Jackson Family Wines Buys Siduri Winery

Jackson Family Wines purchased Siduri Wines of Santa Rosa, Calif.  Terms weren’t disclosed.

The agreement gives Adam Lee and his wife, Dianna, more time to make wine — something they’ve been doing for 20 years in a Santa Rosa industrial park — as well as access to some of the Jackson Family’s acclaimed pinot noir vineyards, which Lee describes as “some of the best in California and Oregon,” following a purchasing and planting spree in the past couple of years.

Lee grew up Southern Baptist in Austin, Tex., a faith tradition known for being a stalwart opponent of alcoholic beverage consumption of any kind.   When we interviewed him last June we wondered what ever led him into the alcohol beverage business.

In a word: College.

“When I was a junior in college I had a friend who was a senior. He got a job out in Walnut Creek, California. I spent my summer out in Northern California between my junior and senior year going and visiting wineries during that time.

“I thought I knew something about wine, I liked Mondovi white zin better than Sutter Home white zin, and Chateau St. Michelle Riesling was something we took to the park at Stern Grove . I discovered this one place that I really like their red wine and it was the first red wine that I found really appealed to me. It turned out that the place was Rochioli Winery, and the first red wine I fell for was the 1984 Rochioli pinot noir.”

Lee graduated college with a degree in French History.  He had specialized in comparisons of French and American prison systems, but somehow that did not lead to a job after school so he ended getting a job in a wine shop in Austin, Texas , while trying to figure out about going to graduate school.

The First Step into Wine

He didn’t apply for the wine shop job. Instead, he showed up for tastings. The shop owner was always running late, and said to him, “Adam, if you help me set up I’ll comp your tastings.”

“Being I wasn’t gainfully employed, that was huge,” Lee said. “I would help him set up the tasting, and after a while he told me he was opening a new store and wanted to know if I was interested becoming Assistant Manager at that store. I think he knew that I didn’t know a lot about wine, but I seem to have a huge passion for it. I would do basic bookkeeping, open the store, close the store, wouldn’t steal from him.”

It was, Lee said, “a great opportunity to learn about the world of wines.” He ended up becoming manager of the store, then spent a short period in wholesale before moving to Dallas, getting a job as one of the wine buyers at Neiman Marcus, the upscale Dallas department store.

“It was again a wonderful opportunity. A lot of wineries wanted their wines in Neiman’s. I believe that six Neiman stores had wine departments. They had a great clientele. The day I started there was the day that a young lady name Diana Novi started as one of the epicure department buyers.

“We went through training together spent a couple of weeks doing that. We started dating shortly thereafter. Diana likes to tell people that she started going out with me because I had good wine and because I was the only straight guy that worked at Neiman’s. That helped my odds tremendously. We dated and eventually decided to move out to California and get involved in the wine business.

Why Not Texas?

At the end of 1993 they moved to Sonoma County, Calif. He got a job in a tasting room and decided to take a stab at making wine.

Why didn’t they stay in Texas? we wondered. After all, Texas was developing its wine business.

“The quality of Texas wines now is higher than at that time. There are some fantastic Texas wines now. But California seemed to be the only place, after my earlier experience, that you could be gainfully employed in the wine business in some way.”

Is it possible for people to do what he did now, 30 years later? “Given the economic slowdown we just went through, it’s remarkable to see the number of wineries that are starting. People are finding their career in the wine business that didn’t have it before. I think it’s still possible.”

What led him to make wine, rather than stick to what he knew — how to sell it?

“My plan had been to write about wine. I started a small newsletter Vintages Vines & Wines and that was kind of the direction I was heading at the time.

Why Make Wine, Rather than Just Sell It

“Diana was the one who first said ‘Why don’t we try making it, let’s give a it a shot, see what happens.’ Her family was much more entrepreneurial than mine. We had saved up, between the two of us, about $24,000. It seemed like something to try with our money.

