Entwined

It's how a family grew its business and resurrected a Tar Heel industry.
by Frank Maley

Outside Duplin Winery, rain is crawling across the coastal plain toward Rose Hill. Inside, David Fussell retreats from a brightly lit gift shop into a dark room where grapes once passed into their afterlife. These days, it’s a classroom for growers and wine lovers. Tables and chairs face a big-screen TV and stage. Display cases tell the history of winemaking in North Carolina. Next door is a restaurant that offers live entertainment, including dinner theater.

All this is for show, a marketing tool. The wine sold here is made a few blocks away, just outside the town limits in a cluster of no-nonsense metal buildings that a sign identifies only as a “federal bonded winery.” With tank capacity to produce 750,000 gallons a year, Duplin Wine Cellars Inc. is the largest winery in the Southeast. It’s also the biggest muscadine winery in the world.

Fussell, 63, is eager to show a new video about the company’s history. Duplin, which opened in 1975 and is the oldest operating winery in the state, bottled its millionth case last year. It sold 176,000 cases, reaping $8 million revenue. But the tape doesn’t tell the whole story. Not hardly. His mother had warned him not to open a winery. So had his grandmother. His wife wondered if he had lost his mind. “You can’t do that,” she’d told him. “We’ll be run out of town.”

His sons started the winery in a warehouse behind D.J. Fussell Sr.'s general store in Rose Hill.

Back then, even selling wine was illegal in Duplin County. Making it would enrage preachers, prohibitionists and prigs. People sent hate mail. Some told his family they were going to hell. His oldest son, now company president, fought with other kids over where his kin would spend eternity.

But Fussell held firm in his belief it was the right thing to do. Before going public with his plan, he had prayed over it three months and searched Scripture for clues. One day, he knelt in his study, clasped his hands and tried again. This time, he believes, the Lord answered. No burning bush or blinding light, not even a voice, just thoughts running through his head.

 

“David, go on and do it.”

“Why, God?”

“Because it’s going to help people.”

“What do you mean it’s going to help people?”

“Just trust me. It’s going to help people.”

A little wine, the Bible says, is good for the belly. Muscadine wine, medical research says, is even better, rich in compounds that help prevent cancer and heart disease —which nobody knew then. But before the winery could help anyone, David Fussell would have to go through his own hell, one born of bad breaks, bad decisions and brain chemistry. Things reached the point where, for a time, he could not pluck up the courage to crawl out of bed and go to work.

Photo by Steve Exum

Truth be told, it was Dan’s idea to start a winery, just as it had been his to start growing grapes. Fussell and his older brother had long wanted a farm, so in 1972 they bought 132 acres with $4,000 of savings and a $52,000 federal loan. Dan, a carpenter, researched what to grow. State agriculture officials were pitching muscadines. Word was that a New York winery was paying $350 a ton. Over the next three years, the Fussells poured about $30,000 into a 10-acre vineyard.

But muscadines glutted the market, tumbling to $150 a ton. The Fussells didn’t have winery contracts and, as their first harvest approached in 1975, realized they might not have a market. Profits from tobacco, hogs and other products couldn’t cover the loss. Starting a winery seemed the only way to avoid losing the farm.

Before Prohibition, the native grape had made North Carolina the nation’s top wine-producing state and Edgecombe County native Paul Garrett’s Virginia Dare the best-selling brand. But the industry hadn’t bounced back with repeal. There were 25 Tar Heel wineries at the turn of the century, but only 12 remained in 1947. All had closed by 1950. Another, built in the mid-’50s to provide Onslow County growers a market, closed in 1968. To stimulate new wineries, the legislature in 1972 cut the state tax on native table wine from 60 cents to 5 cents a gallon. That same year, one opened near Edenton but would shut in 1980 after its principal owner died.

So it wasn’t exactly a booming business the Fussells were getting into. Tastes had changed. People preferred wine from European vinifera grapes, like those from California. And there was their neighbors’ opposition to what would come to be called “the factory of liquid sin.” A Methodist lay speaker, Fussell would have to quit his job as assistant headmaster of Harrells Christian Academy and resign as president of the local Full Gospel Business Men’s Fellowship chapter.

"I went to bed for three months and pulled the covers over my head. I was severely depressed."

The town board wouldn’t give them a permit, so their daddy — a local home builder, merchant and county commissioner — persuaded a friend, state Sen. Harold Hardison, to push through a bill to get around that. With a state permit, what Fussell had taken as God’s blessing and a promise to their mother that they wouldn’t open on Sundays, he and his brother set out to become the Ernest and Julio Gallo of muscadine wines.

