Copia in a big financial mess

This story's heavy on the financial side, but it describes the huge financial problems suffered by Copia, the museum of food and wine in Napa. I knew things were not working out well for the place but I had no idea that they had lost millions pretty much every year since opening. They also managed to get themselves in some trouble with the IRS.

The whole concept always seemed like a stretch to me, but it would be nice if they could figure out a way to make it survive.

Thanks for the link to that great article. I never visited COPIA because several friends who went were not impressed.

Wow. I just read their 2006 990 on Guidestar. It's not just that it's a $12M deficit for that year- it's a $12M deficit on about $4M income. Now, I work for a non-profit. I don't think that working for a non-profit means you should live in poverty. But with the ED and COO each making over $200K, and a half-dozen others making over $100K, there's 25% of the revenue gone before you start. You should be VERY sure of your income before implementing that level of payscale.
I like the concept, but the execution seems very flawed.

I know several people who went to events or dined there when it first opened and they never went back. They just didn't find it worth the cost. Admittedly, this was back in the $12.50-just-to-get-in-the-door days.

I also run a non-profit, and I agree with your assessment on the salary issue, Dale. These people obviously got bad advice from the beginning, whether from external consultants or their own internal people, it's hard to tell. Maybe both.

(Digression: Something I generally do that helps people understand that my employees and I shouldn't starve for our work is to call it a not-for-profit institution, instead of a non-profit. It's purpose for existing is not to make a profit, but at the very least costs must be met to enable any organization to continue. Unless they can get tax-exempt money, as Copia apparently did.)

I think the execution of Copia was flawed by being way too ambitious. They seemingly jumped into a full-scale launch of everything they ever wanted to do at once instead of determining if the market was there to support it.

Oh.... and do not get the IRS annoyed at your mis-use of your tax-exempt status. That's just stupid.

[Jenise]

I also run a non-profit, and I agree with your assessment on the salary issue, Dale. These people obviously got bad advice from the beginning, whether from external consultants or their own internal people, it's hard to tell. Maybe both.

My comment's probably WAY off base and I may have no idea what I'm talking about, but IIRC there was a lot of Mondavi money and inspiration behind Copia. IOW, a lot of this was hatched at about the same time that the Mondavi winery was being run into the ground. Coincidence?

I also run a non-profit, and I agree with your assessment on the salary issue, Dale. These people obviously got bad advice from the beginning, whether from external consultants or their own internal people, it's hard to tell. Maybe both.

My comment's probably WAY off base and I may have no idea what I'm talking about, but IIRC there was a lot of Mondavi money and inspiration behind Copia. IOW, a lot of this was hatched at about the same time that the Mondavi winery was being run into the ground. Coincidence?

Just talking with some folks at a wine tasting tonight, I heard that $40 million of Robert's went into it. No verification of that number, though.

... they had lost millions pretty much every year since opening. / The whole concept always seemed like a stretch to me, but it would be nice if they could figure out a way to make it survive.

I think you caught the situation succinctly, Mike. The losses are longstanding, and the topic has some depth behind it. I see Copia as a worthy effort -- certainly its permanent food-wine history museum is unique on these shores, informative, authoritative.* But the facility is much bigger than that; space was built for topical exhibits, cooking demonstration, lectures, etc. -- in short, it's ambitious for a center with a completely new concept. And there's the big question (inevitably viewed as a nuisance by some visionaries) of how to pay for it all.

Copia may be the most visible expression of a current of thought, gathering momentum around 15 or 20 years ago among US food personalities including Alice Waters and Julia Child and others. Waters wrote on it explicitly; Fitch's biography of Child, An Appetite for Life, mentions the subject in late chapters, citing the ideas and the people who discussed them in organized groups such as the AIWF if I recall. To summarize offhand (probably not doing the movement justice), there was a hope or dream that gastronomy in the US could someday move beyond restaurants and home cooking, and become recognized more formally as an art that justifies contemplation, seminars, academic training programs, scholarship. Precedents in other, older cultures were cited.

Copia fits that vision as a museum and teaching center. However, writing I saw on the larger topic rarely spoke to the economics -- how to make it real, i.e. self-sustaining. Another, earlier venture (involving some of the same group of people) was the International Journal of Gastronomy, the scholarly-looking trade-sized periodical begun in the 1980s under AIWF -- and discontinued a few short years later, because (I was told) it depended on patronage, and the one major source dried up. It never paid its own way. Copia likewise seems to've been a great vision but an incomplete reality, without (again) some kind of angels to pay the costs. (Avid reader of another food forum groused some years ago that Copia was hosting conferences with big-name talent but big ticket prices -- hundreds or thousands of dollars -- which she couldn't afford. I said that in my experience, big events are expensive to put on, and are usually asked to pay for themselves. The last thing Copia needed was to lose money on them.)

* Trivia point: People who don't understand public quips about hagiography and beatification of the late Julia Child probably haven't seen (1) the popularity of her photo, like a holy icon, e.g. in people's online avatars; (2) reverent relics display in a corner of the permanent history exhibits at Copia. Artifacts from the True Kitchen, as it were.

In my experience as an accountant, it seems that way too many not-for-profits exist primarily to give someone a big salary. Look at the financials, and see what percentage of expenditures goes to administrative overhead vs the charitable purpose.

Interesting story and thanks for posting it, Mike. I have driven by Copia countless times but never stopped in because I thought it was conceptually a fine idea but something that evolved, unfortunately, into a tourist trap attempting to make money off the Napa tour bus crowds. Of course, that may simply be my misperception.

Who or what actually owns Copia? Obviously they are leveraged and there are bond holders, but who is Copia actually accountable to from an ownership perspective? Are there equity holders that can vote for or fire board members? If Copia decided to cut their losses and liquidate the business who would actually receive the proceeds after the debt holders received their share?