“We had a day job at Randall Bridge Winery. We were renting a home. Had we lost all $24,000 dollars it would not be the end of the world; we would still be able to pay the rent and make it. So we said ‘Let’s go for it’.

“We loved to drink was Pinot Noir. So that was what we decided we should pursue. We put an ad in a publication called Wine Country Classifieds looking for Pinot Noir. One place that applied really appealed to us. Its owner, Vernon Rose, agreed to let us buy an acre’s worth of grapes rather than the normal renters contract and we paid ahead of time for one acre’s worth of fruit and kind of followed that through the growing season. We did a lot of the work ourselves in the vineyard that year.

“I think Vernon looked at us as kids out there. But he knew were not doing anything that was harmful to the vines. I mean it might have hurt that year’s crop, but he had already been paid for that year’s crop, so he was not particularly upset about that, we just kind of pursued it from there.”

Making the First Wine

All this time they were working for just a bit over minimum wage in a tasting room at Lambert’s Mill Winery in Dry Creek, Calif. The owners allowed them to use the winery for a minimal fee. “We used their equipment, but we did the work. There were certainly things we learned as we went along, but Lambert’s Mill’s winemakers ran the equipment and then said Diana, Adams what do you want to do? And they let us do it.

“So it really was less of an apprenticeship as much as it was here how you run the equipment here’s how you clean this and so we only had one batch of grapes at the time. We fermented the wine in the same bins we picked them in. It was more of a hands on lesson in how to run the equipment. We let the wine ferment on its own all indigenous yeast. We did punch downs on our own very frequently. We actually stayed the night at the winery. We’d do punch downs every couple of hours.”

A punch down in when a winemaker takes the skins and mixes them with the juice. Most of the flavor and color comes from the skins. Using a metal or plastic paddle, or with even simply hands, the skins are mixed with the juice, extracting the flavor and color from the skins.

Why Pinot Noir

Adam’s decision to specialize in Pinot Noir wasn’t based on a market study. “For some reason, Pinot Noir is what we love to drink. I think we probably thought at the time that Pinot Noir had an opportunity in the market. It was not a particularly crowded field, at that point in time, so you could maybe make a name for yourself. But beyond that there were no studies in any way shape or form. I really don’t think that anyone at the time thought Pinot Noir was going to take off.”

The wine turned out to be decent, but not particularly outstanding, he recalled. “We had 4 ½ barrels. The vineyard had been getting about 4 tons to the acre and normally you get 2½ barrels per ton. So that would have given you 10 barrels.

“We decided that that was too much fruit. Pinot Noir seemed to respond best to lower yields. Se we took the yield down. Reduced it so we only ended up with 4 ½ barrels out of that one acre. It aged. We would let people taste it occasionally, friends of ours.

“They were all very, very positive about the wine. But we weren’t quite so sure. We were probably a little too close to it to be objective about it. We bottled it at the same time that Lambert Bridge bottled one of their wines.

Even before we bottled the wine they heard as part of their day job at Lambert Ridge that Robert Parker, the wine writer, was over in Napa and looking for wine samples. Lee says they “may have drunk a little too much,” but they got the courage to think, “Boy I think Parker would love this wine. Why don’t we get some samples over to him?”

“So we drove up to the winery. Hand bottled two sample bottles out of the barrels in pretty much equal proportions. Put a cork in it with a hand corker, a little Avery white label on it, and drove over to Meadow Wood where Parker was staying and left the wine along with a handwritten note with the Concierge for Robert Parker that evening.”

Scared to Death

The next morning Lee awoke with a feeling of dread: ” I was scared to death that we would get some horrible rating. We actually called the concierge up to see if we could get the sample back. He said it was too late; Mr. Parker had already gotten up. Diana swears that I would wonder around the house saying ‘We’re screwed.’ Maybe a little more colorful than that.

“After about six weeks we came home and there was a message on the answering machine from Robert Parker saying he tasted the wine thought it was terrific. He lost all the notes on it. Asked us to fax them over to him, which we did. Another four to six weeks after that the Wine Advocate came out and he rated the wine in the 90’s.

