the Sustainability Story at Jackson Family Wines

continued »

WHEN JESS JACKSON left his career

as an attorney to pursue a passion for

winemaking in the early 1980s, little did

he know that his legacy in winemaking

would eventually span multiple decades,

five continents, and more than 30 wineries,

including Kendall-Jackson, La Crema,

Cambria, Stonestreet, Matanzas Creek,

Cardinale and Verite. Today, 32 years

after Jess Jackson crafted his first bottle

of Kendall-Jackson Chardonnay in Lake

County in 1982, the family business he

started, Jackson Family Wines (JFW), has

distinguished itself as one of the world’s

leading luxury wine companies, producing

the highest quality, sustainable wines from

some of the world’s premier vineyard sites.

SELECTED JFW BRANDS: Kendall-JacksonLa CremaCambriaStonestreetMurphy-GoodeMatanzas CreekArrowoodHartfordCardinaleFreemark AbbeyVeriteLa JotaLokoyaWindracerEdmeades Champs de RevesYangarraTenuta di Arceno Chateau Lassegue

A Company with a Long-term Vision From the outset, Jess Jackson envisioned a

wine company that would be family-owned and

multi-generational. Daughters Jenny Jackson

Hartford and Laura Jackson Giron remember

helping to plant the family’s first vineyard and

accompanying their father on trips to deliver

barrels of his first batches of wine. Today,

Hartford’s husband, Don Hartford, is the CEO of

JFW, and Barbara Banke, Jackson’s wife of more

than 25 years, is its Chairman and Proprietor.

Family members work at every level of the

organization, giving the business direction over

both its practices and its values: philanthropy,

community, land stewardship, and, above all,

excellent, artisan-crafted wines.

JFW’s commitment to its wine—produced

with coastal and cool-climate fruit and artisan

craftsmanship—makes it a leader among wine

companies. What is lesser known is that the

company is also a leader in environmentally and

socially responsible business practices, and was

selected as both the 2013 Green Company of

the Year and given special commendation as

the 2014 Ethical Company of the Year by The

Drinks Business, Europe’s leading beverage

industry trade publication. In 2011, JFW was also

recognized for its environmental commitment

by the U.S. Environmental Protection Agency

with a Green Power Leadership Award. Other

organizations recognized that year included

Google, Intel and the City of San Francisco.

Katie Jackson, Banke and Jackson’s oldest

daughter, is a key contributor to the Jackson

Family team, leading the company’s sustainability

and external affairs efforts. She fondly remembers

Jess Jackson’s commitment to integrity in winemaking

and land stewardship. “My father and mother made

decisions according to the long-term success of

the company,” she says. “Our values are rooted in a

sustainable lens that has inspired how we approach

each key decision and remains an essential part of

who we are as winegrowers.”

In addition to the company’s commitment

to quality winemaking and environmental

stewardship, detailed below, JFW also has a

documented history of philanthropic work. From

the beginning, Jackson and Banke made it a

priority to give back to their employees and the

communities in which they do business. Each

year, JFW provides financial support in the form

of in-kind and monetary donations to more than

40 nonprofit organizations in California and

Oregon. Employees of the company are also

encouraged to volunteer at local non-profits.

The company also provides its 1,400 employees

with unique career opportunities such as its

Cultivate and High Impact Leadership programs,

and ongoing professional development in

leadership, language skills and business: in 2013,

nearly every employee completed JFW courses

in these topics, for a combined 10,000 hours of

professional development opportunities.

continued »

The Evolution of an IdeaJackson’s long-term vision for a sustained,

multi-generational winery is tied to the vineyards

themselves. Jackson was an early adopter of healthy

land management practices, and began reducing

the use of toxic pesticides and implementing water-

conserving drip irrigation earlier than many others in

the industry.

Today, this commitment to sustainability is in the

DNA of JFW. The company’s current strategy took

root in 2008 when Jackson and Banke began a

comprehensive, company-wide assessment of

the organization’s environmental impact. The

company developed a multi-pronged approach to

addressing these impacts, based on three primary

tenets: sustaining our land, crafting our wines, and

advancing the field. To meet its goals, the company

has relied on conservation, optimization, and

renewable power generation.

Since beginning its journey, the company has

achieved 3rd party sustainability certifications—

including the Certified California Sustainable

Winegrowing (CCSW) and Sustainability in Practice

(SIP) vineyard programs—for all of its vineyards and

wineries, an unusual achievement among

wine companies.

