Jackson Family Wines’ latest purchase continues a trend of big corporate players entering Oregon’s wine scene, but observers aren’t worried the newcomers will dilute the industry.
Jackson Family, based in Santa Rosa, Calif., and perhaps best known for its familiar Kendall Jackson label, is buying WillaKenzie Estate winery in Yamhill, Ore.
The company has purchased at least four Oregon properties since 2013, and earlier this year spent $4.6 million for two buildings at the bankrupt Evergreen International Aviation campus in McMinnville. Jackson Family Wines reportedly plans to develop a winery on the Evergreen property.
Jackson Family is an international wine company, with operations in Chile, France, Italy and Australia in addition to the U.S.
In Oregon, Jackson Family has snapped up the Zena Crown, Gran Moraine and Penner-Ash vineyards and wineries over the past three years.
Mike McLain, an Albany, Ore., real estate broker who specializes in vineyard properties, said Jackson Family’s Oregon investment is impressive. Depending on location, raw Willamette Valley vineyard ground sells for $10,000 to more than $40,000 per acre, he said. He emphasized Jackson Family is not his client.
“I think they’re just very smart,” he said. “They’ve come to recognize Oregon is a good place to buy property that has water, which is a big concern for California.
“I don’t see what they’re doing as being a negative at all – it’s very much a positive for the Oregon wine industry,” McLain said. “They have the power to become ambassadors for the industry that other people don’t have the size and the money to do.”
McLain owns a vineyard and winery himself. His real estate brokerage, McLain & Associates, lists half a dozen new Willamette Valley vineyard properties for sale on its website.
McLain said the Willamette Valley has ample room for expansion. He said he spent 15 years mapping slope and soil types in the valley and estimates there are 200,000 acres suitable for wine grape production. Most of that is now in timber or other crops.
The expanding presence in Oregon of Jackson Family and other big wine companies such as Louis Jadot, a noted winemaker from the Burgundy region of France that has purchased at least two Oregon properties, is a matter of keen interest to people in the business.
Jean Yates, president of Oregon Wine Marketing, near Corvallis, said larger wineries are good for ancillary businesses such as Realtors, cork and label makers, equipment dealers, shipping companies and the like. Concerns include water and a shrinking labor force. Larger businesses are able to pay more and offer better benefits and might draw workers from smaller vineyards and wineries, she said.
Yates, who publishes an on-line business newsletter at oregon-wine.com, said the challenge for Oregon’s growing wine industry is to retain the characteristics that set it apart. Among them are the quirky, talented individuals originally drawn to make wine in Oregon and the collaborative, “family farm” nature of their operations. Beginning with what’s become the state’s signature wine, Pinot noir, the early founders came at it from varied backgrounds, helped each other and created an industry known for its quality, not quantity.
“That aspect of the industry is one of the things that separates us from other areas,” Yates said. “You don’t want to lose it in the rush to grow the industry.”
Yates said the Jackson Family purchases marks a second round of outside purchases of vineyards and wineries. Beginning about 2002, the California Public Employees’ Retirement System, or CalPERS, aggressively bought vineyards and wineries in Oregon. But its management company ran into trouble during the recession, triggering another round of sales.
Meanwhile, the industry appears to approve of Jackson Family’s expansion. Oregon Wine Board communications manager Michelle Kaufmannsaid the industry is “excited to welcome anyone into our community, any person or corporation, that is committed to making the highest quality wines possible and enriching our wine community, which is exactly what we’ve seen Jackson Family do with the other acquisitions they’ve made.”
Kaufmann said Jackson Family has kept Oregonians on staff at its other purchased facilities and allowed them to make their own operational decisions, so their wine brands remain distinguishable.
Mark Chien, director of the Oregon Wine Research Institute at Oregon State University, said Jackson Family’s wines are high quality, “absolutely in line” with the acclaimed wine Oregon is known for. “It’s an interesting development in the wine industry,” Chien said of the company’s WillaKenzie purchase.