Napa a Buyer’s Market
Tennessee-based Sapphire Brands is on a mission to acquire ten California wineries over the next five years. The June 2 issue of Forbes reports that Jeff Hopmayer, ceo of Sapphire, is “prowling California’s wine country” for candidates. He needs a production level of at least 1 million cases a year to gain leverage with distributors, he tells Forbes, and bigger buyers like Constellation and Brown-Forman. His currently produces 500,000 cases.
It’s a buyer’s market today in the wine biz, as an over-abundance of wineries and expensive land in Napa and Sonoma will lead many owners to sell. As many as 51% of family-controlled wineries will change ownership in the next ten years, according to a recent report by Silicon Valley Bank. If the next generation isn’t interested in taking over, new owners (roughly 20%) may come into the picture.
In addition, “aging vineyard owners” are finding it difficult to compete in the new wine industry and are increasingly interested in selling. Micro-brands, says the article, “have seen their pricing power and ability to demand shelf space trickle away.” Competition from the large and more established wineries (roughly 5,000), wine imports and distributors makes it difficult to get shelf space. Instead, boutique wineries rely on wine clubs, tasting rooms and direct-to-consumer sales.
“In the coming selloff,” says Forbes, “only wineries that offer a full portfolio of varietals--from pinot noir to cabernet franc--in quantities of at least 100,000 cases annually will be attractive acquisitions (see table).”
BRUNELLO PRODUCERS SCRAMBLING TO COMPLY
As we reported earlier this week, the TTB is banning all bottles of Brunello not accompanied by lab results proving its authenticity. Brunello can only be made with Sangiovese, but Italian police opened an investigation last month when some of the region’s top producers were accused of using grapes grown elsewhere. Starting June 9, the TTB will impound all Brunellos without a certificate after Italian authorities failed to provide the U.S. with a list of guilty producers.
One of the main concerns for importers and exporters of Brunello is that innocent producers are not penalized. Brunello producers will have to scramble to comply with the TTB, since no one is really expecting the often bureaucratic Italian government to quickly provide a list of innocent and guilty winemakers.
Marone Cinzano, the president of the group of Brunello producers, said winemakers will “act rapidly” to conduct lab tests and provide certificates, although it will be a difficult process.
WSD has also learned that the TTB is taking the situation seriously and there could even be some consequences for Brunellos already imported into the U.S. As you can imagine, the fine wine shops and restaurants are rather upset about the situation.
FRESH & EASY LOOKIN’ UP
Despite rumors that Tesco’s Fresh & Easy concept in the U.S. is failing, new evidence shows it is, in fact, booming. A report in the Financial Times earlier this week reported on a consumer survey taken by Executive Research in the U.S., which is not affiliated with Tesco.
Executive conducted interviews with 700 customers outside Fresh & Easy stores in Las Vegas, LA and Phoenix, and nearly 9 out of 10 said they would “highly recommend” Fresh & Easy. Traffic as the stores is between 20 and 30 people an hour.
According to the report, F&E has not yet hit its goal of “dollars spent” per store, but is projected to do so as time goes on.
WSD BRIEF:
THE CHIEF EXECUTIVE OF VIRGIN ISLANDS RUM, John deJongh, is in Paris this week to discuss the future of Cruzan rum with Pernod management. Pernod recently gained ownership of Cruzan when it acquired V&S earlier this year. Cruzan has changed owners several times over the past decade and deJongh is eager to secure a long-term agreement.
Until Monday, Megan
“It is impossible to defeat an ignorant man in argument.”
William G. McAdoo
--------- Sell Day Calendar ----------
Today's Sell Day: 12
Sell days this month: 22
Sell days this month last year: 23
This month ends on a: Fri.
This month last year ended on a: Thurs.
YTD sell days Over/Under: 0
WINE & SPIRITS DAILY
Subscribe or check back issues at: www.winespiritsdaily.com
Send news and comments in confidence to: megan@winespiritsdaily.com
© 2008 Wine & Spirits Daily, all rights reserved. May quote with attribution.
It’s a buyer’s market today in the wine biz, as an over-abundance of wineries and expensive land in Napa and Sonoma will lead many owners to sell. As many as 51% of family-controlled wineries will change ownership in the next ten years, according to a recent report by Silicon Valley Bank. If the next generation isn’t interested in taking over, new owners (roughly 20%) may come into the picture.
In addition, “aging vineyard owners” are finding it difficult to compete in the new wine industry and are increasingly interested in selling. Micro-brands, says the article, “have seen their pricing power and ability to demand shelf space trickle away.” Competition from the large and more established wineries (roughly 5,000), wine imports and distributors makes it difficult to get shelf space. Instead, boutique wineries rely on wine clubs, tasting rooms and direct-to-consumer sales.
“In the coming selloff,” says Forbes, “only wineries that offer a full portfolio of varietals--from pinot noir to cabernet franc--in quantities of at least 100,000 cases annually will be attractive acquisitions (see table).”
BRUNELLO PRODUCERS SCRAMBLING TO COMPLY
As we reported earlier this week, the TTB is banning all bottles of Brunello not accompanied by lab results proving its authenticity. Brunello can only be made with Sangiovese, but Italian police opened an investigation last month when some of the region’s top producers were accused of using grapes grown elsewhere. Starting June 9, the TTB will impound all Brunellos without a certificate after Italian authorities failed to provide the U.S. with a list of guilty producers.
One of the main concerns for importers and exporters of Brunello is that innocent producers are not penalized. Brunello producers will have to scramble to comply with the TTB, since no one is really expecting the often bureaucratic Italian government to quickly provide a list of innocent and guilty winemakers.
Marone Cinzano, the president of the group of Brunello producers, said winemakers will “act rapidly” to conduct lab tests and provide certificates, although it will be a difficult process.
WSD has also learned that the TTB is taking the situation seriously and there could even be some consequences for Brunellos already imported into the U.S. As you can imagine, the fine wine shops and restaurants are rather upset about the situation.
FRESH & EASY LOOKIN’ UP
Despite rumors that Tesco’s Fresh & Easy concept in the U.S. is failing, new evidence shows it is, in fact, booming. A report in the Financial Times earlier this week reported on a consumer survey taken by Executive Research in the U.S., which is not affiliated with Tesco.
Executive conducted interviews with 700 customers outside Fresh & Easy stores in Las Vegas, LA and Phoenix, and nearly 9 out of 10 said they would “highly recommend” Fresh & Easy. Traffic as the stores is between 20 and 30 people an hour.
According to the report, F&E has not yet hit its goal of “dollars spent” per store, but is projected to do so as time goes on.
WSD BRIEF:
THE CHIEF EXECUTIVE OF VIRGIN ISLANDS RUM, John deJongh, is in Paris this week to discuss the future of Cruzan rum with Pernod management. Pernod recently gained ownership of Cruzan when it acquired V&S earlier this year. Cruzan has changed owners several times over the past decade and deJongh is eager to secure a long-term agreement.
Until Monday, Megan
“It is impossible to defeat an ignorant man in argument.”
William G. McAdoo
--------- Sell Day Calendar ----------
Today's Sell Day: 12
Sell days this month: 22
Sell days this month last year: 23
This month ends on a: Fri.
This month last year ended on a: Thurs.
YTD sell days Over/Under: 0
WINE & SPIRITS DAILY
Subscribe or check back issues at: www.winespiritsdaily.com
Send news and comments in confidence to: megan@winespiritsdaily.com
© 2008 Wine & Spirits Daily, all rights reserved. May quote with attribution.
posted at 12:06 PM
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