Many of the buyers interested in California Wine Vineyards are also looking at “unimproved” land that might be suitable to start a vineyard, as opposed to purchasing one that is already established. We find that these buyers are generally in one of 2 camps. Either they are looking for a “Deal” and feel that they can start small, and grow a presence – or they are already Vintners, looking to expand.
If you fall into the “Just Starting Out Camp” here are some things to consider:
Vineyard development costs fall into two basic categories – Those expenses that occur in every vineyard and those expenses that occur in some vineyards and not in others and vary according to the vineyard.
There is one basic decisions you have to make that will drive all the standard costs – how far apart to space your rows and vines. In the “Inner” California AVA’s, where you find more “bulk” (as opposed to premium wine production) you will find that spacing has been consistently dropping (and therefore vines per acre increasing). In the past 20 years this “production” in certain varieties has gone from a standard 450 vines per acre (8′ by 12′ area) to close to 900 vines per acre (in a 6′ by 8′ space). With Premium Wine Productions (again based upon the grape) in the Coastal AVA’s of Napa and Sonoma, you still find the norm to be fewer vines, better quality.
You should figure about $20,000 for standard costs of installing a vineyard. You can add an estimated $5,000 to $20,000 per acre to cover the upfront costs associated with engineering, WATER, soil tests, drainage, erosion, rocks, fencing, and frost protection.
While the numbers vary WIDELY depending on location, and the production nearby – the current typical end cost per acre is between $20,000 to $40,000 per acre.
The grape growing areas of Napa Valley and Sonoma Valley are similar. They both run from the South Coast to the North, and they both benefit from the hills, rain and historical care given to the vines placed in their care. So it’s not surprising that these unique areas (AVA’s), which are IDEAL for growing the some of the World’s Finest Cabernet Sauvignon grapes, compete for the title of “favorite” all the time!
Napa has long been considered the favorite, and they’ve been working for decades to create wines that grow in value as they age, with some success. The 2011 season is considered by some one of the best years yet – granted there were fewer grapes, but higher quality.
Recently though, James Laube, one of the most Internationally acclaimed Wine Experts wrote this about a Sonoma Valley Cabernet:
“Rich, savory and full-bodied, showing direct, potent young Cabernet flavors built around blackberry and dark berry fruit, with touches of spice, black licorice, mineral and toasty wood. Very impressive for its purity, finesse and graceful finish. Best from 2012 through 2022. 2,450 cases made.” –JL
The region is comparable to French Bordeaux grapes, and growing season, and the Beringer Knights Valley wine (he was referring to) does mirror these flavors gracefully. The price: $45, with 3,600 cases made. It’s the best Beringer Knights Valley wine I can recall and one of winemaker Laurie Hook’s best efforts
In addition to Beringer’s Cabernet, Wine Spectator’s “Top 100 Wines” list for 2011 includes HALL as #2 in it’s list of the top 20 wines! (and the FIRST one is NOT from Napa!)
“With a successful real-estate empire, Craig and Kathryn Hall didn’t take any shortcuts with Hall estate, which comprises several hundred acres in vines spread over six vineyards in Napa Valley. The 2008 Kathryn Hall Cabernet is a blend from four of the sites. Winemaker Steve Leveque added a splash of Merlot to round out the texture and heighten the aromatics. The wine captures the essence of Napa Cabernet yet is distinguished from other great 2008 Cabs by its seamless texture, wonderful focus, purity of flavor and persistent finish.” -Wine Spectator, November 15, 2011
What does this mean for clients interested in purchasing a vineyard with potential ROI? Despite current U.S. economic conditions, the wine industry is showing signs of optimism. Bulk wine market inventories have come into balance and in some cases there is a shortage. Grape prices are on the rise. 2011 Cabernet Sauvignon grapes are virtually, entirely committed.
For the past many years, there’s been a direct correlation between the prices / demand for grapes – and the prices / demand for vineyards. (the adjacent chart reflects the sales price for land SUITABLE for a Vineyard, not planted). The tightening of inventories will leads to increasing vineyard prices. Also, this optimism has caused winery owners to take a strengthening position regarding thee perceived value of their winery assets.
