Jackson Family Wines Buys Penner-Ash

Founders of Oregon Pinot Noir winery will continue in roles as JFW takes over marketing, distribution and administrative duties

by Peter Mitham
vineyard penner-ash winery sale jackson family wines oregon
Ron and Lynn Penner-Ash are selling the winery they founded in 1998 to Jackson Family Wines.
Newberg, Ore.—It’s one more notch on the old grapevine for Jackson Family Wines, as the wine producer from Santa Rosa, Calif., grafts yet another Oregon property into its company.

Penner-Ash Wine Cellars of Newberg has agreed to a deal, set to close within the month, that will see Jackson Family Wines acquire substantially all of Penner-Ash Wine Cellars’ business assets, including the winery and approximately 15 acres of sustainably farmed estate vineyards. The two companies will work together “to produce, market and sell” the 15,000 cases of wine Penner-Ash produces annually.

In practice, this will mean that winemaker Lynn Penner-Ash will control “all winemaking decisions, including grape sourcing,” while Jackson Family Wines will provide “enhanced sales, marketing, distribution and back-office administrative support.”

“Running a small business over the last 18 years, it’s not easy,” Ron Penner-Ash, who launched Penner-Ash Wine Cellars with his wife, Lynn, in 1998, told Wines & Vines. “There’s a lot of distractions. This allows us to focus again on what we love to do, and that’s Lynn making the wine, and myself (doing) community outreach and working with nonprofits.”

The sale emerged from a three-year working relationship the couple has had with Jackson Family Wines, which has included sourcing fruit from some of the company’s Oregon vineyards for their own wines and Jackson Family in turn being impressed with what happened to the fruit.

“This is truly an organic process for the last three years. We’ve been working together, we’ve been impressed with each other,” Penner-Ash said. “We didn’t shop the winery; it’s the natural evolution of working with a partner with a shared vision.”

The shared vision has led to shared operations that will see the Penner-Ash brand expand its production of single-vineyard Pinot Noir, while giving Jackson Family Wines access to their expertise as it continues to grow its business in Oregon.

The vintner purchased space for a local headquarters and dedicated winemaking facility in McMinnville in January (see “Jackson Steps Toward Oregon Winery”), following on the purchases of hundreds of acres of vineyard land since 2013.

Acquisition opportunities seem set to continue
Speaking at the Oregon Wine Symposium this past February, Mark Freund of Silicon Valley Bank said that upwards of 38% of winery owners in the state are considering the sale of their businesses, meaning as many as 260 properties could be in play (see “Forecast Calls for Continued Sales in Oregon”). 

“The market is so strong,” said Mario Zepponi, a partner at Santa Rosa, Calif.-based Zepponi & Co., which helped broker the deal between Jackson Family Wines and Penner-Ash. “Some people have reached a point in their lives where they feel it’s a good transition point to at least have the discussion—maybe not necessarily pull a trigger on a transaction, but to at least have a discussion.…We’re seeing a lot of that.”

This could well translate into another robust year for sales, with Zepponi saying valuations this year are, “really pushing all-time highs.” (Financial terms of the Penner-Ash sale were not disclosed, nor were terms disclosed for Crimson Wine Group’s deal in January for Walla Walla’s Seven Hills Winery.)

Zepponi said many owners feel there’s an opportunity to recoup the value in the brands they’ve built, with some older owners seeing an opportunity to secure the succession of the business. Proceeds are either funding new ventures or furthering the ancillary interests of the owners.

He points to the case of Joe Wagner’s sale of Meiomi in 2015 (see “Rapid Growth Prompts Sale of Meiomi Brand”), suggesting that the same fate could await Wagner’s Oregon brand, Elouan.

Meanwhile, the acquiring companies see opportunities to develop and diversify their portfolios.

“I would expect you to see a continuation of this,” Zepponi said. “In the past I’ve been a bit concerned about just how long this cycle can go…(but) I think there’s still a long enough runway for this to continue on for the foreseeable future for at least the next 12 to 24 months.”

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