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Jackson Family Wines Purchases WillaKenzie

As usual when it comes to all things Sonoma, the Press Democrat had the story first.  Read about their thoughts on Jackson Family Wines purchasing WillaKenzie here.

There’s a few good reasons why Jackson Family Wines continues to gobble up high end wine brands throughout Sonoma as well as, increasingly, Oregon.  To start, it takes quite some time to buy property and get an estate vineyard up and running. About 5 years or so in total, at a minimum and for extremely high quality Pinot Noir, the process may run slightly longer than that.  So the outright purchase of a winery, especially one of this size which includes an established winery, 100 acres under vine and more, can make more sense financially for a large company than buying the vacant lot next door for a fraction of the price.

Really though, these acquisitions are all about 2 things.  First, Jackson Family Wines has the staff to manage multiple wine brands at once.  This is literally what they do best. Some of the brightest and most efficient people I know within the industry got their start managing brands for some of the largest wine companies on the planet.

Second (and really the most important) this is ALL ABOUT distribution and sales.  Larger brands are able to produce sales in ways that smaller ones simply are not. From combining sales with distributors, to simply getting these upmarket brands into their current distribution partnerships, the ways to increase sales for Jackson Family Wines when they bring on a new property, is hard to understate. Especially when it comes to the dog eat dog world of restaurant placements, and specifically the battle for by the glass restaurant placements, the big boys have a huge advantage.  WillaKenzie’s Pinot Gris program is perfect for this and I’d suspect, will show up at a restaurant near you in the near future.

From my perspective, sourcing for my wine of the month club does get a bit more tricky when stuff like this happens. From a quality perspective, WillaKenzie was a nice fit before the merger, but the folks that started the brand back in the early 1990’s won’t be involved any longer. The property is still a good fit of course, but I can’t exactly act like I’m providing much of a “finding” service here, given their newly found distribution muscles. A more interesting idea for this stuff, is to watch and see what the owners try and do next.  Generally, the wine industry does not include non compete clauses in these types of transactions in the way that other industries might and given their financial windfall, I wonder if the owners are going to be buying a new piece of property somewhere else in Oregon.  I’ve seen it happen multiple times, but the transition from selling Rosenblum to opening Rock Wall Wine Company is a great example here locally to me.

In any case, for consumers these type of acquisitions tend to decrease choice, much of the time without many realizing it, because they lead to large wine brands taking up increasingly difficult to get spots with the few remaining wine distributors.

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