When assessing a property, I look at the cost of operations over the last 3 years, the tonnage produced, the Vinter, the WineMaker and how it is being marketed… we also look at the weather in that Appellation, and what is being produced from that area.
We also look at the soil, and the quality / life of the vines. In many ways, it is important to note that you are not just purchasing real estate when you buy a Vineyard, you are buying a business.
What are we doing to identify winery properties without brands and have the potential to produce $100/btl wines? We are networking throughout the Napa Valley to source potential wineries that may be for sale. These properties are not easy to find, so we ask for your patience. If you are interested in purchasing a Premium Winery in the Sonoma/Napa Region call Mark Stornetta.
Looking for more information on which area of Sonoma or Napa might be the perfect place to grow grapes and create your dream of owning a Cabernet Sauvignon Vineyard? I can help with that too!
We’ve all heard of counterfeit movies, counterfeit watches, and purses. But in a very real move, the Napa Valley Vintners Association is working to prevent our California wine from being mislabeled, and sold around the world with misleading packaging – especially if it SAYS it’s from the Napa Valley AVA! The Napa Valley Vintners (NVV) is the non-profit trade association representing more than 420 wineries in the appellation.
The Association is working with the California Wine Institute to gain exposure to Napa Valley wines, and in fact, the growth for this product in Hong Kong and China. It’s important to note that in the last five years, Chinese wine consumption has doubled! And it’s not just in China! The Asian wine market is, as a Region, growing and in an historic move, the Napa Valley Vintners Association gained an agreement with the Government of Thailand.
Working directly with Thailand’s Department of Intellectual Property, Thailand has recognized Napa Valley with Geographic Indication (GI) Status that will protect the American wine region from misuse of its name in wine labeling in that country.
“This is a terrific accomplishment for our trade group in protecting our appellation’s name from fraudulent use in yet another high-profile, emerging wine market,” said NVV Executive Director Linda Reiff. “We have been able to achieve this and other GI recognitions by working directly with these government agencies, such as our successes in the EU and India, which is important to building our export channels for Napa Valley wines.”
Eagles Trace, found just 3 miles up from the Napa Valley floor won several awards at the China Wine Awards for 2011! Latitude 38 – Estate Brown, Cabernet Sauvignon – Estate Grown both won Silver Awards, and Pinot Noir – Estate Grown – Valhalla Vineyards came in as Highly Recommended. This is especially prestigious, given that of the hundreds of wines competing for awards, only 3 other US wineries received an acknowledgement. Wine Consuption overall in China has more than doubled in the past few years, and according to VINEXPO research – the forecast for 2014 is for Chinese wine consumption to grow by a further 19.6%, reaching 127 million 9-litre cases by the end of the period.
Eagles Trace was founded by Gus & Phyllis Anderson. Gus enjoyed a successful career as founder and winemaker for Anderson’s Conn Valley until his retirement at age 72. After a year of not being happy resting in a rocking chair, Gus came out of retiremetn and started Eagles Trace. The new winery is located right next to Anderson’s Conn Valley.
The fun of starting something new – with all of your past experience, is that you can try new things! The new winery allowed him to implement some very creative wine making practices – techniques that he never had a chance to implement during his first winemaking career. These practices, and the acute attention paid to the grape growing process on the property makes for a perfect combination.
Gus says, “You can make great wine out of great grapes, but you cannot make great wine out of bad grapes!”
Picky? Well sure! During his “year off” – much research and thought went into analyzing the soils, and matching the rootstock of the vines with the particular soil types. Not only are the grapes tested daily when they are within a 60 day guess of when they should be harvested, but they are actually tasted too! “Grapes are picked when they are ready, which means only parts of the vineyards are harvested at certain times. “ Not limited by what other vintners might deem to be the perfect conditions, Eagles Trace have grapes that were picked as late as mid November.
