Calculating The ROI Of Sustainability At Jackson Family Wines

While many companies have set strategic goals to reduce their carbon footprint and adopt more sustainability measures, very few have yet been able to achieve a positive return-on-investment (ROI) for these types of activities. However, Jackson Family Wines, the 9^th largest winery in the U.S., producing over 6 million cases of wine annually, and with operations in 8 countries, has recently made their sustainability ROI public.

In an online interview, Katie Jackson, 2^nd Generation proprietor and SVP of Corporate Social Responsibility at Jackson Family Wines, shared:

“Since 2015, we have invested over $19 million in our sustainability programs and infrastructure across our wine company,…Due to all these investments, we have realized over $26 million in savings from our renewable energy and efficiency efforts, light-weighting our glass bottles and more – resulting in approximately $4 million return on investment.”

Given that Jackson Family Wines owns more than 40 different wineries globally, including the well-known brands of Kendall-Jackson, La Crema, and Cambria – along with collector brands, such as Verité, La Jota, and Mt. Brave, with price tags ranging from $100 to $450 per bottle – how were they able to achieve this?

Part of the answer lies in the philosophy of founder, Jess Jackson, (Katie Jackson’s father) whose favorite saying was, ‘Take care of the land, and it will take care of you.’ Another large part has to do with their initiative entitled, ‘Rooted for Good,’ that outlines the four major tenants of their sustainability strategy.

Jackson Family Wines’ ‘Rooted for Good’ Sustainability Initiative

Jackson Family Wines (JFW) launched their ‘Rooted for Good’ initiative in 2021, with a goal to cut their carbon footprint in half by 2030 and become climate positive by 2050.

However, headquartered in Sonoma County, JFW was one of the first California wineries to pursue sustainability certifications for both vineyard and winery operations, starting in the mid 2000’s. So by 2015, they had already implemented many energy saving initiatives that have allowed them to achieve a positive ROI. Following are the four tenants they have adopted:

#1) Water Management – For this category, JFW is adopting multiple methods to conserve water, including rain water capture, water recycling, and returning water to local watersheds. They even launched an employee incentive program to encourage saving water, called Water Wise, which created some friendly competition between wineries, and resulted in even more water saving ideas. To date, JFW has saved more than 28 million gallons of water per year at the wineries, and has achieved around $1.7 million in savings for operations costs.

#2) Climate Action & Greenhouse Gas Emissions – A large part of JFW’s positive ROI is derived from investments and savings in solar panels and light-weighting of wine glass bottles. JFW has the largest solar array of any wine corporation in the U.S., with solar panels installed on the roofs of many of their wineries, as well as other renewable energy sources, such as wind turbines and some electric vehicles. Therefore, today more than 30% of their energy is renewable, resulting in financial savings of around $12 million to date, and is the equivalent of taking 1,033 cars off the road every year.

Upon calculating their carbon footprint in 2021, they realized that the weight of wine bottles and packaging makes up 24.4%, and when combined with product transport equals 38.9% (see graph below). Therefore, they have embarked on efforts to light-weight their wine bottles, resulting so far in a 5% reduction in weight for 4 of their wine brands and a 2-3% reduction in emissions. These efforts have allowed them to achieve an estimated savings of $6.5 million.

JFW was also one of the founders of International Wineries for Climate Action (ICWA), along with the Torres Wine Family in Spain. The purpose is to assist other global wineries with a roadmap and strategies to decarbonize the wine sector as soon as possible.

“One of the key ingredients to our success will be continuing our collaborations with organizations, like International Wineries for Climate Action, …(and) working side-by-side with leading experts, scientists, and universities, and our winery peers to implement innovative solutions to these challenges,” Katie Jackson said.

#3) Land Conservation and Farming – with a goal to transition 100% of their estate vineyards to regenerative farming by 2030. JFW has already achieved organic certification for all of their Napa Valley vineyards, and their other estate vineyards are certified sustainable. However, regenerative farming is even more advanced, and calls for low or no-tilling of the soil, so that CO2 gases are not released, along with other organic and sustainable practices such as using cover-crop and composting.

These efforts not only help to lower their carbon footprint and create healthier soils, but some experts believe it results in higher quality wines. Financial returns in the vineyard include grant funding for innovations in vineyard soil and water treatment, which total to around $2 million to date.

#4) Social Responsibility – A key part of sustainability is positive employee and community relations, and JFW has created a goal to build a more diverse, equitable and inclusive (DEI) workforce, while also assisting local communities to thrive. Examples include creating an employee-led task force called the IDEA Alliance to develop inclusive policies, celebrating diverse culture months throughout the year, such as Black History month, and creating internship and volunteer opportunities.

JFW also provides financial support to over 200 local non-profits, and encourages employees to volunteer. Recent figures show that JFW employees have volunteered over 6000 hours per year. Currently the company has around 4000 employees. At this time, they have not calculated the ROI for their social sustainability efforts.

Other savings and financial gains resulting from JFW’s sustainability initiatives include rebates, Low Carbon Fuel Standard Credits, and CA Industry Assistance. Taken all together, they have achieved $26 million in savings to date.

Next Steps for Jackson Family Wines

So what is next for the wine giant? The answer appears to be continued global expansion, as well as a relentless focus on achieving their 2030 and 2050 sustainability goals.

Indeed, Barbara Banke, Chairman and Proprietor of Jackson Family Wines (and Katie Jackson’s mother), recently reported on NBC news that, “Our newest project is to make sparkling wine in the U.K., so we bought a small property. We’re planting vines and we’re going to do pinot noir, chardonnay, and sparkling wines.”

Given that another effect of climate change is the opportunity to plant vineyards in locations that were once too cold to grow high-quality wine grapes, such as the U.K., it appears that JFW is tackling the issue of climate change from a very proactive position. At the same time, they acknowledge that they still have a lot of work to do.

“We are very proud of the progress we’ve made, but also acknowledge we still have a lot of work to do to decarbonize our wine business, transition to regenerative farming, while advancing more diversity, equity, and inclusion within Jackson Family Wines and the larger global wine industry,” concluded Katie Jackson.