“People started calling up wanting to buy the wine.     We sold enough of it on futures to really to help us pay for bottling that year and allowed us to buy grapes for next year.”

That was a direct to consumer sale. Some of the buyers were people they had kept in touch with in Texas. Others were people they met in wine country. And then there was Debbie Zachareas, who bought a bit of that first vintage. She was a wine buyer from Eos, the restaurant. Now she’s a wine merchant in Ferry Plaza, San Francisco, and still carries Lee’s wine.

For the next vintage, in 1995, Lee had moved to another winery but was still making wine at Lambert Bridge. “That was a little awkward,” he says, adding that led him to move production to a custom crush operation.”

The first sale from out of state came from The Party Source, a Kentucky retailer. David Schildknecht, who now writes for the Wine Advocate, was running the store.

Sounds Easy, But It Wasn’t

It all sounds so easy. The general manager at Lamberts Bridge, Bob Grimes, had bought some land in Oregon and planted Pinot Noir. Lee and Diana decided to drive up to pick some. Early the next morning, “we get a phone call from Grimes saying it’s supposed to rain that afternoon, so we better hurry up and decide if we want to pick or not.”

They jump out of bed, drive the additional three-plus hours to get to the vineyard. When they get there, they look at the forecast and discover that yes, it is really going to start pouring. “So we decided to pick.”

They had arranged for a picking crew. But the crew was hired away by a larger winery in Oregon. Diana went through, marked the vines they wanted to pick.

“The vineyard was picked by Diana, myself and his two full-time workers. We spent all day picking. We had arranged for a refrigerated truck to come in on Friday. Because we are picking on a Wednesday, there is no refrigerated truck available so we go and find a Ryder truck.

“It was important that we use Ryder for our budget. They don’t have wheel wells, U-Haul trucks have wheel wells. So we could fit in side by side. So we ended up putting in 2 ½ to 3 tons of grapes in a Ryder truck. We ended up picking the last part of it in the rain. We loaded it up and started driving it down to California ourselves in a driving rainstorm.”

‘Welcome to California’

At the California border, they encountered an agriculture inspector. “We didn’t have any permits; we hadn’t even considered what we might need or might not need.

“This was a time when not many people were moving into California so he was thrilled to see us. “Welcome to California. You young people moving into California, we don’t see many of you going this way”

“Do you have any fruits or vegetables that you and Diana have. Well we have a few a few grapes. And she picks up a bag of grapes that had been sitting there left over.

“Ah a few grapes not big deal, go ahead go on in, Welcome to California.”

The grapes started fermenting on their way down the coast.

Picking those grapes in a driving rain gave them an abiding respect for the people who pick grapes.

After making their wine, it was time to start selling. The first year, 1995, they produced 275 cases for three different wines. “The next year, 1996, wasn’t horribly large either, so it wasn’t tremendously different.”

Things changed in 1997, when they produced nearly 1,000 cases. “That’s truly when we had to put forth a good deal more effort,” he said. “Go seek distributors, go seek press, go really try to put forth an effort to market and sell the brand. As I said 300 cases between 3 wines the amount of effort to market is much less. At 1,000 cases split between a few wines there’s a lot more work involved in selling it at that point.”

Getting Distribution

It was in 1998 that they got their first distributor. It wasn’t all that hard to sell to a few San Francisco retailers and restaurants. “But getting into South Bay and Southern California was above and beyond what we could do ourselves. So we hired a distributor.”

That was important for the growth of their business. While the fact the U.S. is the world’s largest wine market in terms of production gets a lot of press, the fact is that in terms of per capita consumption, the U.S. is only 52nd.

Lee thinks the arguments over direct shipping are somewhat silly. “The thing we need in this country is more good people drinking more good wine. If that happens, it will life all boats. So whether the wine is sold through our distributor in Texas, a retailer in Texas, a restaurant in Texas, or direct o someone in Texas, it will benefit everyone if more people have access to wine.”

