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September 14, 2018

Continual Expansion Has Served Kautz Farms Well

During the late 1960s, the development of the mechanical tomato harvester saved the California processing tomato industry and led to great expansion of production. As others were entering the industry, Lodi tomato farmer John Kautz saw difficulties on the horizon and began diverting his acreage to wine grapes.

This going-against-the grain action was a seminal moment in the history of the family farming operation, and 50 years later, John H. Kautz Farms and its holdings are on top of the wine world…literally. The family operation has expanded exponentially and now farms about 8,000 acres of wine grapes, owns two wineries and runs a world-class entertainment facility attached to one winery far above the fray in the Sierra foothills.

The Kautz family story begins in the early 1900s when the family emigrated to the United States from its native Germany via Ukraine. First stop was Nebraska in 1906 and then a move to California in the early 1920s. The family eventually settled in Lodi and John was born in 1930 on the same property that currently holds his family home, as well as the headquarters of Kautz Farms. The family was self-sufficient as it raised its own animals and livestock and grew its own vegetables. Over time, the family farm grew to 38 acres and it became a commercial operation, with various crops and dairy items providing a living for the family.

During his youth, John got involved in the Boy Scouts, which, to this day, he points to as one of the great influencers on his life. He is an Eagle Scout and continued in the organization in his adult life becoming a Scoutmaster and receiving the prestigious Distinguished Eagle Scout Award. By the time John graduated from Lodi High School in 1948, grain crops, including alfalfa and corn, and canning tomatoes were part of the mix. John joined his father on the farm as his older brother was tragically killed in World War II. Another tragedy occurred in 1952 when John’s dad died, leaving the farming operation in the hands of the young Kautz.

John started slowly changing some of the crops. He added pickling cucumbers, green bell peppers and other vegetables, and eliminated the dairy cows. John also got involved in the farming community at a young age, which is still a hallmark of his existence. The list of organizations he has belonged to and served in one leadership capacity or another is lengthy, including Western Growers, California Farm Bureau and the California Wine Institute, as well as serving 11 years as president of the California State Board of Food and Agriculture. He has belonged to a score of organizations and has received too many awards to name, though it is interesting to note that John Kautz was named Outstanding Young Farmer in the Nation in 1965 by the Junior Chamber of Commerce.

As a small farmer in the 1950s, he joined together with several neighbors and formed the San Joaquin Vegetable Growers Co-op in an effort to create leverage through collaboration—another hallmark of his life.

Another big influencer in his journey, wife Gail Kautz, came into his life in 1958. “We met in a pizza parlor,” said Gail, “but I always liked telling my dad it was a bar.”

Gail was studying at the nearby College of the Pacific—now Stockton’s University of Pacific (UOP)—and soon finished her studies earning a Bachelor of Science degree in elementary education. She and John were married not too much later and produced three sons and a daughter in the 1960s—each of whom are now in the family business.

Gail’s personal journey began in Oakland where she was born and raised the daughter of a lawyer. “I like to say I was a country girl born in the city,” as she was an active participant in 4-H clubs and Future Farmers of America (FFA). In fact, her influence won out over that of her husband when it came to raising their own children. They each followed the 4-H path rather than the Boy Scout route.

In those early years, Gail stayed close to home raising the kids but as the years went by she became much more involved in Kautz Farm and the farming community in general. Like her husband, she has been an active community member with service to many different organizations, including UOP’s Board of Regents and the first woman chair of the California State Fair. And she has also been honored more times than there is room to relate. Today she has an office next to her husband’s in the company headquarters in Lodi and is involved in every aspect of their business.


A Game-Changer

In the 1960s, as a processing tomato grower, John called himself a “rubber tramp” as he would travel throughout the valley checking on his various tomato acreage plots. He was active in the industry and a member of the California Tomato Growers Association board when it worked with seed companies and the University of California to create varieties that could be mechanically harvested and the harvester to do it. As that project was gaining success, John witnessed more and more large growers eyeing the tomato industry. With a mechanical harvester, these growers were creating continuous fields of hundreds of acres in the Southern San Joaquin Valley. “I saw the handwriting on the wall,” he said. “How could we compete with a 40 acre plot here and another small plot over there?  We (in the Lodi area) had put ourselves out of business.”