To date, the company has saved about $15 million

through its energy efficiency initiatives alone, and

has considerably reduced the energy and water

required to produce a single gallon of wine. Despite

growth during this same period, the company is using

15% less electricity overall compared to its 2008

baseline. These savings have allowed the winery to

expand its initial sustainability efforts even further,

making the company a role model for other

value-driven organizations.

Sustainability in Action at JFWWith a number of sustainability initiatives already

implemented over the years, the Jackson family knew

that it was time to build on its long-term perspective

and foundation by developing greater environmental

controls to reduce the company’s operational

footprint. This in turn would allow the organization

to address current and future resource constraints.

Three primary impact areas were identified: energy,

water, and land use.

JFW SUSTAINABILITY AT-A-GLANCE

• Kendall-Jackson established in 1982 in Lake County, California

• Member, EPA’s Green Power Leadership Club and past recipient of the Green Power Leadership Award

• Saved $15 million to date through energy efficiency initiatives

• Uses only four gallons of water to produce a gallon of wine, 2x more efficient than the industry average

• Recycles or reuses 98% of all materials used on bottling line

• Funded Jess S. Jackson Sustainable Winery Building at University of California Davis

continued »

EnergyJFW has taken a two-fold approach to energy

management: increasing its consumption of

clean power (specifically solar and wind) while

simultaneously improving operational and energy

efficiency at all levels of the organization. After

taking stock of its total energy footprint—and

associated costs—in 2008, the company began to

measure energy as a key performance indicator

directly tied to the bottom line. Since that time,

JFW has reduced its energy consumption by

5.3 million kilowatt-hours (kWh) annually, the

equivalent of removing approximately 3,850

passenger vehicles from the roads. In total, the

company has reduced its energy consumption by

64% at its wineries and reduced greenhouse gas

(GHG) emissions by 51% organization-wide.

Energy Efficiency at JFW

The company’s initial step to curb energy

consumption required the overhaul of existing

systems and machinery in order to increase

operational efficiency. An early initiative was

retrofitting lighting across 12 winery buildings

and warehouses. Working with engineers from

GE, the company selected super-efficient

fluorescent lamps and ballasts for the massive

project. Over a six-month period, Jackson

Family Wines replaced the existing 400-watt

metal halide fixtures with 4,000 high efficiency

lamps, producing an annual energy savings of

more than 1.6 million kWh. Through this project

alone, JFW was able to reduce its emissions by

the equivalent of the carbon sequestered by

904 acres of U.S forests.

The next step was to retrofit the company’s

existing HVAC system, replacing 104 air handling

unit motors with variable speed drives, and

upgrade the company’s refrigeration and

water pumps, cooling towers, condensers, and

compressors at its six largest wineries. This

enabled these wineries to operate more efficiently

while reducing energy intensity and maintaining

rigid quality controls.

In 2009, the company began participating

in Pacific Gas & Electric’s Demand Response

program, in which large energy consumers

commit to reducing electricity consumption on

high-demand days to reduce stress on the grid.

THREE STEPS TO A SMALLER CARBON FOOTPRINT AT JFW

1. Improve efficiency by reducing energy consumption.

2. Invest directly in renewables through onsite installation.

3. Utilize green power in the form of renewable energy credits (RECs) to offset the impact of emissions from purchased electricity that cannot be reduced or avoided.

continued »

photo credit: SunWorks

Clean Power Commitment at JFWAfter completing the 2008 energy footprint

audit, the JFW team knew that they would need

to invest in clean power if they were to reduce

the company’s greenhouse gas emissions beyond

efficiency measures. In 2009, the company began

purchasing renewable energy credits (RECs),

and in 2011, was recognized for its commitments

by the U.S. Environmental Protection Agency

with a Green Power Leadership Award. Other

organizations recognized that year included

Google, Intel and the City of San Francisco. In

2012, JFW became the first wine company, and

one of the select few companies in the United

States, to buy green power to offset 100% of

its employees’ home electricity use as well as

100% of the company’s energy use, with total

REC purchases equaling 130% of the company’s

energy usage.

RECs are the established method for tracking

and purchasing clean power credits in North

America. They are generated in a one-to-one ratio

with the quantity of energy from a clean power

project, such as a wind farm, that is delivered to

the electrical grid. RECs represent the “proof”

that clean power has been generated and added

to the overall electricity mix, and companies

that utilize RECs, like JFW, are able to claim the

environmental benefits of that clean power. The

RECs purchased by JFW are certified by Green-e

Energy, the nation’s leading 3rd party verifier of

RECs and other clean power products. JFW buys

100% certified wind energy.

