Jackson Family Wines CEO: No big buyout planned to counter Gallo-Constellation deal
NAPA — The chief executive of Jackson Family Wines of Santa Rosa said Wednesday the premium wine company doesn’t plan to make a big acquisition in response to one of the biggest wine deals in U.S. history, E. & J. Gallo Winery’s $1.7 billion proposed purchase of more than 30 low-price wine and spirits brands from Constellation Brands Inc.
“We acquired some amazing properties in the last five to seven years. Let’s get back to focus,” Jackson CEO Rick Tigner said. “Let’s see what’s going to happen in the marketplace.”
He spoke at the Wine Industry Financial Symposium, sponsored by Wine Business Monthly, at the CIA Copia in Napa.
The company, founded by the late Jess Jackson 37 years ago, has been aggressive in buying smaller wineries that specialize in Burgundian wine styles, especially in Oregon, and locally with Siduri Wines of Santa Rosa and Copain Wines of Healdsburg. It is the ninth-largest wine company in the country, producing an estimated 6 million cases in 2018, according to Wine Business Monthly. Jackson has about 40 different wine brands in its portfolio.
After acquisitions, it can take up to seven years to understand the company culture, the vineyards and the brands of the boutique wineries, he said.
“It takes some time to absorb them,” said Tigner, who has been with the family-owned company since 1991.
Tigner said Gallo, already the nation’s biggest wine company, “will have one heck of an arsenal” if the Constellation deal is approved by regulators.
Still, Tigner remains confident in Jackson’s prospects amid industry consolidation because it competes at a much higher price point than its largest competitors Gallo and Constellation. It focuses on wines priced from $20 to $35 a bottle, with high-end bottles going much higher up to $400.
“We are not aiming new products at $9.99 or $12.99,” he said.
The Jackson company’s growth has come from its newer boutique acquisitions. In 2018, its higher priced estate portfolio grew 16%. For example, Murphy Goode, which it bought in 2006, sold 350,000 wine cases and grew 25% last year, he said.
The company, overseen by Jackson’s widow, Barbara Banke, still relies on its flagship brands for overall sales volume. Its top seller is the Kendall-Jackson label, whose Vintner’s Reserve chardonnay has continued to be the top seller in that category the last 25 years. ts second-largest seller, La Crema, sells about 1.5 million cases annually.
“We’re holding steady with Kendall-Jackson as our core. Do I want it to grow? Of course, I want it to grow. We just don’t want it to decline,” Tigner said.
The company is able to create and grow brands by relying on its 14,000 vineyard acres planted across the world, as well as its 41 wineries.
As it navigates the marketplace amid an overall slowing of U.S. wine sales, Tigner said Jackson will look for expansion opportunity, noting at some point the company will be in the state of Washington, known more for Bordeaux varieties such as cabernet sauvignon.
“We are focused on driving the premium part of our business,” he said. “Our future will be definitely greater than our past.”