Son Todd, still operates the successful Bordeaux style vineyards and produces wonderful wines at Conn Valley Vineyards (next door). It’s not surprising that Eagles Trace was one of the China Favorites! Again, from a pure ROI and EBIT Investment Opportunity for Chinese investors, purchasing Vineyards and Premium Wineries like Eagles Trace makes sense.
Look at some of the other awards they’ve also recently received:
Many of the clients I am dealing with are looking for a home with some land, and have not decided yet if they want a home with an established vineyard or one that they can create their own legacy from. To make that decision, we discuss the potential Cost (and reward) of ownership. In that discussion, we also discuss what type of wine they personally favor, and what location of Wine Country they are most interested in.
In the Assumptions done each year by the Research and Teaching teams at the UC Cooperative Extension and the Department of Agricultural and Resource Economics Department at UC Davis, a piece of land deemed suitable to grow grapes will have a small production in the 3rd year and could yield a fully producing facility by the 5th year. So, to begin with – you need to know that if you are purchasing a piece of property to create a vineyard – you will potentially be waiting 5 years before you begin seeing Revenue.
To be sure, growing wine grapes is a business – a good business. The ROI for clients, even in this uncertain marketplace, can produce a good income year after year if the vineyard is well run and well marketed. In our initial conversation, we will also discuss what type of owner you intend to be. The involvement, the actual labor and time you are able to contribute to the vineyard, the return you expect on the investment and the type of product you are interested in producing all need to be considered.
For instance, my wife’s family owns a Vineyard in this area – and at certain times of the year, she is out of the house before 5am to go check on the vines! If that’s not the level of commitment you have time for, we can talk about the cost of retaining a property manager. Often times their connections, and ability to get a little more fruit per acre create more revenue than the cost of their service! (Many of clients are only in Wine Country for a limited time each year, and so I’ve got great contacts for these type services!)
Fortunately, once the vineyard is in the ground, the costs to operate the vineyard from year to year are pretty predictable. It costs $2,500 to $3,500 and up per acre to farm every year. This includes all farming costs, including a Pickup Truck. The UC Davis 2010 estimate for the 3rd year of Operations for a Sonoma farm of 30 acres to be approximately $3,023 an acre. Other costs, such as insurance and interest expense have to be considered separately.
As with most business, the cost of labor (in this case harvesting) is considered separately as well at about $500 per acre in the 2010 UC Davis Study.
Grapes are sold by the ton and prices vary from area to area and from variety to variety. The Chart below reflects the 2010 prices for Grapes per ton in Sonoma:
Tons per acre varies considerably from variety to variety and from high quality grapes to low quality grapes. You can get as many as 10 tons to the acre or more for some varieties at lower qualities. But in general, you can estimate about 5 tons to the acre or less for high quality grapes of most varieties. Average yields for Pinot Noir will be a little lower and most white grape varieties a little higher.
You will also see a difference based upon when the vineyard was planted. Older standards called for planting grapes might also affect your yield. In the last 30 years the standard changed, and today vines are planted almost 2 times more densely than they were in the 1970s.
So, for a typical Sonoma County red wine grape variety, if you figure $2,000 a ton and 5 tons to the acre you should get about $10,000 an acre in revenue. Take away our average of $3,000 in costs + $500 per acre for harvest and you get $6,500 per acre in net income.
This is obviously not an exact science – and you can see that we’ve not calculated any management fees, or production fees if you decide to create your own wine from your grapes.
Right now there aren’t enough Sonoma County grapes to go around and wineries have to compete for available fruit. This can work to your advantage if you are willing to spend a bit of time through out the year getting to know the wineries in your area. Learn about the various techniques used, and don’t be afraid to talk about your vineyard. You’ll get lots of free stuff and probably make some new friends!
There are multiple vineyard properties for sale in Sonoma, and we compared those with vineyards for sale in Napa Valley recently. If you are considering purchasing a wine making operation in California. Call Mark Stornetta 707-815-8749 f you’d like to learn more about Napa Valley Vineyards for sale and Sonoma Wineries available, contact Mark Stornetta 707-815-8749 – I have a unique connection to this land, to the art of wine making, to the history of the Appellations, and the value of vineyards for sale in Napa and Sonoma. I can help you calculate your ROI and EBIT on a Vineyard or winery in California.
