Bank report says winery owners want to cash in on their major asset.
Want to buy a winery? Here's your chance. The owners of more than 10 percent of wineries on the U.S. West Coast are hoping to sell within the next five years. This would put more than 500 wineries on the market, according to a report issued this week.
And the report's author, Rob McMillan, executive vice president of
Silicon Valley Bank's wine division, says that's a good thing.
"This was a real cottage industry," McMillan told Wine Searcher.
"This industry has to evolve, and the only way is not to go to the next
generation, but to bring in new lifeblood."
McMillan said winery sales are good for the quality of American wine.
"It takes generations to get to the point where you understand
terroir," he said. "Where you understand what clone goes with what soil.
It takes generations, but it also takes tremendous investment."
The report is a follow-up to one from 2008 in which 51 percent of
wineries said they were planning to go through an ownership transition
within the next five years.
In 2008, the reasons for selling were often negative. The economy was
tanking, and many winery owners were tired of spending so much time
trying to sell wine around the country after distributors severely cut
back on the number of brands they handled.
This time, McMillan says, the number of owners planning to exit is a
sign of strength in the wine industry. Asset prices are high, and he
sees "better business plans."
Before the late 1990s, winery sales on the West Coast were rare
because "the dominant issue for business success was simply making good
wine. If you made it, you could sell it," the report explains. Potential
buyers "had cash and could simply start new wineries instead of buying
existing ones."
Today in Washington
state, 18 percent of wineries are likely to go on sale, higher than
anywhere else on the West Coast. This would put nearly 100 Washington
wineries on the market.
Napa County is second at nearly 15 percent, followed by Sonoma County at 13 percent. The most content owners are in Santa Barbara County, where only 5 percent are likely to sell.
The size of the winery is a big factor. About half the wineries up
for sale make fewer than 5000 cases a year; many may be hobbyists with a
home on the premises.
That said, wineries producing between 10,001 and 25,000 cases are most likely to sell (more than 12 percent).
At this level of production, a winery is usually too big to sell all
of its wine through its tasting room or wine club, but too small to have
much clout with wine distributors.
Source: http://www.wine-searcher.com/
"This was a real cottage industry," McMillan told Wine Searcher. "This industry has to evolve, and the only way is not to go to the next generation, but to bring in new lifeblood."
McMillan said winery sales are good for the quality of American wine. "It takes generations to get to the point where you understand terroir," he said. "Where you understand what clone goes with what soil. It takes generations, but it also takes tremendous investment."
The report is a follow-up to one from 2008 in which 51 percent of wineries said they were planning to go through an ownership transition within the next five years.
In 2008, the reasons for selling were often negative. The economy was tanking, and many winery owners were tired of spending so much time trying to sell wine around the country after distributors severely cut back on the number of brands they handled.
This time, McMillan says, the number of owners planning to exit is a sign of strength in the wine industry. Asset prices are high, and he sees "better business plans."
Before the late 1990s, winery sales on the West Coast were rare because "the dominant issue for business success was simply making good wine. If you made it, you could sell it," the report explains. Potential buyers "had cash and could simply start new wineries instead of buying existing ones."
Today in Washington state, 18 percent of wineries are likely to go on sale, higher than anywhere else on the West Coast. This would put nearly 100 Washington wineries on the market.
Napa County is second at nearly 15 percent, followed by Sonoma County at 13 percent. The most content owners are in Santa Barbara County, where only 5 percent are likely to sell.
The size of the winery is a big factor. About half the wineries up for sale make fewer than 5000 cases a year; many may be hobbyists with a home on the premises.
That said, wineries producing between 10,001 and 25,000 cases are most likely to sell (more than 12 percent).
At this level of production, a winery is usually too big to sell all of its wine through its tasting room or wine club, but too small to have much clout with wine distributors.
Source: http://www.wine-searcher.com/
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