Rounding out and buying up
Consolidation has been one of the most noticeable trends in the wine industry of the past few years. Two of the juiciest morsels still privately held have just indicated their desire to get in on the M&A action. But instead of submitting to being bought, they are the ones doing the buying.
Jess Jackson, owner of Kendall-Jackson among other brands, has just emerged as the highest bidder for Legacy Estates, the bankrupt wine company that includes the premium brands Freemark Abbey winery in Napa Valley, the Arrowood Vineyards and Winery in Sonoma and the Byron Vineyard and Winery in Santa Maria. He has offered $97 million according to Wine Business Monthly but may have to pay a further $5 million to Wilson-Daniels, Legacy’s distributor, to get out of the prior distribution agreement. [WBM]
Roger Trinchero, vice-chairman and CEO of Trinchero Family Estates, announced the acquisition of Napa Cellars a small winery founded in 1996. [WBM] Napa Cellars offers wines around $25 retail, the low-end of Napa’s increasingly high price range.
The Trincheros struck gold in the late 1970s when they pioneered white zinfandel, which grew into the multi-million case brand of Sutter Home. As white zinfandel has softened, the privately held company has leveraged its bulk to acquire higher-end wine brands.
According to WBM, Trinchero was the sixth largest US winery last year with over nine million cases sold. Kendall-Jackson was eighth, selling five million cases. If you’re interested in seeing the biggest of the big, check out this informative article from Wine Business Monthly.
Are these companies rounding out their portfolios to be more attractive to potential suitors? Could be. Or they could be getting ready for the next generation of leadership with a slightly more diverse range of wines. Time will tell…
tags: wine business | mergers & acquisitions
