Multi-millionaire Bill Foley’s North Bay winery acquisitions (so far) include Chalk Hill, Merus, Kuleto and Sebastiani.
Growth mode
Foley’s interest in the Santa Rita Hills deepened with the 2007 acquisition of Ashley’s Vineyard, one of Fess Parker’s plantings, which he renamed Rancho Las Hermanas. It’s a vineyard that’s famously provided fruit both to Lincourt and now Foley Estate under the Two Sisters label, as well as to cult brands such as Brewer-Clifton, Samsara and Tantara.
Early in 2008, Foley found his way into Cabernet Sauvignon with the purchase of Merus, a much-coveted, small-production Napa Valley brand, in addition to the 3,500-case Venge production facility and property in Calistoga, where Merus is now made. Meanwhile, back in Santa Barbara County, Foley gained attention for acquiring Firestone Vineyard, a big draw with visitors to the area, with wines that are widely distributed and affordably priced.
“I’ve tried to be opportunistic about my acquisitions,” Foley admits. “But particularly with Chalk Hill—it’s an icon, a great property, a brand that’s well-established. It’s respected and has had great wines for years and years.”
Foley Family Wines is now run from the Chalk Hill estate, where Foley himself maintains an office and lives part of the time. “We’re heavily invested down in Santa Barbara County,” he says, “but the reality is, the heart and soul of the American wine business is Napa and Sonoma counties.
“When my wife and I were thinking about getting more heavily involved in the wine business beginning in 2007 and 2008— [when] I bought Merus and Sebastiani—we said, ‘This is where it’s really happening.”
“I need a Napa,” Foley says. “A larger, Napa pull brand, something on Silverado Trail or Highway 29 that’s a respected brand I can use as my launching point for Merus and Kuleto, which are smaller, high-end but remote brands. I’m waiting for that one.”
He doesn’t rule out others in the meantime, of course, adding, “Maybe the next right situation’s going to be Oregon for all I know, but it’s going to be a brand that’s going to pull other brands along.”
Whatever he’s acquired, Foley says, it’s important his brands have pull within the distribution system.
“I’m trying to build the Lincourt and Foley brands, and you’re kind of pushing rather than having the wines pulled through distribution,” he explains. “I need pull brands as opposed to push brands. That’s why I got interested in Sebastiani. It was an established brand, an established name and it hit the price points I was looking for. I felt I could do something, improve the wines and do a little better with it—and [with] Chalk Hill, same sort of idea.”
Long days
Meanwhile, Foley remains involved at Fidelity, the nation’s leading provider of title insurance, specialty insurance and claims management services, a business that’s done well even in the recent economic downturn. In 2009, it posted a 66 percent profit.
Based in Jacksonville, Florida, Fidelity—under Foley’s leadership as CEO between 1984 and 2007—was named one of the Best Managed Companies in the United States by Forbes magazine and also earned America’s Most Admired Companies honors from Fortune magazine multiple times. Stepping back from a day-to-day management role to further focus on his wine interests, Foley now serves as chairman of the board for Fidelity National Financial Inc., number 366 on Fortune’s list of America’s largest companies, as well as its sister company, Fidelity National Information Services, Inc.
“I’m a year away from having the wine business be 75 percent of my time,” he says. “I have some other stuff, some private investments I fool around with, [but] that’s my goal: within a year, to have wine be 75 percent [of my business focus]. Of course, for me, that’s about 12 hours a day. It’s a great business, it’s fun.”
Foley’s time at Fidelity has had its rewards. A self-made man who grew Fidelity through keen business savvy and wise acquisitions, in 2004, Foley was listed fourth on Forbes’ list of CEO compensation with a total annual salary, bonus, stock gains and other of $179.56 million. His annual compensation was reported by Businessweek to be $195 million in 2009.
Beginnings
Foley was born in Austin, Texas, in 1944. He graduated from the United States Military Academy at West Point in 1967 with a degree in engineering, then served in the Air Force where he attained the rank of captain and oversaw defense contracts at Boeing in Seattle.
“My other businesses I’ve been involved in since I stopped practicing law, I had to learn myself,” he says. “I had to make a bunch of mistakes, correct the mistakes… and then make some more mistakes.”
He adds that he’s getting closer to figuring out the wine industry. “I still have a way to go, and if I see something that’s not working, I try to correct it. It’s self-taught. I’m teaching myself every day.”
Some of Foley’s reported attitudes and ways of growing in the title business may prove to be a blueprint for achieving his goals in the wine world as well. In a 2002 Santa Barbara News-Press story, he explained, “I’m a very good delegator, so that’s one of the reasons the company [Fidelity] has grown like it has.”
