Wine Spectator has learned that Constellation Brands has acquired a minority stake in California’s Booker Vineyard, the Paso Robles superstar winery founded by Eric Jensen. The agreement includes an option for Constellation to eventually own a majority of the company, and a plan to distribute Jensen’s Cabernet-focused My Favorite Neighbor brand. Jensen will remain on board as winemaker. No financial details of the arrangement were disclosed.
"The synergy between [Jensen’s] vision for his portfolio and what we’re trying to accomplish with the total business—along with the fact that we just have similar values and think about the opportunities for the future a similar way—is what really made this partnership make sense on both sides," explained Robert Hanson, executive vice president at Constellation Brands and president of its wine and spirits division.
The partnership adds two different brands to Constellation’s portfolio: Booker, a boutique winery with a strong direct-to-consumer sales model, and My Favorite Neighbor, a line of affordable, region-based wines blended from multiple sources that has potential to grow.
Jensen was a broker in real-estate trust sales and a concert and festival promoter in Newport Beach, Calif., before moving to Paso Robles in 2000 to set on a new path as a farmer and winemaker. In 2001 he and his wife, Lisa, purchased a rocky, well-drained property on Paso's west side. He now owns about 100 acres total, 60 under vine, planted to a variety of grapes, including Syrah and Grenache.
In the deal the Jensens will retain about 35 acres, including their home. "That way we’re adjoined, and I’m doing the farming," said Jensen.
Booker takes its name from the property’s original owners, Claude and Dick Booker, who purchased the land in the 1920s and once owned more than 1,000 acres in the area. Jensen’s grapes are considered among the best in the region, and he has sold fruit to Saxum, Linne Calodo and Clos Solène, among others.
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These estate-grown grapes are the basis for the Booker label, which Jensen launched with the 2005 vintage. He produces about 7,000 cases annually. Booker features regularly outstanding bold, rich wines, primarily from Rhône grape varieties. The Booker Oublié (French for "forget it") Paso Robles 2014 earned the No. 10 spot of Wine Spectator’s Top 100 Wines of 2017. Most of the wines are sold direct to Booker’s customers.
"As you know, we’ve been very focused on building our DTC (direct-to-consumer) portfolio," said Hanson. "Ninety percent of sales in DTC are among luxury wines. This investment makes sense because it sits alongside the balance of our fine wine portfolio—Schrader, Mondavi, The Prisoner Wine Company, Mt. Veeder, To Kalon Vineyards, etc."
Earlier this month, Constellation announced the purchase of Empathy, another DTC brand co-founded by media personality Gary Vaynerchuk and his business partners John Troutman and Nate Scherotter.
After founding Booker, Jensen was also interested in showing Paso Robles’ potential with Cabernet Sauvignon. He launched My Favorite Neighbor in 2019 with the 2017 vintage, focusing on grapes grown on the west side of Paso Robles; priced at $80 a bottle, it was intended to compete with cult Cabernets from Napa. A second My Favorite Neighbor bottling, Harvey & Harriet (named for Jensen’s parents) was introduced later at $50 a bottle.
But Jensen realized he made a mistake. "I got out there on sales trips and I realized, $80 is too much money … I needed a new price," he said. "I needed to be accessible to more Americans." He renegotiated with grapegrowers to by-the-acre contracts and lowered the two My Favorite Neighbor bottlings’ prices to $50 and $30, respectively.
Noting that he wanted to make a wine his own parents could afford, Jensen added, "To lower the price to fit in a better total available market, to be accessible for more Americans, I have to be honest, I’m more proud of that than anything I’ve done in the industry."
Constellation will help increase production for My Favorite Neighbor and develop a better presence in the traditional three-tier system—exactly what Jensen wanted. "My desire, my dream, was to go against the grain and create this cult wine," said Jensen. "I knew how to make it, I knew how to farm it, but I needed a well-heeled sales team to help me build it."
Hanson agrees their goals are aligned. "The thing I’ve enjoyed about getting to know [Jensen] is his passion for bringing the discipline, the quality and the precision of winemaking to My Favorite Neighbor and to Harvey & Harriet." The goal is to keep continuity while slowly growing the brand, and continuing to focus on grapes from Paso’s west side for now. Jensen will remain in charge of winemaking.
Constellation’s focus in high-end wine is further cemented with this investment. Their portfolio at one point was filled with value-priced wines. But last year they arranged a $1.7 billion deal to sell off 30 lower-priced wine brands to E. & J. Gallo. The deal was delayed when the U.S. Federal Trade Commission raised competition concerns, but is expected to close this year. The Constellation lineup currently includes Schrader Cellars, Robert Mondavi Winery, The Prisoner Wine Company, Mount Veeder Winery, To Kalon Vineyard Company and Ruffino Estates, among others.
While Constellation has purchased grapes from Paso Robles before, this is their first investment in the area. "It’s the most exciting California region to be in development," said Hanson. "We think there is an opportunity there."