JFW Invests in Onsite RenewablesEnergy efficiency and the purchase of clean

power RECs were important initial efforts by JFW

to curb its carbon footprint, but the company

has since begun investing in onsite renewables

in order to obtain clean power directly. These

projects have been funded by the nearly $15M

in energy savings that the company has realized

as a result of its efficiency initiatives, and the

company has 7 megawatts (MW) of onsite solar

in development at nine of its California wineries,

which will make JFW the wine industry’s largest

solar energy generator by the end of 2015.

To date, JFW has built one of the largest rooftop

solar and hot water cogeneration facilities in

the nation, saving the company $30,000 and

700,000 kWh of electricity annually, equivalent to

44 average American homes’ energy use for one

year. The system provides electricity for lighting

and cooling systems as well as the hot water

required in the winemaking process.

The company has also built a 280 kilowatt

solar system at its Carneros Hills Winery, and a 162

kilowatt solar system at its Hartford Family Winery.

These onsite initiatives will allow JFW to source

approximately 60% of its electricity from onsite

resources, company-wide, which is the equivalent

to offsetting the electricity use of 1400

California homes.

HUGH REIMERS JFW’s Chief Operating Officer

Our onsite renewable and energy efficiency initiatives allow us to reduce our utility bills as well as demand for grid-sourced electricity.We’re hopeful that we may even be able to take a winery off the grid entirely someday.

continued »

WaterWater management is a key initiative for any

California business, but for JFW, it has become

one of the focal points of their sustainability

program. The company understands the critical

importance of water to winemaking, and also

recognizes that its finished product is only as

good as its ingredients; water plays a critical role

in the health of the family’s vineyards and the

grapes they produce.

Each year, JFW’s water conservation strategies

save nine million gallons of water, the equivalent

of 180,000 bathtubs full. The company has also

reduced its winery water consumption from its

2008 baseline by 49%. Only four gallons of water

are used for every gallon of wine JFW produces,

which is 2 times more efficient than the

industry average.

A few of JFW’s winery water conservation and

reuse initiatives include:

• Employing automated barrel line recycling

units that reclaim and clean barrel wash

water three times before the water is treated.

These recycling units are the first of their

kind, and JFW partnered with the Tom Beard

Company to develop them in tandem. In

addition, the process uses high-pressure

barrel washers that use 45% less hot water

and 40% less water overall.

• Developing a water recycling system that

reuses caustic cleaning solution for tank

and mobile tanker washing. JFW outfitted

3 portable tanks that hold caustic cleaning

solution and recycle it from one wine tank to

the next during the cleaning process, without

having to dump water down the drain. The

caustic solution is pH balanced as needed.

• Treating and reusing winery process water

for vineyard irrigation to close the loop.

The company has reduced its winery water consumption from its 2008 baseline by 49%.

continued »

Vineyard Water ConservationOne of JFW’s primary methods of managing

vineyard water use is via conservation. The

company employs various technologies to identify

optimum watering periods for individual vineyard

blocks. These tools include an extensive drip

irrigation and moisture-monitoring system that

use soil probes and leaf porometers to measure

the actual water content of the soil and vineyards;

stations installed at multiple vineyards that gather

evapotranspiration data and use barometric

monitoring programs to analyze weather

conditions; and weather-linked irrigation systems

that automatically update irrigation levels. Taken

together, these technologies help to conserve

over 2 million gallons of water each year, prevent

overwatering, and concentrate the juice in the

grape, leading to a higher-quality wine.

“Vine stress (lack of available water) has been

linked to improved wine quality,” said Graham

Weerts, Winemaster at Jackson Family Wines.

“We are interested in imposing vine stress at

critical points in the growing year. Our use of

technology helps us to ensure that we are limiting

water at those critical times. By not over-watering,

we are improving wine quality and conserving a

valuable resource.”

In the late 1990s, Jess Jackson embarked upon

a program of constructing off-stream reservoirs

to capture and store water during high periods

of runoff for use later in the growing season.

“Reservoirs are very costly, but to protect fisheries

and other aquatic functions, we build them

with an eye toward minimal impact on other

resources,” according to Katie Jackson. “We’ve

been successful in the construction of reservoirs

to reduce environmental impacts and are working

with California agriculture groups to modify rules

on water storage, and develop a more adaptive

policy in connection with climate change goals.”