He’s also told business reporters over the years that he looks for companies that have been mismanaged—for ineffective managers who miss growth opportunities and ignore their customers’ changing needs—so he can create a list of what needs to be done to fix the company and then use that list in negotiations to lower the asking price.
Foley admits he’s using similar strategies when targeting his interests in the wine world. “It’s the same model we used at Fidelity,” he says. “We started with a base; we consolidated all the back office activity in one spot and then had our branch offices out in the field. I’m trying to do the same thing with the wine business, in that I’m centralizing all that back office activity at Chalk Hill. But at each of my wineries, there’s a winemaker, production, cellar masters, vineyard managers. My winemakers have a lot of freedom.”
Pairings
Foley has also held interests in the restaurant industry via Fidelity’s CKE Restaurants subsidiary, most notably, of which Foley served as chairman and CEO. CKE consisted of regional restaurant chains along the lines of Hardee’s, Carl’s Jr., Green Burrito, Checker’s Drive-Ins and others.
Today, he serves as chairman of Glacier Restaurant Group, LLC, which he formed and runs from Montana, where he’s also developed Rock Creek Cattle Company, an 80,000-acre working ranch that includes a high-end golf community with homesteads and a lodge. He also owns Whitefish Mountain Resort, a ski lodge in winter, with plenty of hiking and mountain biking activities to offer throughout the rest of the year.
Foley and his wife, Carol, who’ve been married since 1969, have four children: two boys, William III and Robert, and two girls, Lindsay and Courtney (the combination of whose names formed the basis for Lincourt Vineyards), whom he hopes will continue his legacy in the wine world.
Hard-nosed and soft-hearted
Foley has said that what he looks for in his wine acquisitions are hard assets, tangible things such as land, a production facility, distribution, a good reputation that’s already established and untainted brands.
His own online Foley Estates bio admits he’s “by turns hard-nosed and soft-hearted” and that he’s committed to achieving an enological and viticultural portfolio that resonates not only with wine professionals worldwide, but also with the average American consumer, “who enjoys a memorable bottle of wine at the end of a long workday.”
He also has no problem admitting he can be hard to work for, characterizing himself as firm but fair. “I can’t wait for somebody to get on board,” he says. “They either get it or they don’t. If they don’t get it, they can’t grow with me. There’s too much stuff going on all at once. I’ve found that [in] the wine industry, the talent pool isn’t deep. But I’m finding good people. They’re achievers. I try not to expect anything from anyone else that I wouldn’t do myself. I’m a pretty hardworking person and I like to get things done.”
Foley has learned how tough the wine industry can be as he’s gone along, telling Forbes in a 2008 story titled, “Tips for Success in the Wine Business”: “[For] people who think they’re just going to go sit in the vineyard and live in the house that happened to be on the property, walk through the vineyard, and [have] wine [that] gets made and sold automatically, it’s a big surprise.”
In the same story, he says it took him seven years to make his first winery in Santa Barbara profitable, noting that, after deciding to start construction on a production facility and tasting room, “Before I knew it, I was into it for $15 million. It was like the blink of an eye. I didn’t see it coming at all.”
He still feels he might have underestimated things. “I thought it’d be easier,” he admits. “I thought I had a lot of good [business] experience, but what’s happened over the last couple years is, I’ve had to get in with the tough economic times and analyze those costs of goods, look at each one of our varietals—what each product is costing, what our grape costs are.”
He says that includes figuring out what he can afford to spend on each particular product he has including how to declassify if some of his wine doesn’t make the cut. For example, if something doesn’t make it into the Chalk Hill level of estate reds or Chardonnay, where does it go and what can he do with the wine?
“I’d say it’s been pretty challenging over the last few years to make money and be successful in this business, especially acquiring these properties and collapsing everything into an infrastructure,” Foley says. “I realized the infrastructure couldn’t take the heat, so I had to keep upgrading people and making improvements. I’m finally pretty close. I’m just about there.”
In addition to his outright acquisitions, Foley Family Wines also maintains strategic partnerships with several brands, including Wattle Creek Winery in Alexander Valley and Australia’s Boomerang Vodka.
In January 2011, Foley was honored by Wine Enthusiast magazine as its Man of the Year for 2010 at a black-tie event held at the Public Library in New York. Accepting the award, Foley told the crowd of industry luminaries that it was, “totally unexpected,” and that he was, “totally honored.
“I’m new in the business, in the wine industry, in terms of having a larger presence,” he said, “and to be recognized in this way by a prestigious magazine is really unbelievable.”