But instead of licking his wounds, Kautz shifted his acreage to wine grapes. He said the micro-climate in Lodi is absolutely perfect for permanent fruit crops such as grapes and cherries. “We have warm days but at night it’s like a giant air conditioner with the cool breezes coming off the Bay and the Delta. It’s a cool moist breeze from Sacramento to Stockton.”

John said the result is a wine growing region second to none in the state of California. He admits that Napa has the reputation but he does not believe it can grow any better grapes or produce better wine than Lodi.

As Kautz Farms began shifting its acreage, its holdings had expanded significantly and they continue to grow to this day. “I drew a circle on the map around my farm and anytime land became available, I’d buy it. Sometimes I paid a very high price, but it was worth it.”

As he started increasing his wine acreage in the 1970s, Lodi already had a reputation for producing zinfandel grapes and wine. To this day, it is known for its old vine zinfandel, with some of those vineyards dating back more than 100 years. But again, Kautz decided to go against traffic. Most growers were planting zinfandel and barbera; Kautz put in chardonnay, merlot and Petit Sirah. “I was the only one with a chardonnay in Lodi for a long time.”

In 1973, the company signed a 30 year contract with the Almaden Vineyard to provide that large producer with wine grapes. “That allowed us to grow quickly. We converted all of our vegetable acreage to permanent crops, including some cherries and almonds, which we still have.”

The company also crushed some of its own grapes, which were made into wine and exported mostly to Japan.

In the late 1980s, the company continued its foray into the wine business by building Ironstone Winery in Murphys, which is about an hour’s drive from the family’s home in Lodi. It was also a favorite spot of Gail Kautz, who grew up spending summers at the family’s mountain cabin in that town. Today that house is John and Gail’s second home, and Murphys has become a bustling wine town. “When we built the winery, there were a total of three wineries in Calaveras County. Now there are 23 wine tasting rooms on Main Street alone,” Gail said. (Yes, that is the same Calaveras County made famous by Mark Twain’s jumping frog story.)

As the Ironstone property took shape, the Kautzes added an 8,000 seat amphitheater a few years later and today that venue attracts world famous acts. This summer Willie Nelson performed at the theatre as well as acts diverse as Boy George and Allison Krause. The facility is also home to the Ironstone Concours d’Elegance, a classic car show, which is Gail’s pet project. Now in its 22nd year, Gail says it is one of the top classic car shows in the country, attracting more than 350 vintage cars and raising more than $1 million during its lifetime for 4-H and FFA activities. The Kautzes built the outdoor terraced theater with wide ramps so that it could accommodate the winning cars as they paraded by at the appropriate time during the car show.

In the 1990s, Bear Creek Vineyards, a winery in Lodi, was added to the mix. “It’s as efficient a winery as you can build,” John said. It’s a state-of-the-art facility providing wine processing services, including custom wine production.

As mentioned, each of the Kautz four children are involved in the operation and have different areas of concern. Steve is the oldest and runs the Ironstone Winery and the Murphys’ facilities. Kurt handles the Bear Creek Winery and also operates the company’s “Hot Wood” brand, which is the number one label in packaged firewood. It is sold to retailers throughout the western United States. Jack is in charge of the company’s property management and land acquisition division. Daughter Joan is running the company’s off-shore marketing program for its wine and is also getting involved in the domestic marketing program as well.

The company does not have a board of directors. “My kids don’t like meetings,” John quipped.

He said each of the kids has their area of expertise and they have autonomy in the decisions that need to be made in their sphere. John claims to leave them alone and notes that from the beginning, he groomed his kids to take responsibility and take control of the organization. “We have watched so many families that were successful but didn’t bring their kids into the organization. That was not what we decided to do. As they were growing up we were fairly tight with funds to the kids. They had to earn what they received. But we gave them the opportunity and they all have taken it.”

As John and Gail get ready to celebrate their 60th wedding anniversary, they look over a large agricultural operation that has been built from scratch with no fatal missteps along the way. John explains that as a kid, he loved to play the game of Monopoly, buying Boardwalk and Park Place and constructing houses and hotels as the object of the game was to maximize the value of each property. John H. Kautz Farms has traveled that same path