Linda Murphy August 2011 column

  • Monday 18 July 2011

Brilliant and driven; impatient and arrogant. Jackson was all of these

Linda Murphy

Age 80, and dealing with the cancer to which he would succumb a year later, Jess Stonestreet Jackson restructured his company, Jackson Family Wines, parcelling out responsibilities and ownerships to family members and hired hands so the business would carry on without him.

This year, on 21 April, he died, at his 2,185-hectare vineyard estate in Sonoma County’s Alexander Valley. And despite ‘the sky is falling’ predictions by some industry wonks, there is no reason to think that the wine business Jackson built (now producing six million cases a year) won’t continue to thrive.

Obituaries hailed him as a US business hero, a Forbes 500 regular, a child of the 1930s great Depression who worked on a family farm in Colorado, put himself through law school, became a successful attorney and, as a side project, converted a Lake County orchard to a Chardonnay vineyard.

Jackson became a billionaire, sparked by the success of his KJ Vintners Reserve Chardonnay, made from that Lake County vineyard. It spurred him to buy more vineyards, establish new wineries and brands, and eventually buy others.

At the time of his death, Jackson Family Wines boasted ownership of more than 30 wine brands and 6,000ha of vineyards, among them KJ Wine Estates, Arrowood, Hartford Family, La Crema, Matanzas Creek, Stonestreet and Verite in Sonoma; Cardinale, Freemark Abbey and Lokoya in Napa Valley; Byron in Santa Barbara County; Yangarra in Australia; Château Lassegue in Bordeaux; and Tenuta di Arceno in Chianti.

Jackson retired twice in the past decade, each time handing the reins to his second wife, Barbara Banke, a barrister and businesswoman. Yet Jackson couldn’t stay away, and kept charging back into the business.

Then, in March 2010, he formally handed the reins to Banke, company president Rick Tigner (now CEO), and son-in-law Don Hartford. Jackson’s five children from his two marriages are involved too.

Don’t underestimate Banke. As owner of Cambria Estate Winery in Santa Barbara County’s Santa Maria Valley, she is a competent vintner and was a focused, logical equaliser to her husband’s scatter-gun attack of ideas and impulses.

His passions and fixations might not always have been in the best interests of the company, yet he was simply being Jess. An employee told me years ago, ‘Jess meets someone at a party, and the following Monday, they’re your boss.’ Banke is likely to be more measured in her decision-making, and show more tact in dealing with staff.

Jackson’s expectations of his employees were sky-high; when they didn’t meet them, they were shown the door.

I know former KJ employees – skilled professionals – who were let go for failing to pull rabbits out of hats. Yet there was a silver lining: many were swiftly hired by other companies that valued the battle-tested character and experience Jackson had instilled.

Jackson’s supporters call him brilliant, driven, visionary, dynamic, energetic, competitive and charitable. Detractors describe him as hard-headed, impatient, arrogant and insensitive to those who lived in areas in which he tried to develop vineyards and wineries. He was all these things.

Jackson was fond of saying ‘family farming is the foundation of civilisation’ and constantly referred to his company as family-run – which was true then, and seems set, for the time being, to remain so.

Yet with more than 1,000 employees and outposts all over the world, it acts like a corporation.

Jackson lobbied in the late ‘90s for approval of a California Coastal American Viticultural Area (AVA) that the federal government rejected.

It wisely determined that any region that ran nearly the length of California, some 1,000km from Mendocino County through Santa Barbara County, was ridiculous and self-serving to those, like Jackson, who had vineyards in this long, narrow strip of land.

He also took E&J Gallo to court for trademark infringement, claiming that Gallo’s Turning Leaf label too closely resembled the gold-foil grape leaf design of KJ’s Vintners Reserve wines.

The court ruled in favour of gallo, but locals viewed the dust-up as two enemy companies merely jousting over pride.

As philanthropists, Jackson and Banke donated millions to local and national non-profit organisations. In early 2011, they gave $3 million to UC Davis, to go toward the construction of a wine research centre devoted to sustainable agricultural practices.

Jackson ‘saved’ important California wineries Byron, Freemark Abbey and Arrowood by buying them in a bankruptcy sale, and assured winemakers it would be business as usual.

Yet a few years later, in response to a faltering economy, he moved wine production of Arrowood and Freemark Abbey to the large Cardinale Estate winery in Napa Valley, and relocated Matanzas Creek production to Stonestreet Winery in Alexander Valley.

The consolidations cost many their jobs.

Such is the world of business, and Jackson was certainly an astute businessman. His legacy as one of America’s most important and successful vintners is undeniable.

What’s in question is if, and how, Jackson Wine Estates will change now that it is in the hands of others. The smart money is on Banke and her team to keep KJ and Jackson Family Wines on top.

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