Understanding the history of the land, and the climate, and the types of grapes, and production that comes from a particular area is just part of what I try and explain when I meet with a new client. Most of the folks I work with, even if they are ready to make a 3 or 4 million dollar investment, need some education about why they would purchase a property in one part of Sonoma or Napa as opposed to another. They need to understand what types of grapes are there, and what the production is likely to mean for them, and their ROI. In this (admittedly long) post, I want to introduce you to tiny Bennett Valley Appellation.
Located just outside Santa Rosa California the beautiful Bennett Valley Appellation is perfectly situated between once volcanic mountain ranges of Taylor Mountain to the west, Sonoma Mountain to the south, and Bennett Peak to the east. Not only does the valley have an ancient volcanic origin, it also has several fault lines running through the area. This particular AVA is less than 10 years old making it one of the youngest AVA’s – and since it has less than 700 acres of vineyards planted, it is also one of the smallest AVA’s in California.
Bennett Valley AVA is positioned exactly where you would want grapes to grow, on hillside slopes of the Mountains, in well-drained volcanic soils. This Appellation has a higher elevation than the Sonoma Valley floor. Most growers feel, however, that it’s special because of a cooler weather pattern during the grape growing season that works to make this an ideal grape-growing environment for the production of ultra-premium wines.. That’s one of the reasons Merlot, Chardonnay, Pinot Noir, Syrah, and other cool-climate grapes thrive here.
In 1862, Isaac DeTurk planted 30 acres of vines in Bennett Valley, and later founded Belle Mount Winery. Along with grapes, apples, wheat, and oats were important agricultural products. Phylloxera hit the region particularly hard during the 1890s, followed by Prohibition in 1918. This effectively ended widespread winemaking for a few decades. Matanzas Creek was established in 1975, when they planted their first 20 acres of vineyards.
After prohibition, the Valley was mostly forgotten. John Taylor arrived in 1953, and bought 2,000 acres in the valley, planting some of his land with Zinfandel and Mission grapes. But John was a dairy farmer at heart and most of the land was dominated by his dairy production and cattle. Purchasing over 100 acres of that dairy land at a liquidation sale in 1971, Sandra MacIver went on to change history as she and her husband established Matanzas Creek Winery. During the late 1980′s, early 1990′s the MacIver’s spent countless hours running tests on various handcrafted methods for their wines. And in 1993, they released JOURNEY which was Crafted from the finest one percent of 700 Chardonnay barrels. The two hundred cases sold out upon release, even at the $70 a bottle retail price. Critics still measure other California wines to JOURNEY, as it is hailed by many as the finest Chardonnay ever produced in America.
That sort of prestige caught the attention of many winemakers, and most people attribute legendary founder of Kendall Jackson, Jess Jackson (who died earlier this year) with “creating” the Bennett Valley AVA in 2003. He wanted to distinguish Matanzas Creek Winery products from other Sonoma Valley wines.
In addition to wonderful grapes, Matanzas Creek Winery is also home to an acre of lavender which blooms annually to produce over 2 million stems of lavender! Because of this, one of our favorite Wine Country Events is the “Days of Wine and Lavender” at the Estate each June. The lavender harvest fits beautifully into the wine making cycle, as the flowers usually reach their zenith in June, well before the busy grape harvest. The staff makes use of all parts of the lavender in it’s production of unique bath and body products, wonderfully sached home products – and culinary delights! Lavender in Lamb and Chicken? If you haven’t tried it – you should!
But there’s more to Bennett Valley AVA than Matanzas Winery! You’ll also find Alta Ridge Vineyards, Annadel Winery, Argot Wines. Barbed Oak Vineyard, Bennett Valley Cellars, Bevan Cellars, Flanagan Family Vineyards, Frostwatch Vineyard & Winery, Grey Stack Cellars, Jemrose Vineyards, Mackie Family Wines, Nelson Estates Wines, Sable Ridge Vineyards, Silver Pines Vineyards Westerhold Family Vineyards. Here’s an interactive map to the various vineyards and wineries in Bennett Valley AVA.
