Winery/Vineyard/Distillery Acquisition - Anyone been there, done that? Questions.
Greetings BP Community:
I love being challenged in this crazy world of real estate and business investments. I know and have met quite a few awesome individuals via LinkedIn. I invest in small businesses and real estate. I usually invest/develop with partnerships. I also actively do Brokerage throughout all Washington State (mainly Commercial & Multi-Family asset classes). This is my background and knowledge which brings me forward to the current and purpose of my post. I have assembled a team (of four, including myself) and we are buying an off-market winery, vineyard and distillery. We have just reached mutual agreement via a couple rounds of LOI's being sent around and are now having our attorney draft a APA and Operating Agreement while we start due diligence. The winery is located in Washington State, as am I (just north of Seattle) while my partners all live in California near Napa/Sonoma area. They really all have no knowledge of the real estate world but do have skills in marketing, wine making and running wineries. I believe we've assembled a great team. The winery currently looses a little over $100,000 a year (without debt service). As I am more the financially minded one of the group, I am working (in conjunction with their expertise) to figure out a 3-5 year plan to turn profits. This is a very difficult task and if anyone else has been through an exercise like this before, I would LOVE to speak with you. Also, if anyone has any thoughts on our due diligence process which you wish you had known or done differently, that never hurts either!
Thank You Much!
Zach,
Sounds interesting. I have a friend who is an author and specialist in Washington wineries. He might have some ideas. I would be happy to introduce you if it was of value.
Best,
Walter
Walter - That would be amazing! Will shoot you an email.
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#2 All Forums Contributor
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having lived in Napa ( Silverado CC) were many winery owners lived and I played golf with them for years... The wine business is a very very tough one.. Distributorships are key. Along with sales and marketing there are thousands of labels out there hundreds upon hundreds of good wines.. I like most of them by the way.
I take it your buying something out in Yakima or walla Walla I love the wine that comes from that region.
Money is made when wineries are sold... and when if your lucky your brand gets nationally renouned and some other player with lots of money comes in and buys you.
My business partner for years was president of Beringers and took it public and sold it to Fosters.. He did very well obviously being the president of the largest wine company in the US.. but he made his fortune taking it public and selling it.
Its a labor of love a great industry full of really great caring people and there is real comroderie between winery owners at least that is what I experienced. When we played golf on Sat.. we had president of Beringer.. comptroller for Chalone Etc etc.. The Mondavis came over and played tennis...I could go on but you get the drift they all talked about the bizz with reverence and were great people.. good luck with it.
@Jay Hinrichs Thank You, Jay. It's an exciting venture. The current owners did not originally purchase it to run the winery, but rather had to adjust to market conditions when 2008 hit. They didn't loose it, so I give them credit for improvising; however, they don't want to be in the wine business. It will be a labor of love and were paying cash so we won't have debt killing us. I need to get away from the computer more often and tending to a winery/vineyard seemed like an appropriate answer. Currently, everything is sold via tasting room so I believe many opportunities for expansion.
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#2 All Forums Contributor
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Good luck with it were is it Yakima Walla Walla are you going to relocate and get out of the rain?
@Jay Hinrichs It's actually located on the west side of the mountains, but most of the wine is made on the east side :) I love the rain and snow! My hobby is hiking when others aren't out on the trails (the pups can just run free)!
Sell online the following;
Wine of the month club.
Holiday themed wine gift baskets with cheese,crackers, etc these can make a fortune locally and online. So Halloween, Thanksgiving, religious, New Years , Valentines, Easter, Memorial Day, Mothers Day, Fathers Day, July 4th, Labor Day.
3 price points for the packages like $80, $160, $200. I remember one little store in Hollywood that used to make 50k just in gift baskets during xmas - pre internet.
Private label runs for organizations, clubs, bars, restaurants, golf courses etc..
Then all the traditional distributors large and small nationwide.
@Zach Schwarzmiller hope your journey has gone well, i would like to revive this forum and follow up on how your journey has unfolded, the goods and the bads. Some of the challenges you have encountered and any advise for a hopeful vineyard/winery owner? THanks alot!
@Daniel A Lee Kim - it ended up being a bad partnership, and we did not close. Wish I had still purchased it, the underlying land value today would have been fantastic. I kept investing in CRE instead and that has been good. Wish I had more to tell you! I planted a vineyard on one of my properties, but its very young and I don't tend to it very well. Just make sure you have good partners is what I can really stress. Best of luck to you!