California Wine’s Deal-Making Heated Up In 2011, According To Wine Spectator ReportDecember 19, 2011
When Fiji Water purchased Justin Vineyards in the closing days of 2010, was it a sign? It’s far from a fire sale, but a host of wineries in California are changing hands while others are quietly taking on new partners, reports Wine Spectator. The surge of deals in 2011 was preceded by two years of slow business activity—the weak economy meant plenty of wineries were struggling, but no one wanted to ride to their financial rescue. With growth slowly resuming, players with deep pockets, such as Fiji Water and Boisset Family Estates, have looked to expand. At the same time, vintners are facing increasing competition, and a generation of pioneering winery owners is seeing many in the ranks now ready to retire.
In 2011, Wine Spectator reported on more than 20 California wineries and vineyards that found new owners or took on new partners. Sales included giants like Fetzer Vineyards, which was sold to Chile’s Concha y Toro, but mainly involved small and mid-tier producers like Gary Farrell, Sonoma-Loeb and Pillar Rock.
Sonoma County has been especially active. In November, investment group KSSM, LLC, and principal investor Steve Adams purchased Michel-Schlumberger Wines in Dry Creek Valley. Fiji Water’s parent company, Roll International, added Landmark Vineyards to its new portfolio. And Burgundy-based Boisset Family Estates bought Buena Vista Winery.
Vintners also told Wine Spectator that some wineries have quietly taken on partners or changed hands in the past few years. Limerick Lane Cellars, a Sonoma winery focused on Zinfandel and Syrah, was sold to Healdsburg residents Alexis and Jake Bilbro, whose family owns Marietta Cellars, when the original owner decided it was time to leave the business.
Meanwhile, investors are betting on the U.S. wine market’s encouraging growth trends and are actively trying to expand their portfolios while the industry regains its footing and acquisition prices are relatively low. San Francisco-based private equity firm Bacchus Capital Management, which mostly provides financing to wineries but sometimes invests in them as well, purchased a stake in Sbragia Family Vineyards in October and is actively seeking out other deals. “The U.S. wine market is growing, so it’s a good place to be,” says Sam Bronfman, managing partner at Bacchus. “While the trend line dipped during the recession, it will go back up over time as people go back to buying higher-priced wines.”
Click here for Wine Spectator’s full report on California’s recent wave of wine sales.
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