(Wines&Vines) - As president of Jackson Family Wines, Rick Tigner sends dozens of employees to the Unified Wine & Grape Symposium every year. He says the company’s production and sustainability teams represent the largest contingents, primed to gain insight and learn about innovations for the vineyard, wine laboratory and beyond.

This year the Program Development Committee for Unified tapped Tigner to speak at its second annual keynote luncheon, taking place Jan. 27. In preparation for the event, Tigner spoke with Wines & Vines about what he’ll discuss in his keynote address and what he views as the most important issues facing the wine and grape industry today.

Energy and water savings
According to Tigner, water is the No. 1 problem for wineries in California and beyond. He credits Barbara Banke and her late husband, Jess Jackson, founder of Jackson Family Wines, for having the foresight to start thinking about water use years ago.
“In the big picture of wine companies, it takes about 6 gallons of water to make 1 gallon of wine. At Jackson Family Wines we’ve got it down to 3 gallons of water,” Tigner says.

“We have soil monitors in the vineyards that know when it’s time to irrigate,” and we reuse rinse water up to 10 times. “We’ve been working on this for over a decade, it’s just that technology in the last several years has improved.” (Read about how wineries in California’s Russian River Valley are partnering with The Nature Conservancy to save endangered species during the drought on page 40.)

About five years ago Jackson Family Wines installed a Cogenra solar array on top of a barrel-washing and bottling facility with the intent of using solar energy to heat water. Recently the company selected one of the vendors that will help expand its solar display to 7 megawatts, an installation Tigner says will be the largest of any winery in the United States.

“The technology in solar panels has gotten a lot better,” he says. “The payback on solar panels has improved, and the government rebates on solar panels make it more economically feasible to do it.”

Tigner expects that government rebates for solar installations will not last forever, which compelled JFW to act now. Even with the rebates, the company will spend about $13 million installing the rooftop panels. Then again, sustainability is one area where JFW is willing to spend money, with the philosophy it will pay for itself in the future.

Machine harvesting and immigration
Technology has also come a long way for mechanized harvesting of wine grapes, according to Tigner, who says JFW has implemented mechanical harvesting and optical sorting technology in parts of the 5.6 million-case company that includes more than 30 wine labels. (Read more about optical sorters on page 90.)

“The machine-harvested fruit that comes off (our Pellenc mechanical harvesters) is spectacular,” Tigner says. “It might be an investment, but it’s an investment for quality.”

He also plans to talk about the role of immigrant labor and immigration reform, a topic important to many in agriculture, “On some of the slopes and for some of the vineyard trellises, you can’t have a machine harvester.”

Supply and demand
Foreign workers are not the only divisive topic facing the wine industry. Wines from overseas are having an effect on domestic wine sales as well. “Imports as a percentage of domestic consumption has been increasing, and I see that continuing,” Tigner says, pointing to the diversified interests of the Millennial consumer. “If you just think about the number of (wine) suppliers, and how many imported products are coming in, the selection of wine is not necessarily unlimited, but almost.”
To that end, Jackson Family Wines has invested in overseas properties such as Château Lassègue in Bordeaux, France, and Hickinbotham in McLaren Vale, South Australia.

In order to create brand loyalty, Jackson Family Wines focuses on tasting room experiences. The company also invests heavily in social media for certain brands. He said that Chardonnay and Pinot Noir producer La Crema has 250,000 Facebook fans, but other JFW brands like Mt. Brave (starting price $75 per bottle) aren’t driven by social media.

“You could argue that for our luxury brands, it’s about consumer or collector scarcity, not about social media awareness,” Tigner said. “You don’t have Harlan and Bond (Estates) and Grace Family (Vineyards) on Facebook. That’s not what drives their business model. What drives their business model is a high level of quality and 100-point scores.”

Tigner says it’s not that consumers who buy high-end wine aren’t on Facebook, but that is not where they go to get information about wine.

Exports
Ten years ago, Tigner says JFW had 10 people working for the company’s international sales department. In recent years that number has tripled as the company built teams in Asia, Europe, South America and the Caribbean that can deliver reliable information.

The cost of entry to emerging markets such as China, Brazil and India is very high, he says, and education about U.S. and Canadian wine is minimal.

“You can dilute your business pretty quick if you start investing in the international market,” he says. “The labeling and regulations in these other countries are sometimes cost-prohibitive.

“In America we embrace imports. The excise taxes they pay are miniscule compared to the taxes and duties we pay going into these emerging markets.…If you go to Brazil it’s marked up 100%. If you go to India it’s marked up 400%,” Tigner says.

For companies like Jackson, Tigner feels confident that, given time, consumers in emerging markets will develop an interest in premium California wines.

Smaller players
For smaller premium wineries, Tigner believes there is enough demand for premium wine in the United States that it is unnecessary to spend time and money on exports.

Instead, he advocates a sales plan that accounts for on-p remise and DtC sales.

“If I was a small guy, I’d spend some energy on my DtC business, because that creates brand loyalty and the margins are good. But I would also want to have my wines available on the “right” wine lists in a major market. That builds brand awareness,” he says.
Tigner offers Jackson’s 16,000-case Hartford Court as an example. DtC sales make up about 40% of the winery’s total volume. Another 30% goes to off-premise sales.

“We want to be in the right retail accounts that promote our brand as a prestige account. We’re in New York, and we want to be in the right restaurants,” he says.

“You need people who are going to take your brand and tell that story to the restaurateur, who is then going to tell it to the consumer,” Tigner says. “That’s why I’m always big in wine education.”