyard’s climate and geography on wine, can also be used to describe cheese.

“There’s definitely a terroir for milk,” she says. “We get the salt air breeze off Tomales Bay, it keeps our grass green longer than that of an inland valley dairy.” The Giacominis and their 20 employees monitor every aspect of the milk and cheese making process, even using a nutritionist to make sure each cow is producing at her contented best.

The milking barn and cheese making facility are only 50 yards apart, so fresh milk can be pumped directly into large vats with minimal agitation. Within two hours after milking, milk is being made into curds. The next day, it begins a three-week curing process, where it’s salted, punched, and then turned regularly to introduce oxygen allowing mold growth and the beautiful blue veins that characterize Original Blue. After five months of aging, the cheese is ready to be sold.

The Giacomini Dairy hasn’t converted completely to cheese. “In 2006, we certified our land and a portion of our herd as organic, and we sell to Clover Stornetta for their organic milk line,” says Stray.

“Clover has been a wonderful partner,” she adds.

The cheese business is growing. After the success of the blue, the Giacominis wanted to make other types of cheese, but needed a separate facility. “When you’re talking about an aged cheese like our Original Blue, you need to be aware that the mold can be contagious and could contaminate the other varieties of cheese being stored in the same cooler.”

The family has just completed an expansion, where they’re experimenting with mountain- and a farmhouse-style cheeses. “They’re not named yet,” says Stray, “but the mountain-style cheese is being aged a bit more. It’s nutty like a gruyere. The farmhouse cheese will be a great everyday table cheese.”

A commercial kitchen in the new facility allows Point Reyes Farmstead Cheese to offer tastings and farm-to-table tours (by appointment), as well as other culinary experiences that revolve around their artisan cheeses.

How does it work with two parents and four daughters all involved in the business? Stray laughs as she ponders the question. “Like any family business, we have challenges,” she admits. “But at the end of the day, we’re all sisters. We all have young families, we still go on vacations together.”

Bob and Dean are as active as they want to be. Bob answers the phone if he’s in the office. “When they come into the office, they always check the mail first,” says Stray. “That’s how you know what’s going on in any business.”

The next generation is already involved as well, she continues. “Our kids come in and work during school breaks and over the summer. They’re getting to know it from the ground up. This is our history, but it’s also our future. It’s not a career, it’s a lifestyle. We want it to prosper for the next generation.