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Thursday, May 1, 2014

A Short History of Kenwood Vineyards

Kenwood Vineyards was recently in the news as it's being sold (again). Yes, again.

For 60-some years it was the site of the ol' Pagani Brothers Winery. This was a place where you'd take a jug in and for a dollar you could fill it with either white or red. In 1970 brothers Mike and Marty Lee, brother-in-law John Sheela, plus a few moneyed investors bought the winery and some vineyards. Many thought they were crazy to attempt a premium winery at this location--and in Sonoma County of all places! Robert Mondavi had only recently established the now iconic Mondavi Winery "over the hill" in Napa Valley.

Kenwood Vineyards. Kind of a rustic looking place.
Their wines could be called rustic, too.
Image from kenwoodvineyards.com


Kenwood Vineyards steadily grew during the 70s, 80s, and 90s under their leadership. In 1996 Gary Heck of Korbel bought part ownership then took full control in 1999 as the Lee brothers and Sheela retired with a nice chunk of change. Mike Lee stayed on as head winemaker for awhile.

In 1997 they had purchased the rundown Valley of the Moon Winery making significant improvements in the facility and the wine. So when Heck bought Kenwood he also got Valley of the Moon. Heck also purchased Lake Sonoma Winery to create a nice little wine empire. Kenwood has doubled its production (if not its quality) under Korbel to 600,000 cases a year.

Gary Heck is getting close to retirement age and has wanted to get back to running just the Korbel Champagne and brandy business. Valley of the Moon and Lake Sonoma were sold off not too long ago.
Artist Series Cabernet
from the "old days"

Just a little over two years ago Korbel announced they had sold Kenwood Vineyards to Banfi Vintners, a wine company out of New York. That deal fell though at the last minute when Banfi discovered Kenwood didn't actually have the vineyards, or more importantly, the production facilities to make anywhere near 600,000 cases of wine. Many of the grapes came from Gary Heck's vineyards and most of the wine production was at other of Heck's facilities. Without the ability to actually make the wines Banfi backed out just before signing off on the purchase.

A couple weeks ago Gary Heck announced the sale of Kenwood Vineyards to Pernod Ricard, a French wine and spirits corporation. They already own Mumm Champagne. After the purchase they said the usual corporate stuff about "wanting a winery of considerable scale" and "wanting to be a big player in the American premium wine market." More telling is they want Kenwood to be a larger player nationally--that sounds like increasing production even more.

Also, on "corporate stuff" they are requiring all Kenwood employees to reapply for their current job. Personally, I had to do that several times while working at H-P. It seemed incredibly stupid and it never exactly made the employees feel great. So I will guess taking care of the people that got Kenwood where it is today will not be part of their core strategy. Pernod Ricard probably has a better idea. (Yes, you might note the sarcasm here).

Kenwood Vineyards appears to be on its way to becoming another corporate winery. Of course, this deal could always fall through, too, as the sale won't close until June.  Update: The sale was finalized on May 21st.

As a long-time Kenwood fan I hope they keep the reasonable prices, increase the quality of some products, and keep the employees happy. In my experience happy employees make good products.