If you are considering a vineyard as a second home, or a new business, it’s important to understand that the County of Sonoma is somewhat restrictive to “cookie cutter” neighborhoods. Custom Homes are typically built on land parcels ranging from five to 40 acres. There’s a property currently listed on Bennett Road with 55 acres, that’s just waiting to be planted! If you have questions about vineyards and wineries for sale in Sonoma and Bennett Valley – please call Mark Stornetta at 707-815-8749. I’m uniquely qualified to help you make an investment if you want to purchase a vineyard in Sonoma, or a winery in Napa. I understand the history and the challenges of owning a vineyard home… and I understand ROI and EBIT, and can show you the formulas I use. Our office has several beautiful Bennett Valley AVA Properties for sale.
Hong Kong is under going a population change, as it becomes increasingly older, with dual income, “empty nester” families. The increased disposable income for these families, combined with the government’s abolishment of its 40% excise tax on wine on February 27, 2008, is good news for real estate for Wine Country Real Estate.
There have been 4 significant changes to the Hong Kong tax rates in the last 5 years, which resulted in lower wine prices. These tax changes are part of a larger move by the government to encourage investment and ensure Hong Kong’s economic competitiveness. They are predicted to continue to encourage the development of Hong Kong as a regional wine trading and distribution hub.
Fortunately, American and South African wines have seen the largest price reductions in Hong Kong. The European wine prices have not faired as well, however, France leads all statistics for high end Chinese Wine Consumption. The abolishment of tax on wine has also led to increased imports of high-value wine.
In addition to this, wine in Hong Kong and the rest of China has become “a social status symbol especially among the newly formed middle classes in China.” According to more than one analyst, “The demand for wine is increasing at extremely high speed.” With lower prices, and a growing demand from the Chinese Consumer, many are gambling on the fact that Hong Kong will eventually become one of the world’s largest wine auction centers.
Additionally, it’s important to note that in the last five years, Chinese wine consumption has doubled. According to VINEXPO research the forecast for 2014 is for Chinese wine consumption to grow by a further 19.6%, reaching 127 million 9-litre cases by the end of the period. Again, from a pure ROI and EBIT Investment Opportunity for Chinese investors, purchasing Vineyards and Wineries makes sense.
At that point, China will be the 6th largest wine consuming country in the world. (VINEXPO – The iwsr / 21 February 2011)
Consider this, Asia’s recent appetite for fine wine brought record auction sales in October of 2010 when Three bottles of 1869 vintage Chateau Lafite-Rothschild sold for 1.8 million Hong Kong dollars each (US$232,692 according to the WSJ) – the highest amount sold for wine at auction world-wide. On October 3, 2011 The Southeby’s Luxury Wine Auction highest seller was 1988 Domaine de la Romanée Conti. 12 bottles of The globally sought after Burgandy sold for $116,346.
The California Wine Institute is doing it’s part to promote our Napa Vineyards and Sonoma Wineries to the Chinese. In July the San Francisco based Institute participated in a Virtual Wine Tasting, involving California Vintners and a select group of lifestyle media representatives in Shanghai. The video conferenced tasting was part of the Institutes $300,000 branding campaign for California Wines in China, and in Shanghai there were bus wraps, subway bulkheads and light boxes, and luxury shopping mall billboards promoting our wines!
This spring, the Wine Institute completed a four-city trade mission to China with 27 California winery delegates, representing 68 wineries and 95 California wine brands, the largest California winery representation ever. The 2011 China Tour included visits to Shanghai, Chengdu, Guangzhou and Shenzhen. Of the U.S. wine exports to China, 90% come from California, that represents $45 million in sales during 2010, a 27% increase from the previous year.
