just the Answer - Jackson Family Wine's president Rick Tigner
Jackson Family Wines’ president Rick Tigner sprung to prominence in the US through appearing on reality TV show ‘Undercover Boss’. But, away from the bright lights of TV-world, the 52 year-old remains focussed, both domestically and globally, on the California-based company he leads. Here, just-drinks’ deputy-editor James Wilmore talks to Tigner about working for America’s other famous Jackson family
just-drinks: You’ve been on a spending spree, buying estates over the last year or so. What prompted that?
Rick Tigner: Several things; there’s been a lot of great properties that have come on the market, in Napa and up in Oregon. Interest rates are also at all-time low. We’re in growth mode.
j-d: Why are you particularly in growth mode now?
RT: Wine consumption in the US is up, so demand is up... in the premium part of the market. We’re really focussed on that $12 to $15 segment, that’s where we swim. But I think in that sub-$10 category, it’s a struggle, because it’s so competitive.
j-d: You also acquired your first Oregon winery last year. Why buy there now?
RT: It was when we saw the great quality vineyards that were for sale (in Oregon) and the value. We need those growth engines. It’s not a discounted Pinot Noir market (with Oregon wines). The only issue with Oregon sometimes is around grape ripeness. But, the land is good and the premium pricing from Oregon means that it’s a good business model.
j-d: Are you happy with how the company performed last year?
RT: Of course. Demand is up ... we are growing above category averages and the US (wine) category is growing. We are focussed on the things we do well. Nobel varietals: Chardonnay, Pinot Noir. We don’t get caught up with faddish items.
j-d: You’ve talked about a ‘sea of sameness’ in the wine business. What are you doing to make the Jackson Family Wines different?
Rick Tigner, Jackson Family Wines' president
RT: If you look at marketing for the wine business for the last 30 years, you open up a magazine, what do you see? You see the picture of the bottle, the vineyard, then the rating. We do still advertise in that fashion, but we use social media too, we use Twitter, Instagram. We even have a Kendall Jackson app - we’re trying to stay on the cusp of innovation. The key to social media is creating content. We have a dozen social media people who work for our company.
j-d: Where is your focus at the moment, brand-wise?
RT: Kendall-Jackson has been the number-one selling Chardonnay in the US for past 23 years. We don’t take that for granted. But, a lot of people think we’re just Kendall-Jackson, instead of Jackson Family Wines. Globally, we’re much more concerned with trying to promote the artisan brands in other countries.
j-d: What’s your approach to selling wine in China? How big is the opportunity?
RT: We went there about four years ago, but we didn’t have the intelligence, we had nobody there. Now, we have four people (based) in China. If you look today, it’s the fifth largest wine consuming country in the world. When their per capita consumption goes from 1 litres to 2 litres, they’ll be number one, so you cannot ignore that. We are still very small there, around 20,000 cases.
j-d: Would you consider buying wine property in China?
RT: It’s a very complicated market. Our COO is actually going over there during Vinexpo Hong Kong and will have a look at vineyards. Within the next five or ten years we would like to be there. We really think China will continue to be an opening and emerging market.
j-d: How do you see the wine market in India?
RT: When some of that taxation starts to come down, around 2016/17, it’ll be an opportunity. We are there, but we don’t do a lot of cases.
j-d: And Brazil?
RT: I’m very bullish on Brazil. Its per-capita consumption is still low, but they don’t have a wine-drinking culture. The problem is, the taxation of American wine is so high, it’s primarily Chilean or Argentinian wine. If I can get to 50 great restaurants in Brazil and get American wine on the wine list, that would be a huge move in the right direction. If you go to Brazil and open up the wine list, you very rarely see American wines.
j-d: But, the US remains the focus for you?
RT: The focus market in the world today is America. We have to figure out how to stay strong. The US is 90+ % of our sales.
j-d: Should we expect more M&A activity this year from Jackson Family Wines?
