There has been consolidation going on in the wine business for some time, and recently we’ve seen a wave of cash investment in small-to-medium-sized wineries by both large and smaller boutique investment companies. And rightly so… As reported in previous Round Ups, wine consumption in the US has grown steadily for the last decade. With consumption continuing to rise, many cash positive companies are looking to expand and invest in proven brands/vineyards. Terroir Selections recently purchased a stake in Whetstone & Manifesto Wine Cellars and also acquired Trinity Hill of New Zealand. Bill Foley has been on an acquisitions tear with recent purchases of The Four Graces winery in Oregon and Martinborough Vineyards Estates, also in New Zealand. In 2013, Bacchus Capital made an investment in DeLille cellars in Washington while acquiring Panther Creek out of Oregon. Silicon Valley Bank’s report on ownership transitions found that 1 in 10 wineries are considering a sale in the next five years with 1 in 3 open to a sale. It’s not a sign of structural weakness but rather a confirmation of a healthy and robust industry. The report states, “…transitions and sales in any industry are a sign of current and future strength.” As I have said before, I think new investment and know-how entering the market is good for the industry. I will only add that I hope these wineries do not lose their brand identity and core values, but it seems to me these investors know that, so I’m looking forward to better and stronger wine industry in the years to come. Source: Consolidation Sensation By Greg Bybee, Executive Wine Specialist
Posted on: Mon, 04 Aug 2014 03:08:01 +0000
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