Their dad — D.J. — let them use the warehouse behind his general store as their winery. They still had a problem: They did not know how to make wine. As Methodists, they had taken an annual pledge not to drink alcohol — though Fussell admits he had broken it a few times. They visited the winery that had closed in ’68 and the one still open and did research in grocery stores, seeing what was being sold, getting ideas for labeling and buying some to sample.

In ’75, they made enough, about 250 bottles, to experiment with, stomping grapes in a 5-gallon pail until Dan built a crusher. The next year, they sold more than 400 cases, could have sold more and increased production. They sold the farm in ’78, and Fussell bought his brother’s share of the winery. In ’83, the company borrowed $500,000 to build its current winery. It sold 47,000 cases in ’84 but was heading for trouble. It wouldn’t reach that volume again until 2001.

The state scrapped the preferential tax rate in 1985, which raised the price of Duplin wine in North Carolina, its only market. Distributors also had told Fussell that out-of-state wineries were pressuring them to keep Duplin off store shelves. His response was Southland Estate Winery Inc., which, despite its name, was essentially a big store along Interstate 95 near Selma. It could sell the wine Duplin made to passing motorists. Shares were sold, and Southland went public in 1986, with Fussell as president.

“Running Duplin plus all of this, he was just a tremendously busy guy,” says his wife, Ann, who also was on the Southland board. “He did not have any fun at all. He worked. That’s all he did.” Duplin poured about $360,000 — every dollar it could spare — into Southland and was its largest stockholder, but it owned only a third of the shares. “He didn’t get control,” his father recalls, “which was a mistake.”

Soon after the store opened in 1987, some board members grew suspicious of his motives, Fussell says. They wanted Southland to build its own winery and, later that year, elected someone else president. Sales were low. Worry kept him up at night. Both businesses, he feared, were doomed. He might also lose his house, which he had used as collateral when he bought out his brother. Dan was going through a divorce, and his wife wanted her share of the money Fussell still owed. Their father bought the note, which kept a roof over Fussell’s head.

But that couldn’t keep the black dog from the door. “I could see him getting sicker by the minute,” his wife recalls. “He was just overwhelmed with all this guilt. And the more he got sick, the more I got angry. I’m going, like, ‘Don’t these people see what they’re doing to him? If they only knew how much this guy has worked and struggled with this.’” He skipped Thanksgiving dinner that year — “I wasn’t that thankful” — then stopped going to work. “I went to bed for three months and pulled the covers over my head, basically. I was severely depressed.”

He wanted to close the winery, which his dad thought was a good idea. Ann wouldn’t let them. Though she had been against opening it, they had been through too much together since then, she and this man she had married when he was 20 and she 19. They had been high-school sweethearts, and she had followed him to East Carolina University, earning a bachelor’s in elementary education in 1964, the same year he completed his master’s in school administration.

But her efforts to keep Duplin alive to give him something to come back to only made him more depressed. “You’re ashamed that you’re not man enough to face these problems and shake them off. It got to be a spiritual battle in my mind. I was not worthy: My wife would be better off if I was gone and she could remarry somebody a lot better than me. You get to thinking all kinds of funny, crazy thoughts when you’re depressed that you shouldn’t be thinking.”

Fretting he might kill himself, she feared leaving him alone, taking him to his mother’s house in the morning and, after working all day at the winery, picking him up at night. If he got up during the night, she did, too. Dave Jr. came home from ECU weekends to watch him so she could get some sleep. “Sometimes,” she recalls, “you were really angry because you were the one getting up and going. And look at him: He’s sitting in the bed. But you knew he was too sick to say anything to him. If I wanted to yell, I didn’t. I’d go and pray.”

"The health issue has made all the difference in the world, both in sales and also acceptance."

After a few months, she found a doctor who prescribed Dilantin, used to combat epileptic seizures. Within a few days, Fussell was thinking more positively. She gave him small tasks to keep his mind off his troubles and build confidence. In February 1988, he went back to work but still struggled with depression — and still thought the winery was a goner. “I even went to our banks and told them, ‘We can’t pay you.’ I said, ‘Foreclose on us.’ They said, ‘No, we don’t want it. You stay there and make as many payments as you can.’ That’s when we started selling 30 cents-a-gallon wine. We sold off all of our big tanks, anything that was of value.”

To bring in more money, Fussell — who had earned a doctorate in education in 1974 — got a job with the school system teaching academically gifted children. He handled the winery’s finances while his wife ran it. Within a year, he was off Dilantin. After Dave Jr. got his bachelor’s in economics in 1990, he took over, and she taught fourth grade. Southland filed for bankruptcy in 1991. Duplin struggled on.

Since the age of 7, Dave Jr. had spent a lot of time at the winery, working in the bottling room with a handful of people, including relatives. But working someplace isn’t the same as running it. He struggled to keep the winery going with one employee. It sold about 5,600 cases his first year, grossing $150,000, losing $32,000. “We would bottle some wines. Then we would work up here selling it to people. And I’d visit a distributor maybe once a year, not knowing what to do, where to go. Didn’t have much direction.”