In 1998 they moved into their own building, and stayed there for 12 years, moving across the street in 2010.

Designing a Label

They adopted Siduri, the Babylonian goddess of wine, for their first label. “Our label was designed by a friend, Pam Lewis. Pam’s husband, Rick, was kind of the handyman jack of all trades at Lambert Ridge Winery. Pam did label design so she agreed to do the label for us for one case of wine, that first year, which was next to nothing.

The label is a picture of the Goddess of Wine.   The first label was rejected by the Bureau of Alcohol, Tobacco & Firearms, now the Alcohol & Tobacco Tax & Trade Bureau, which had to approve all labels, because she was supposedly topless.

“We had to remove the nipples from the labels. As long as the nipples were taken off the TTB approved it.”

Adam is doing around 15,000 cases a year, and he says he’s happy at that level.

In addition to Siduri Wines, they produce Novi wines. Novi is his wife’s maiden name.

“We started it with her family, as investors. As time went by, the family was interested in getting more involved. They kept asking “Do you want investors? Do you want investors?”

Diana and I kept saying we didn’t want any investors in the business. But a great opportunity to get some grapes other than Pinot Noir came along in 1998 and that led us to start the Novi Label.

“Diana and I make it. We do everything, just the two of us, the same way Siduri is, except her family is financial investors in that. And we do anything other than Pinot Noir under the Novi label.”

Diana’s family buys, sells and services printing presses from all over the world. “They purchased printing presses from Egypt, from Germany, brought them over, fixed them up, made them as good a new. They’ve been able to make an incredible living doing that. That’s where Diana kinda got her entrepreneurial spirit came from. Early on, probably before she could legally work, she would be cleaning printing presses in her parent’s business. Smaller hands could get into smaller cracks to clean things,” he says.

Buying Grapes by the Acre, Not the Ton

Most winemakers buy grapes by the ton. But Lee buys them by the acre. We wondered why.

It was all about the ability to control the product, Lee said. “If we tell them to pull less leaves and it gets rained on and the fruit then rots, because we had them pull less leaves, and there is less wind going through them, that’s really our responsibility. In that case, if we made that call and the grower did and they weren’t compensated, it would be awful for us. So this is our ability to tell people we’re putting our money where our mouth is, and we’re doing this because we really believe it’s the best way to farm this particular section.”

Some winemakers advocate “natural” winemaking, which involves as little human intervention as possible. Lee, while following a largely hands-off philosophy, hasn’t any hesitation to jump in if necessary.

“I don’t think the vine cares about making the best Pinot Noir possible,” he says. “All the grape is trying to do is to propagate itself, to spread seeds and to make more grapes. Wine is simply a stage on the way to stability.” When human intervention is needed, Lee told us, one should intervene.

‘Follow Your Heart’

We wondered what they had learned after 20 years in business. “The No. 1 thing would be to honestly trust yourself.” When they moved to California, “we didn’t have kids, we didn’t have a mortgage, it made sense. That was the right thing for Dianna and I to do — to go to California.”

Dianna’s grandmother was very supportive and told her, “if that’s what your heart is telling you to do, now’s the time to do it. Follow your heart” — I think that’s the biggest thing we’ve learned.

When they started, they didn’t realize how important cash flow is. About two-thirds to three-quarters of our expenses occur within one three-month period.

“So we go into certain periods of the year and we look at our bank account and we say, ‘We’re rich, we’re doing well.’

And then three months later we’re like, ‘Oh my goodness we have payroll on Friday, what are we going to do.’ That was quite a surprise. It’s not a quick turnaround business. Cash flow really plays a big surprise and not necessarily a pleasant surprise either,” Lee said.

What was their biggest mistake? Naming the Novi Winery, Novi, he said. “We have no plans to sell it. If we did sell it some point down the line, then you’re kind of selling the family name. And I wish we hadn’t done that.”

This profile first appeared in Kane’s Beverage News Daily June 30, 2014.


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