Other trends associated with the Chinese Wine Phenomenon? Expert Jeannie Cho Lee says to expect to see more Chinese Women involved in the process. “Women will play a greater role in both the wine trade and on the consumer side. More women are buying wine, and within the trade, there are more female sommeliers, wine CEOs and executives emerging in Asia. Look at markets such as Japan, where women are one of the most significant buyers in the Japanese market. As the wine market matures in Hong Kong and China, this will happen there, too.” Another change? Women may be leading the way to more White Wine Consumption in China as report after report indicate that it’s more common now to see women ordering White Wine with their fish.
Additionally, some analyst believe that the great Chefs in Wine Country might experience a change too! With travel, and more exposure to other cultures, many expect to see more cross over from Japanese inspired dishes with wine pairings, to a fusion with Chinese ingredients like sea cucumber and abalone. Who knows, it might be a hot topic at November’s Flavor! Napa Valley™, November 17-20!
Thought it might be interesting to check on the Harvest news around the world and see how Wine Country is stacking up.
Virginia: Since Donald Trump purchased a vineyard in VA recently, it’s been getting a ton of publicity – unfortunately the early reports indicate that they’ve got some problems. Recent rains could be diluting the 2011 vintage of Virginia wines. Excessive rain can cause grapes to swell with water and dilute the juice used to make wine. Keswick Vineyards has had more than 12 inches of rain in the last week and a half.
New York: They’ve certainly had a “roller coaster” in 2011. They had an unusually wet spring which gave way for some parts of NY to arid conditions over the summer. Then, depending on where you were located, you got drenched by Tropical Storm Irene. 2010 was a great year for Vineyards in NY, and I’m sure for some, if not most, 2011 will be a good year too.
Oregon: The Oregon Wine Board surveyed a number of Oregon wine growers and found that vintners are optimistic about the 2011 vintage. They say the warm late summer days and the lack of precipitation over the last two months has buoyed their confidence. Growers say they’ve caught up from a late spring start and could have the largest yield since the early 2000′s. Harvest is expected to get under way in mid-October.
Italy: Heat at the end of August caused much of Italy to be forced to harvest early. The severe heat and drought in the second part of August, caused plant stress that greatly lowered yields. The Italians also pulled up of over 9000ha this year to reduce overall wine production. Because of the early harvest, and the reduced number of plants, the 2011 harvest is expected to be 10-25% down in terms of quantity.
‘The Italian 2011 Harvest will probably be at an all-time low’ in terms of quantity, according to harvest reports just released by UIV (Unione Italiana Vini) and ISMEA (Istituto di Servizi per il Mercato Agricolo Alimentare).
France: They have their own traditions and rules – which have not been followed this year. Traditionally, the associations of vintners in a wine region set an official start to the harvest with “la levée du ban des vendanges” or the end to the harvest ban, which has its traces in the Middle Ages. The ban allowed individual wine growers to benefit from the combined wisdom of a region in setting the harvest date, usually 100 days after the first flowering in the vineyards. For the past few years, it has not been upheld in all regions.
A dry spring, a wet start to summer, which has eased into more clement seasonal conditions and warm temperatures persuaded some vintners to start harvesting in late August, while others have bided their time, measuring grape maturity with modern science and old-fashioned chewing and tasting.
California: We are just beginning our harvest seasons here. Typically the Sparkling wines grapes are picked first, and then it progresses to the larger reds. 2011 is expected to be a Good Harvest for California, Napa Valley Wineries, and Sonoma Vineyards.
Buying a piece of History in Wine Country, Fiji Water announced it will purchase it’s second vineyard and winery from Landmark in August 2011. Landmark was founded in 1974 in Windosor by Bill Mabry. Damaris Deere Ethridge (of the John Deere Tractor family) was one of the original investors. She took control of Landmark in 1989 and moved the firm to Sonoma Valley and built a winery.
Michael Deere Calhoun (her son) and his wife Mary joined the company in 1992 as her partners, and the couple became the face of the winery. They were able to hire wine consultant Helen Turley and winemaker Eric Stern. This team of Turley and Stern helped improve the quality of the wine, and The Overlook Chardonnay has appeared on Wine Spectator‘s Top 100 list six times.