Additional vineyard water conservation

initiatives at JFW include:

• Applying water and plant nutrients

simultaneously during irrigation events to

increase efficiency.

• Investing in more than 100 new wind

machines to combat frost protection to save

water. Traditionally, water is used to prevent

the vines from freezing during bud break

as the grape growth cycle begins in winter.

The wind machines break up inversion layers,

bringing cold air up and out of the vineyards and

reducing the need for water to protect crops.

• A pilot project that measures the level of sap

flow activity through the vine to determine

when to water. This allows the plant to dictate

when it is thirsty and has resulted in an

increase in grape quality as well as a decrease

in water usage on the test block compared to

the control block.

• Another pilot project that uses a sophisticated

low-pressure geotextile fiber system for

sub-surface irrigation. The system reduces

evapotranspiration from traditional drip

irrigation and also spreads moisture across

a larger sub-surface area to reduce erosion

and encourage root growth. Expected

water savings from this trial are 30%+ versus

traditional drip irrigation.

GRAHAM WEERTS Winemaster at JFW

Our use of technology helps us to ensure that we are limiting water at those critical times. By not over-watering, we are improving wine quality and conserving a valuable resource.

continued »

Land UseLand stewardship has been a core value

at JFW from the beginning. Founder Jess

Jackson recognized that the quality of his wines

could only be as good as the quality of their

ingredients. That value of quality has been a

cornerstone of JFW for more than 30 years,

and has been the beacon that has helped the

company implement its progressive land

use initiatives.

Soil Management

Vineyards are a long-term investment, with plants

remaining in the ground for 25-30 years, or

even longer. Since the crops cannot be rotated,

JFW uses sophisticated methods to naturally

enhance soil, control erosion, and maintain a

healthy ecosystem. JFW intentionally designs its

vineyards to mitigate their environmental impact

as much as possible.

Native cover crops are used between rows to

fix nitrogen in order to aid soil regeneration and

erosion control. The cover crops also provide

habitat for beneficial predatory insects, which

minimizes the use of pesticides. The company

uses a pinpoint system to monitor and treat only

the areas in which a pest is present, rather than

spray entire vineyards, to minimize environmental

toxicity. Natural soil enhancements are also

employed to improve soil quality.

The company has also implemented extensive

drainage systems throughout its vineyards to

prevent soil erosion, and plant tissue analysis

is conducted to determine minimum fertilizer

requirements for each vineyard.

Biodiversity

JFW intentionally leaves two-thirds of its acreage

in its native state, using only one-third for

grape cultivation. The vineyards themselves are

tucked into pockets of trees and include riparian

corridors where falcons and owls naturally

control grape-eating birds and other pests,

and native species are encouraged to roam

unimpeded. Healthy ecosystems are encouraged,

and the company looks at how it can implement

conservation projects at each vineyard estate

to repair and enhance natural habitats, such

as stream restoration, endangered species

protection, and planting of native vegetation.

To date, the company has planted more than

5,500 trees.

DID YOU KNOW?

All JFW vineyards and wineries are certified sustainable by CCSW. To achieve this certification, sustainability procedures across all operations must be verified by a 3rd party auditor against a checklist of 227 best management practices, with a focus on continual process improvement.

continued »

Additional InitiativesAlthough energy, water, and land management

make up the core of JFW’s sustainability strategy, the

company has initiatives in several additional areas

including waste management, sustainable sourcing,

green building, and sustainable winemaking.

Waste Management

JFW has instituted a waste diversion program in

partnership with local recycling centers that allows

the company to recycle or reuse 98% of all materials

used on its bottling line. Recycled materials include

glass bottles, plastic wrap, and cardboard, while the

company also re-uses other materials, like pallets.

The company has also taken an innovative approach

to the repurposing of organic waste. Proprietor

Barbara Banke co-founded WholeVine, which has

developed innovative uses for grape waste in the

form of culinary products including gluten-free

flours, cookies, crackers, and grapeseed oil. Profits

from this company are donated to charity. Any grape

byproducts that cannot be reused by WholeVine

are composted.

Sustainable Sourcing

As part of its commitment to the highest quality wine,

JFW ages its wines in oak barrels, which are sourced

from a French stave mill. The family has ownership

in the mill; through their financial support, the local

economy has been revitalized and local artisanship

to produce the handcrafted barrels promoted. All the

oak used in the manufacture of the barrels is certified

by the Programme for the Endorsement of Forest

Certification (PEFC), the leading agency of its kind.

