Winery 28th brand to be acquired by Kendall-Jackson founder

Vintner Jess Jackson has added Murphy-Goode Estate Winery in Geyserville to his growing portfolio of winery holdings.

The founder of Kendall-Jackson winery announced Thursday that he would acquire the Murphy-Goode brand, but not the winery or Murphy family's 300 acres of Alexander Valley vineyards.

The purchase price was not disclosed.

The families of the three men who founded Murphy-Goode in 1985 - Tim Murphy, Dale Goode and Dave Ready - decided to sell because growing the winery past its 140,000 case annual production would have taken a substantial investment, said winery president Jim Murphy.

"We took the business as far as we could take it, and we were looking for someone to take it to the next level," said Murphy, who took over as winery president after his father passed away in 2001.

The winery specializes in fume blanc, chardonnay, cabernet sauvignon and zinfandel. The wines range in price from $12.50 to $45.

Founder Dave Ready said Jackson has a high opinion of the wines.

"Jess actually views Murphy-Goode as being a first-class, upper-level luxury brand, and that's how he's going to treat it in his portfolio," Ready said.

The acquisition brings to 28 the number of brands owned by Jackson and his family under the umbrella company Jackson Family Wines, said spokesman George Rose.

"The purchase of Murphy-Goode is a strong fit for the Jackson family portfolio and our expanding sales organization," Jackson said in a news release.

Jackson's distribution arm, Majestic Fine Wines, began distributing Murphy-Goode wines in March, and one thing led to another, Murphy said.

"It was a natural progression," Murphy said. "They were interested and we were interested and eventually we met on terms."

Industry experts estimated the deal at between $20 million and $25 million.

The winery has remained around 140,000 cases for the past several years as increasing consolidation among distributors has made it tougher for small to medium sized wineries to grow, Ready said.

Much of the growth in the wine industry in recent years has come from corporate-owned retail chains like supermarkets and restaurants, and those accounts are increasingly dominated by larger wineries, Ready said.

"Their expectations are very different than the good wine shops of, say, Santa Rosa or San Francisco," Ready said.

A friend once likened the winery's position in the market to "dancing through the toes of elephants," and Ready said that kind of agility is difficult to sustain.

The staff of about 18 people will remain with the winery, including several family members. The winery facility will be leased back to Jackson Family Wines, and the Murphy family's vineyards will remain under long-term contract to Jackson.

The deal was a closely kept secret, and Ready said the owners were pleased to put it behind them.

"It's been a big day," Ready said. "I'm looking forward here to a little calm after the storm."