Hiring another employee freed him to pay more visits to distributors. He began building relationships. He’s good at it, better than his father, who is the first to admit it: “I couldn’t talk with those folks. My first delivery was to Raleigh, and we took our hog trailer and washed the manure off of it and put the wine cases on it. And when I went to the distributor, they laughed at me. We were on different wavelengths. I was not a golfer. I was not a partyer. I was not a man about town. Dave Jr. is. He wines and dines them. And it takes that kind of thing.”

Though Fussell can be as charming, he has an edge to him. He was elected a county commissioner in 2004, but he’s not the politician his father was, says Larry Howard, who has been on the board with both. “His daddy was shrewd. His daddy knew how to go about getting what he wanted. He wasn’t as aggressive as David is.” For his part, Fussell admits he has become more assertive — a trait he says could have been a real asset earlier in his career.

Photo by Steve Exum

He returned to Duplin full time in 1994. Things were improving, but the winery had yet to have a profitable year. In ’95, 60 Minutes aired a report that said substances in wine can raise the level of the good cholesterol that prevents heart attack and stroke. Suddenly wine was a health food. Duplin made its first profit that year and has been profitable since. Subsequent studies have shown that muscadine wine has more of those compounds than other wines. “The health issue has made all the difference in the world, both in sales and also acceptance. We have a lot of folks who drink a little Duplin wine every day religiously for their health purposes. I don’t see as much animosity now.”

In 1997, the Fussells started Resveratrol Inc. — named after a substance abundant in muscadine wine — to make and market health-care products, including a dietary supplement and skin creams, derived from grapes. It isn’t profitable yet, but Fussell thinks it has tremendous potential.

Dave Jr., 38, became president of the winery in 2004. Fussell says his three sons — Patrick, 36, runs the vineyard; Jonathan, 30, heads retail operations — are calling the shots, but he still gives advice, solicited or not. “If he won’t like it, we don’t let him know about it,” Dave Jr. says. “We do it anyway. But if he says we’re going to do something, then there ain’t no way of stopping it.” The family owns 62% of the company — Fussell’s 27% is the largest share — and growers who were paid in stock when Duplin couldn’t pay cash own most of the rest.

The family has a 37-acre vineyard on a 70-acre farm it bought in ’96, but Duplin gets almost all its grapes from 43 contract growers in three states. It has about 35 full-time employees, and sales are expected to push 200,000 cases this year. Duplin still isn’t well-known outside the state, but it moved into South Carolina six years ago, Virginia and Georgia in 2004 and Tennessee earlier this year.

Since it was founded, there has been a renaissance in Tar Heel winemaking, especially since growers have shown vinifera can be cultivated in the Piedmont and mountains. With 53 wineries — five opened last year, with 10 more expected by the end of this year — the state ranks 12th in wine and 10th in grape production. “Last year, all the North Carolina grapes were not consumed,” Fussell says. “A lot of them went unharvested on the vines. Plus this year, we’ve got a lot more going in the ground. And the market hasn’t increased that much. So it’s scary to me because I’ve seen farmers hurt.”

To some extent, he has himself to blame for the growth. Not only did he pave the way, but he has been generous in sharing what experience has taught him. “I’ve been in his office when vinifera winery owners called him, and they’re not calling to ask him how his day was,” says Randy Drew, who is making a video about the industry’s resurgence for the North Carolina Wine & Grape Council. “They’re wanting information.”

It’s only fair he is generous with his time. Others have been generous to him, especially his dad, who at 92 still holds the mortgage on the winery’s gift shop-restaurant complex. “Don’t ever lend money to your sons,” Fussell jokes, “because they won’t pay you back. We owe him approximately $1.3 million today, with accumulated interest.”

“Well, you probably owe $2 million,” his father replies.

The winery is Duplin County’s biggest tourist attraction, according to Woody Brinson, the executive director of the county’s economic-development commission. Fussell estimates it drew 75,000 visitors last year — including church groups. Dave Jr. hopes to put a vineyard and perhaps a hotel, farmer’s market and champagne cellar within sight of I-40 to lure passersby. “The whole deal for us is to try to get folks to come to Rose Hill and have a good time at the winery and leave with a couple of bottles and then when they get home continue buying a couple of bottles.”

But the winery still doesn’t get top billing in its hometown. Signs welcoming visitors and banners along its streets proclaim it the home of the world’s largest frying pan, a monument to the region’s poultry industry. Why no signs proclaiming Rose Hill the home of the world’s largest muscadine winery? “I don’t think politically, right yet, it’s the right thing to do,” Fussell says. “But the time will come. The time will come.”