The Calhoun’s have no children, and so there was not a “legacy” transition for them to retire. They sold to Fiji Water (owned by Roll Global) in part because it gave them that exit opportunity. They will not be staying on, however winemaker Greg Stach will continue to work with the new owners.
Sonoma’s Landmark Vineyards, has always been known for high-quality Chardonnay, Pinot Noir and Syrah. The new owners will continue purchasing grapes beyond the 11-acre vineyard Landmark owns with grapes from several well-known vineyards, including Heintz, Kanzler, Sangiacomo and Bien Nacido. Roll plans to continue with the current contracts, and possibly expand the brand, which makes about 20,000 cases a year. “Look, we’re farmers at heart,” said owner Stewart Resnick. And indeed, Roll currently owns Pom Wonderful pomegranate juice, flower delivery service Teleflora, Paramount citrus, which grows and sells fresh citrus, and Paramount Farms, which does the same for almonds and pistachios.
Roll Global also purchased Justin Vineyards at the end of last year. Resnick said that the Fiji sales force will be able to sell the wine side of the business too. “There’s a lot of good wines around. But the problem is that people don’t know how to get them to market,” said Resnick. “We think we’re good at getting them to market.” It’s a good business to be in!
If you are interested in purchasing a vineyard in Napa or buying a winery in Sonoma Valley, call Mark Stornetta at 707-815-8749. I also represent many homes with land and small vineyards in California. Connect with me on Facebook, Twitter or Yelp!
The Crimson Wine Group expanded it’s offerings of California Wine with the purchase of Seghesio Vineyards. Crimson also owns Pine Ridge Vineyards in Napa’s Stags Leap District, Chamisal Vineyards in Edna Valley and Archery Summit in Oregon’s Willamette Valley. With the purchase of Seghesio Vineyards, they will own of California’s high quality Zinfandel specialist. Membership to Seghesio’s Centennial Club is considered a matter of prestige by the inhabitants of Healdsburg and guarantees access to the winery’s library (premium) selections.
The winery was reported to be producing approximately 100,000 cases annually. Their website highlights that general bottle sales are between $28 and $60 a bottle. Although the purchase price was not disclosed, it’s pretty easy to see that this was a significant sale based purely on EBIT.
According to Wine Spectator, the sale includes the Healdsburg winery, the more than 100 year old Seghesio brand, 300 acres of vineyards and the current wine inventory. Unlike some of the other sales we’ve seen recently, most of the Seghesio Family members associated with the winery will stay on board.
“It’s an incredible offer but it was still a difficult decision, a bittersweet decision,” said CEO Pete Seghesio. “Every Italian family gets into fights and we don’t want to be one of those families. The family is united on this. It has been an incredible ride, but we want to go out on top.”
Seghesio started as a “less than premium” jug wine maker – but was able to refine it’s production. In the last 15 years Wine Spectator reviewed 92 wines of their wines - 30 were rated 90 points or above.
The sale is part of a growing trend in Northern California, as longtime winemaking families increasingly opt to sell out in the face of global competition, increased consolidation of distribution channels and the strain of succession issues and inheritance taxes.
Those are among the concerns that led to the sales of the Sebastiani family’s winery in 2008, Stag’s Leap Wine Cellars and Duckhorn in 2007 and Robert Mondavi Winery in 2004.
What are we doing to identify winery properties without brands and have the potential to produce $100/btl wines? We are networking throughout the Napa Valley to source potential wineries that may be for sale. These properties are not easy to find, so we ask for your patience. If you are interested in purchasing Premium Winery in the Sonoma/Napa Region call Mark Stornetta. 707-815-8749
Many of the buyers interested in California Wine Vineyards are also looking at “unimproved” land that might be suitable to start a vineyard, as opposed to purchasing one that is already established. We find that these buyers are generally in one of 2 camps. Either they are looking for a “Deal” and feel that they can start small, and grow a presence – or they are already Vintners, looking to expand.
