US Vineyard M&A Activity: 2015 - 2017

One of my highlights of Christine Wente’s guest lecture was her focus on how Wente Vineyards has managed to keep the business “in the family” despite (theoretical) opportunities for acquisition by larger player in the wine industry. One of the follow-on questions to this asked how many smaller vineyards opted to not keep their businesses “in the family”. Since Christine didn’t have exact numbers on the spot (who really does?), I decided to dig into some wine-related M&A data for this week’s blog post.

Over the past three years (1/2015 – 12/2017), there have been 131 acquisitions in the U.S. wine industry, ranging from owner-operated vineyards to tour guide companies to wholesale distributors. