Sustainable giants – How Bokisch and Fetzer Vineyards reap mutual benefits

Certified (LODI RULES) Sustainable as well as CCOF Organic sign at Bokisch Ranches' Terra Alta Vineyard in Lodi's Clements Hills AVA

While we naturally talk a lot about smaller production Lodi based wineries leading the way with wines focused more and more on sensory qualities unique to the growing region, the reality remains that the vast majority of Lodi grapes are grown for multi-million-case wineries that have originated outside the region. Companies such as E. & J. Gallo, Constellation Brands, Trinchero Family Estates, Treasury Wine Estates, The Wine Group, or Bronco Wine Company that churn out most of the value oriented brands (sold mostly as generalized "California" wines) found on America’s retail shelves.

For all of that, there are some Lodi growery/big winery relationships that seem to have gelled into a mutually beneficial business model personifying one of the ideals that has come to be identified with the Lodi Viticultural Area: namely, the pursuit of an accountable sustainability, entailing a balance of environmental, cultural or social, and economic goals, leading to consistent levels of quality and business success.

One of those ideal one-on-one relationships involves Lodi’s Bokisch Vineyards – established as a wine grape supplier in the mid-1990s, and as a winery in 2001 – and Mendocino County’s Fetzer Vineyards, which recently celebrated its 50th anniversary as a winery, originally founded by Bernard “Barney” Fetzer back in 1968.

The Fetzer family at their home in Redwood Valley, Mendocino County, circa-1983 (image courtesy of fetzer.com)

Barney and his wife Kathleen were fruitful in both their business and family life, raising 11 children to be successful winegrowers and wine producers. In Kathleen’s book, Kathleen’s Vineyard, second son Jim Fetzer is quoted to say: “We farmed organically in the beginning, and there was an abundance of insects, songbirds and other life in the fields. As we moved to the chemical world of farming, the insects, singing birds, and other life quickly vanished, as did the quality of the fruit.”

And so the Fetzer family made a decisive change. Continued Fetzer, “In the mid-1980s, we changed our farming systems back to organic ways of building life in the soil and encouraging diversity in the field... The soils have come to life again, and the fruit has shown to produce a much higher-quality wine. We haven’t looked back since.”

By 1992 – the year after some 600 Lodi growers came together to establish the Lodi Winegrape Commission (originally called the Lodi-Woodbridge Winegrape Commission) – Fetzer Vineyards had become a 2.1-million-case winery, and the Fetzer family was ready to sell their brand to corporate interests. By that time, the family had launched a 100% organic sub-label called Bonterra, with much of the grape sourcing for this project coming from 1,200 or so acres of CCOF certified organic grapes farmed by members of the Fetzer family in Mendocino.

In order to expand what had become a two-brand company – consisting of the larger Fetzer Vineyards portfolio and the specialty, organic-or-Biodynamic-grapes-only Bonterra – the new owner, Brown-Forman Corp. (at the time known mostly as the owner of Jack Daniels Tennessee Whiskey), began to explore regions outside of Mendocino County for its grapes.

Markus & Liz Bokisch with a Terra Alta Vineyard harvest in the Clements Hills-Lodi AVA

Partnership based on shared sustainable DNA

Flash-forward to today, Fetzer Vineyards’ yearly production now hovers near a comfortable 3-million-case level. Recently Fetzer’s Director of Grower Relations Ben Byczynski took the time to explain: “While we are still a Mendocino-based winery, Fetzer sources grapes from key growing regions throughout the state, and more and more of it from regions like Lodi.”

After over 50 years the company’s brand-defining protocols still call for either organic or sustainably grown grapes. Therefore, according to Byczynski, Fetzer has looked to Lodi precisely because of the region’s groundbreaking, industry-leading development of LODI RULES for Sustainable Winegrowing.

Says Byczynski, “While Bonterra is definitely defined by organic practices, Fetzer remains a bigger piece of the puzzle for us, and that brand has pushed further towards sustainability. Historically, a lot of our core values go back to the organic winegrowing we started with in Mendocino, but you can now say that it is sustainable thinking that defines the company as a whole.” Factors such as becoming the world’s largest B-Corp certified winery (in 2015) – a global certification for businesses successfully establishing holistic programs while setting standards for social and environmental responsibility – underline the company’s full-fledged immersion in sustainable policies.

Fetzer Vineyards Director of Grower Relations Ben Byczynski

Towards that end, Byczynski is not shy about pointing to Lodi’s Bokisch Vineyards, and its owner/grower Markus Bokisch, as a key component. “Markus Bokisch happens to be one of our pillars,” says Byczynski, “although there are other important growers in the area. Markus is one of those players we want to have a long-term relationship with – someone who’s going to be there for the long haul.”

Adds Byczynski, “Markus is known for farming at a very high level, but there is an added benefit in the fact that he has his own winery and so he understands winemaking, and grape growing for quality in resulting wines. But as with other Lodi growers, the key thing is his dedication to LODI RULES and sustainability, which aligns with our company goals, beliefs, and philosophy.”

That philosophy, says Byczynski, can be described as simply “utilizing resources as necessary... looking at ways that we can be more friendly to the earth and use only what’s needed. In practice, for instance, you don’t go out and spray an entire vineyard just because you have just one area where you’ve found a pest infestation. Instead, you monitor that carefully and look for ways to use an Integrated Pest Management practice. For us, it’s just about being very judicious and pro-active as a farmer. Being in your field, and understanding your field. Just being a better farmer, which for our company means being sustainable, and applying a lot of organics. This has been in Fetzer’s DNA from the start. Why? Because it’s the right way to go.”

Opening pages of recent Wine Spectator Magazine article on Lodi, showing Markus Bokisch in Bokisch Vineyards' Terra Alta Vineyard (image courtesy of winespectator.com)

Markus Bokisch on sustainable business models and contracts

In light of the high praise readily volunteered by Fetzer Vineyards, we recently sat down with Markus Bokisch and asked him to expand on Bokisch Vineyards’ successful relationship with Fetzer Vineyards, and exactly what makes it tick.

According to Mr. Bokisch:

“Our work with Fetzer began when a fellow named Robert Levine was the Director of Grower Relations for Brown-Forman, back around 2005, 2006. My motivation to farm for Fetzer was because of their focus on sustainability, and that really interested me as a Lodi area grower. I thought that this could help take the Lodi region to another level.

“Then Fetzer went through a second major transition, being sold again in 2011. Very fortunately, it was picked up by the Viña Concha y Toro brand out of Chile. This was in my estimation a great opportunity for Fetzer. At that point, Fetzer certainly had a lot of reorganization to do to redefine itself in the U.S. market. Giancarlo Bianchetti, a Chilean of Italian background, who is the general manager there, is a great guy, and he’s still there. Giancarlo is the consummate manager; very nimble with sales and marketing, and good at building teams and teamwork

“I have to add that one of the biggest nuts to crack when Fetzer was under Brown-Forman was a lack of comfort with fruit sourced outside of the North Coast (i.e. encompassing vineyards in Mendocino, Lake, Sonoma and Napa Counties). And when Fetzer was ready to come back into the market with a renewed focus on sustainability and organics, and an understanding of what the American market was looking for, they came back into Lodi and very aggressively tried to build relationships with key growers in this area. Now there is a lot of attention, time and energy spent on their understanding of Lodi. Consequently there’s a great understanding of how good Lodi is for their brand expansion – a total different outlook from before.

The rolling clay hillsides of Lodi's Borden Ranch AVA that have attracted major North Coast wineries such as Fetzer

“Just to give you an example of their commitment to sustainability, during that period of time when they were first acquired by Concha y Toro, they asked me to give three separate tours to their Chilean team consisting mostly of vineyard managers. At the company’s expense they flew up here from all their vineyard operations. I think I was a natural for them because I spoke Spanish, and because we’re very integrated into LODI RULES and Lodi in general. They were just like sponges, taking in all the information we could share with them, which they applied to what they were doing Chile. They also brought in their viticulturist to Lodi on several occasions to participate in conferences we had internally here at Bokisch, and to share in sustainable as well as organic farming practices.

“Fetzer under Concha y Toro has taken on a very pro-active approach to their grower relationships, and certainly with me. Aside from renewing and increasing their involvement in sustainability, one thing you should know about Fetzer is that once they were very much a North Coast driven brand. Now they’ve really embraced the strength they find in Lodi to bolster Fetzer as more of a California brand. What’s nice about it is that they are coming to Lodi and buying all kinds of varieties. They’re very interested in Lodi grown Chardonnay, Sauvignon blanc, Cabernet Sauvignon, plus a whole complement of spice rack varieties that can help them build the flavor profiles in their wines.

“By no means is Fetzer sourcing grapes only from Lodi. They source out of Clarksburg, the South Valley (i.e. Central Valley regions ranging from Modesto all the way down to Fresno and Bakersfield), pretty much in any area they can get good grapes. However, I think they’re particularly interested in Lodi because of the sustainability factor, and how much that means to Lodi growers in general.

“I think in Lodi, it’s certainly true over the last 20 years that there is a much greater sophistication of farming practices which has resonated really well with Fetzer’s previous experience in the North Coast. Whereas when they go to the South Valley they’re sourcing fruit that obviously helps them lower their cost of goods, in Lodi they get a very good QPR (i.e. quality-price-ratio).

Cobbled Redding Series clay soil in Bokisch Vineyards' Vista Luna Vineyard (Borden Ranch-Lodi AVA)

 “I think as their program has grown and matured under the Chilean relationship, they have made it very clear from the start that they were not looking for an American conduit to distribution of Chilean wines. They were looking for having a foothold in the American market with American wine; and they’ve been very true to their word.

“They’ve also been, amongst all the wineries I deal with, one of the most partnered relationships that I enjoy. There is no antagonism in our relationship. It’s ‘how can we work together for a common good.’ It’s sustainable for both parties.

“Put that all together with their focus on sustainability, it doesn’t surprise me that the trajectory that they’re following is to keep an eye on Lodi as their primary source. In the future, like any large endeavor they will probably need to buy from different areas, but it doesn’t surprise me that Lodi will become increasingly more important in their sourcing.

“I think they’ve done a couple of other things that are exciting. 90% of my relationship is really with Bonterra, their brand that is defined by organics. The prism through which I look at my relationship is through that.

“What Fetzer as a company is looking for is a combination of sustainable, transitional to organic, and organic grapes. So everything that I farm for Fetzer is certified LODI RULES (for Sustainable Winegrowing). And everything that’s transitional organic remains certified LODI RULES. Then anything that ultimately goes into their organic program becomes slated for Bonterra, without much crossover.

“And they’re very engaged in the vineyards. There isn’t a week that doesn’t go by when our Fetzer Grower Relations Manager, Elizabeth Dickson, doesn’t say, hey, what about this, or have you thought about that. They are really committed to having representation in the Northern Interior – something I can’t say that about many wineries.

Bokisch Vineyards' Primitivo/Zinfandel block in Vista Luna Vineyard (Borden Ranch-Lodi AVA)

“Bokisch Ranches is currently supplying the Bonterra and Fetzer brands with over 200 acres of grapes dedicated to those programs. Off the top of my head, this includes

• 60 acres of Hidden Oaks Vineyard Cabernet Sauvignon in the Clements Hills AVA
• 55 acres of Fisher Vineyard Chardonnay, also in Clements Hills
• 28 acres of William-Marie Vineyard Chardonnay in Clements Hills
• 36 acres of Vista Luna Vineyard Chardonnay in the Borden Ranch AVA
• 15 acres of Primitivo from Vista Luna Vineyard
• 20 acres of Vista Luna Vineyard Petite Sirah
• 20 acres of Pinot noir out of Clarksburg

“All these vineyards are certified sustainable except for the one in Clarksburg, but only because we just recently took over this vineyard and it’s still in the process of becoming certified.

“Grapes are sold by the ton, and the pricing is negotiated for the program set for each vineyard. It’s actually a dialogue. We sit down and determine financially what each of us need. They’re tough negotiators, but the nice thing is that they negotiate, as opposed to many wineries who say take-it-or-leave-it. We’re negotiating a price, discussing about what every vineyard yields historically and in terms of what kind of return of investment that we need. It’s give and take. If they say that maybe a price has to go down then we might say that tonnage must go up x amount. The important thing is that it is a negotiation, which keeps it from getting antagonistic. The bottom line of this kind of negotiation is that we are both partners coming up with a satisfactory agreement, working for both sides.

“One of the things that we’ve done is educate the winery to the current reality of labor, or lack of labor, the regulatory environment, whatever it may be that determines the cost of farming. What kind of profit do I need to build into that cost of farming to stay in farming? How does that relate to the price that’s being offered? The nice thing is that they understand this as a business. Plus, while there are all these levels, if I ever wanted to pick up the phone to get ahold of Giancarlo, he answers the phone. There is a strong sense of access all the way up their chain of command. For a company that size, that’s really impressive.

“Does Fetzer actually require sustainable certification in their contracts? That’s interesting, but the answer is no. With LODI RULES, they’re very excited about it. They’re promoters of the program, but it hasn’t really been a part of negotiation as to whether it’s absolutely required.

Sheep "mowing" in Bokisch Vineyards' Terra Alta Vineyard

“One thing that I have been able to negotiate with Fetzer that is perhaps just as significant for me, is that they are one of the first wineries that came to understand that if they were to buy grapes from Bokisch they would be building a price escalator into the contracts. So what does that mean? It means that the cost of farming is going up, particularly with increased labor, and this is what is legislated into the future so that the contract has a line item that basically states that price per ton is going to go up on a percentage every year to meet that same percentage increase of farming costs. And they did that not only with the price per ton, but with the hauling allowance that they gave us, which is really where I spent a lot of time negotiating with them over the past few years. The idea is to apply an economic sustainability into contracts that meets our requirements going into the future.

“The next step is to say, okay, we now want to move you in the direction where you are willing to pay more for grapes because they are certified sustainable. We’ve already done this with the organics, which they’re willing to pay a premium for. The next step is to talk about LODI RULES in the same way.

“However, there isn’t a line item for this, like $25 a ton for every ton that’s been farmed under LODI RULES certification, but in a sense I am already getting that because they are paying me above market average, which includes the assumption that I am doing things beyond and above the average, such as things like LODI RULES.

“The other thing that’s interesting to me is that even though the whole Fetzer thing started over 50 years ago, they have continued to move closer and closer to a business model dating back to pre-Brown-Forman days, which is embracing sustainability. And the more they keep moving in this direction, the more it bodes well for us in Lodi!”

Harvest dawn in Bokisch Vineyards' Vista Luna Vineyard