Billionaire Bill Foley bets on getting bigger in competitive Sonoma County wine industry
Billionaire Bill Foley’s formula for success? Start from scratch, put the pedal to the metal and go big.
As a corporate attorney, he took over a small title insurance firm in 1984 and turned it into a Fortune 500 company. Fidelity National Financial of Jacksonville, Florida, earned almost $10 billion in revenue last year.
Twelve years later, he bought a single Santa Barbara vineyard and grew it through buyouts and acquisitions into Foley Family Wines, the 18th largest wine company in the country last year, on pace to produce about 1.6 million cases for 2017.
Now, at age 72, Foley’s newest venture brings ice hockey to the desert as owner of the new Vegas Golden Knights, which played their first regular season game in Dallas on Friday night. He owns about two-thirds of the investment group that paid $500 million to the National Hockey League for the rights to bring the first major professional sports team to Las Vegas.
“I kind of get involved in something and if I have figured it out, then I want to move on and do something else. I don’t want to sell anything. I’m never a seller,” he said in a recent interview.
The stake in hockey, a lifelong passion sparked by playing the game on frozen ponds as a child in Ottawa, Ontario, has reorganized his life, both personally and professionally. He stepped down as executive chairman of Fidelity in January 2016 and into a nonexecutive role, and he and his wife, Carol, moved out of Florida. They are now Nevada residents and spend some four months of the year at their home on the Chalk Hill Winery estate in Healdsburg. Their Montana ranch serves as a summer residence.
But Foley still has unfinished business in the wine world since going on a buying spree for bargains in the aftermath of the 2008 financial crisis. He picked up the historic Sebastiani Vineyards and Winery in Sonoma as well as Chalk Hill, Sawyer Cellars in Napa Valley and Lancaster Estate in Alexander Valley, all part of a package of acquisitions he made through 2012 that totaled more than $200 million.
Even though he now owns 27 labels and farms 3,000 acres of vineyards worldwide, he needs, in short, to get bigger.
He wants to ramp up production quickly to at least 2 million cases annually, a benchmark at which Foley Family Wines will be big enough to continue to attract the attention of large wholesalers and retailers within their increasingly consolidated marketplaces. By contrast, the top three companies - E &J Gallo Winery, The Wine Group and Constellation Brands Inc. - had more than half of all domestic sales last year at 183 million cases combined, according to Wine Business Monthly.
“The little guy has a tough time getting enough attention in getting our wines sold,” said Foley, who also owns EPIC Wines & Spirits, a California distributor of Foley Family Wines as well as bottles from other wineries. In other states, Foley has to rely on major distributors such as Southern Wine & Spirits of America and Republic National Distributing Co. to place his cases with merchandisers and restaurants.
“I see that in our distributor in California,” he said. “We have to focus on the larger players we distribute for as opposed to the smaller players. We need to make the gross profit. That’s one reason I have to get bigger in the wine business.”
To accomplish that goal, Foley made one of the biggest moves of his wine career last month by hiring Hugh Reimers, president of Jackson Family Wines until a management reorganization earlier this year, as his chief administrative officer. Foley readily admits that past top executives have not worked out at his wine business. But he is bullish on Reimers, an Australian native who made a name for himself at Jackson by spotting premium boutique wineries in places such as Oregon that were primed for greater expansion in the marketplace.
For example, Foley said he “really would have liked” to have bought the WillaKenzie Estate, a Willamette Valley producer of single-vineyard pinot noir and pinot gris, which Jackson bought last year under Reimers’ guidance.
“He’s the type of guy I look for in every one of my businesses. I believe in delegating responsibility and authority. If you find the right guy and do that, you can really grow your business and be successful. I have done that in the title business, my financial services company, my restaurant business,” said Foley, a West Point graduate.
Foley’s love for the Army and for its discipline has extended to the business world. That includes naming one of his companies Black Knight Financial Services after the nickname of his alma mater, though an attempt to do the same for his hockey team encountered opposition.