Additional initiatives for sustainable sourcing for

the company include an Environmentally Preferred

Purchasing program for office supplies and paying

a price premium for grower partners who provide

certified sustainable grapes.

JFW SUSTAINABILITY BY-THE-NUMBERS

• $15 million: bottom line utility savings to date from energy efficiency initiatives

• 15%: overall reduction in energy consumption from 2008 baseline

• 51%: volume of GHGs reduced organization-wide per gallon of wine produced

• 4,000: number of halide fixtures replaced with high-efficiency lamps

• 41,276,255: annual green power usage (in kWh)

• 7: MW of onsite solar in development

• 11 million: gallons of water conserved annually

• 66%: acreage left in native state

• 5,500: number of trees planted on vineyard lands to date

• 98%: materials recycled or returned on bottling line

continued »

Green Building

The commitment to sustainability at JFW

extends to its buildings, and the company has

been involved in the construction of several

LEED (Leadership in Energy & Environmental

Design)-certified buildings.

The company built a state-of-the-art wine

storage and distribution facility. This 650,000 sq.

ft. building represents a new standard for green

building practices in northern California’s wine

country. It was the first refrigerated warehouse

in the nation to achieve LEED Gold certification.

The building is 38% more energy efficient than

a standard distribution center, saving more

than two million kilowatt hours of electricity

annually. It includes an automated motion

detection lighting system, a non-chemical water

treatment system, and a storm water detention

and filtering system. 85% of the waste generated

in the construction of the building was recycled

and the building contains low volatile organic

compound (VOC) paint, glues, and sealants.

JFW also built the nation’s first standalone LEED

Gold tasting room, the Murphy-Goode tasting

room in Healdsburg, California.

Sustainable Wine Making

JFW is committed to educating the next

generation of winemakers in sustainable

practices. To that end, JFW was instrumental

in the construction of the Jess S. Jackson

Sustainable Winery Building at the University

of California Davis (UCD). To date, the Jackson

family has donated nearly $4 million towards

developing this winery, which is a cutting-

edge example of sustainable winemaking. It is

powered by energy and water captured onsite

with a goal of becoming carbon neutral. It

contains nine different areas where sustainable

wine making technologies can be tested, and

includes a rain water capture system, a clean-in-

place system, and an onsite hydrogen fuel cell.

The winery demonstrates to UCD students best-

in-class commercial technologies in sustainable

wine making and the building provides a place

for students to test emerging technologies in a

realistic setting.

JFW consulted with UCD on the LEED features

of the new winery and provided financial support

through several grants. This partnership enabled

the university to achieve its goal: the Jess S.

Jackson Sustainable Winery is the first LEED

Platinum certified winery in the world and the

highest scoring LEED Platinum building at any

university. The winery is the most visited building

on the UCD campus.

KATIE JACKSON Director of External Affairs & Sustainability and Family Member

continued »

We worked with Dr. Roger Boulton at UCD, who envisioned a net zero winery that would allow the university to test game-changing wine-making technology. We’re very proud to have helped make that happen.

A Sustainable Future at JFWFuture-focused, multi-generational thinking

is what fuels sustainability and quality at JFW,

and the company has no plans to slow down its

commitments to living its values.

The company is exploring new technologies

including microturbines, additional onsite

electric vehicle chargers at its tasting rooms,

and an integrated energy management system

that will tie all energy efficiency gains made to

date and orchestrate energy demand in a way

that will allow cellar and vineyard managers to

monitor energy use in real-time.

In the next five years, the company plans to

continue to shrink its overall environmental

footprint, concentrating on reducing emissions

and water consumption, and increasing the

transparency and sustainability of its supply

chain. The company also intends to publish its

first sustainability report in 2015, complete with

a set of 5-year goals in five different impact

areas, including energy & GHG’s, water & land

conservation, supply chain & transportation,

community, and waste diversion.

“My father’s legacy is a world-class wine

company positioned not only to meet the

challenges of a resource constrained world, but

to lead the industry in sustainable practices,”

says Katie Jackson. “Our strategy will let us

continue to make great wine for years to come

and provide our customers with the quality

they have come to expect.”

JFW Sustainability Mission Statement

We invest in the health of our lands, quality of our wines, and well-being of our people and communities to cultivate a thriving future for generations to come.

www.jacksonfamilywines.com

© 2014 Jackson Family Wines, Santa Rosa, CA

The company developed a multi-pronged approach to addressing its impacts, based on three primary tenets: · sustaining our land · crafting our wines · advancing the field

JFW Sustainability Pillars