Pernod buys Kenwood Vineyards

Kenwood Vineyards has been sold to French wine and spirits leader Pernod Ricard, which owns brands such as Absolut vodka, Beefeater gin and Jameson Irish whiskey.

The still winery, owned by Guerneville sparkling winemaker F. Korbel & Bros. since 1999, was purchased by the Paris-based corporation, the company announced April 24, for an undisclosed sum. The sale, which Reuters estimates at less than $100 million, is expected to close by June 30.

The purchase marks Pernod Ricard’s first still winery in California. The company’s U.S. branch is headquartered in New York and also owns Mumm Napa.

Pernod Ricard Winemakers, the premium global wine division of Pernod Ricard, founded in 2010, will manage the Kenwood winery operations.

Margie Healy, vice president of communications at Korbel, said Kenwood had not been up for sale but the French conglomerate approached the sparkling winemakers last year in an effort to expand its wine business in the U.S.

John Sheela, and his brothers-in-law, Mike and Marty Lee, founded Kenwood Vineyards, located in the old Pagani Brothers jug wine facility off Highway 12, in 1970. The winery quickly became known throughout the Valley for its award-winning premium varietals.

In 1996, Korbel, a 150-year veteran in Sonoma County’s wine industry renowned for its sparkling wine, purchased a 50 percent share of the winery and later bought out the founders. Korbel owner Gary Heck grew Kenwood from 300,000 cases sold in 1999 to upward of 500,000 cases.

Pernod Ricard was formed in 1975 through a two-business merger and owns many widely known brands. Its premium wines include Jacob’s Creek in Australia, Brancott Estate in New Zealand, Campo Viejo in Spain and Graffigna in Argentina.

Bryan Fry, president and CEO of Pernod Ricard USA, said in a statement, “We are dedicated to significantly expanding our U.S. business. ... We see continued growth in the wine and champagne category in the USA, and we are focused on seizing opportunities to help us grow our share ahead of competition.”

Heck, whose family has owned Korbel since 1954, said, “We are pleased to hand the stewardship of Kenwood to Pernod Ricard, and expect that they will continue to build upon the brand’s successful legacy.”

The Kenwood sale will end Korbel’s ownership of still wineries. In 2012, Korbel sold two of its other three Sonoma Valley-based wine brands, Valley of the Moon Winery and Lake Sonoma Winery, to West Coast Wine Partners.

After the sale is finalized, Korbel will no longer have any stake in Kenwood. Healy said this would allow the company to focus more on its brand. “Now we will have the time to dedicate ourselves even more to our sparkling wines.”

Pernod Ricard USA is the largest subsidiary of the Paris parent company, which employs 19,000 people across the world. Pernod Ricard USA has roughly 850 employees across the country.

“Our goal is to preserve and build upon Kenwood’s venerable tradition,” said Jack Shea, vice president of communications at Pernod Ricard, noting the company will increase marketing support for the brand as a “top priority” for its Wines and Champagnes Division.

In 2013, Shea said, Pernod Ricard USA committed to expand business in the U.S. and realized it needed a stronger presence in premium California wines. “We’re fortunate and thrilled to now have that opportunity, thanks to this acquisition,” Shea said. “Kenwood was particularly attractive given its heritage, as well as the quality of its portfolio.”

Shea said the company is conducting a “careful recruitment process” for positions across the Kenwood business. He added that part of this process includes giving current employees the opportunity to learn more about Pernod Ricard and referenced the company’s track record of smooth and successful integration in acquisitions.

A final staffing determination, Shea explained, will be made in the next few weeks.

“(Pernod Ricard) has acquired businesses before and knows what its doing,” Healy said. “We have no doubt that Kenwood is in good hands.”

The French company’s short-term goal will be to focus on the “integration” of Kenwood, according to Shea.

Still, Reuters quoted Pernod Ricard Chief Financial Officer Gilles Bogaert as saying the company is open to other “tactical acquisitions of premium brands such as Kenwood.”

All assets of the Kenwood Vineyards brand are included in the sale, including trademarks, inventory, winery facilities and estate vineyards, as well as additional acreage of grapes planted throughout Sonoma County.