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Interview, Part 1: Vintage Wine Estates On The Acquisition Trail

September 23, 2021

In May, Santa Rosa, California-based Vintage Wine Estates went public in an IPO valuing the company at $690 millionTo make the move, Vintage merged with blank check company Bespoke Capital Acquisition Corp (BCAC), with Wasatch Global Investors also acquiring a $28 million stake in VWE. The company’s annual volume is approximately 2 million cases, including brands like Girard Winery, Clos Pegase, Swanson Vineyards, B.R. Cohn, Viansa Sonoma, Cameron Hughes, Windsor Vineyards, Laetitia, and Layer Cake, among many others. On Tuesday, VWE teased its preliminary fiscal 2021 results (which are slated to be released in full next week), showing revenue of $221 million, up 16% over the previous year. SND senior editor Shane English recently spoke with Pat Roney, VWE’s founder and CEO, about the IPO and the future of the business.

SND: What prompted the decision to take Vintage Wine Estates public?

Roney: We decided to go public to have access to more capital and to continue making acquisitions. Our company has grown over 20% on a compound annual growth rate in the last 10 years. That’s a combination of organic growth and acquisitions. We see a prime opportunity to continue to make acquisitions, and we wanted the capital from public markets to do that. I don’t think it structurally changes anything that we do. We have 40 acquisition opportunities that I’m looking at right now. I continue to think that we’ll make three or four acquisitions this year, and we’ll make some next year as well. It’s been a pretty successful approach for us. (Since 2018, VWE’s purchases have included Layer Cake, Tamarack Cellars, Qupé, Laetitia, Owen Roe, and Kunde, among others.)

SND: How do you counter the conventional wisdom that being a public company in the wine business has historically been difficult?

Roney: Although people historically have not thought that the companies that have been public have done well in the wine industry, it was a lot different in the past. The real truth of the matter is that if somebody had invested in every single public company in the wine business over the last 20 years, they would’ve gotten a 47% return on their capital. And it just so happens that most companies were acquired. Robert Mondavi, as an example, was acquired for $1 billion; Ravenswood was acquired for $300 million. They didn’t last that long as public companies, but they did well.

SND: Where in your portfolio are you seeing the best growth?

Roney: In our brands and our wholesale division, we’ve seen great growth with the Bar Dog brand, which is one of our fastest growing wine brands and is going to continue to receive a lot of emphasis from our team. Firesteed, out of Oregon, our Pinot Noir brand, continues to show double-digit growth, far outpacing its category. B.R. Cohn winery, particularly the Silver Label, is doing very, very well for us too. 99% of the wines we sell are over $10 a bottle, and many are in the luxury category. We see that as a continued area of growth.

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