RT: The answer is ‘yes’. We’ll continue to look at various properties. But, right now, our biggest focus in 2014 is ‘improvements’. The capital we will spend is to make the improvements on the properties we have purchased recently. If you asked Barbara (Banke, Jackson Family Wine’s chairperson and wife of the company’s late founder Jess Jackson) what her wish list for acquisition is, it would be Italy, then ... Italy. We already have a winery and 2,000 acres there, but if there were some quality estates on the market, that would catch our interest.
j-d: How about closer to home?
RT: A company like Treasury Wine Estates, which might have its individual struggles, has some incredible assets, that would be something we would be interested in. They have some nice properties ... but I have no idea what they are doing.
The thing I think about Treasury is they really do have some good brands. How they’ve been marketing those brands is some kind of a mystery to me.
We are always looking at opportunities that may or may not come up. We’re looking at how do we create a long-term business that will last the next 100 years.
j-d: And you still have the funds to grow?
RT: Yes. We are a very strong company, financially.
j-d: How concerned have you been by the drought in California?
RT: It’s on everybody’s mind. We’re as concerned as any other winery. But, we’re feeling relatively comfortable with this week’s rain. We’re also reliant on lots of growers so we’re making sure we’re looking after them. It will affect this year and next year. The good news is that 2010 and 2011 were short harvests, while a lot of people think 2012, 2013 were big harvests. They were, but 2014 looks like it will be good, not as good as 2013.
j-d: Do you expect prices to rise?
RT: The less supply, the higher the prices.
j-d: Are you happy with the US Government’s attitude to the wine industry?
RT: I think we are. The only thing we’d like to see is having better trade relationships with the emerging markets. That would be a great opportunity for California's wines in Brazil, India and China, where there’s high level of taxation. I’d like to see those come down and the cost of entry into those emerging markets to be lower.
j-d: Do you think that the rise of craft beer in the US is a positive for the wine industry?
RT: Sometimes people say to me - ‘what are you doing about the craft beer business’? I can’t do anything about the craft beer business. They are bringing education about different kind of beer styles, whereas people used to just drink Bud, Miller and Coors. Ultimately, it is a share of stomach; people can only drink so much alcohol.
j-d: Do you see yourself finishing your career with Jackson Family Wines?
RT: Yes, 100%. I love the family, they love me. But I also have my own vineyard in Sonoma. I’m actually in the process of developing my own little wine brand, but giving the money to charity ... to the Michael J Fox Foundation, I’m on the board of that.
j-d: After becoming a reality TV star over the last year or two, would you consider similar offers?
RT: I don’t know about star! It was a great experience for me. For me, it goes back to the sea of sameness. If we can get our message out in different ways, I’ll volunteer for that. If it’s for the good of the organisation, it’s the right thing to do.
Companies: Treasury Wine Estates
Canadean's "Treasury Wine Estates Limited - Company Capsule" contains in depth information and data about the company and its operations. The profile contains a company overview, key facts, major prod...
Treasury Wine Estates has faced serious challenges since its spin-off from Foster’s Group in 2011. The US, which was a key component of its turnaround plan, has thus far failed to pay dividends. In 20...
The report provides a review of the mergers and acquisitions (M&As), partnering deals, and agreements entered into by companies active in the global wine market during December 2013....
- Comment - Diageo Spins the Guinness Wheel... Again
- Diageo's Labels Give Industry Something to Digest
- Comment - 'Craft' and the Danger of 'Romance Copy'
- Who should Stock Spirits Acquire?
- Is A-B InBev/SABMiller 'Mega-Merger' Off?
- Diageo lines up UK innovations push
- Craft is an 'abused' term - Pernod Ricard exec
- Pernod Ricard queries nutritional label use
- SPI Group 'disappointed' over Stolichnaya ruling
- Diageo's Guinness Golden Ale
- Global rum insights - market forecasts, product innovation and consumer trends research
- Global non-Scotch whiskies insights - market forecasts, product innovation and consumer trends research
- Champagne: Less Than Bubbly
- Beer Market Insights Africa 2014
- ALDI 2015: Radically transforming Anglo Saxon grocery markets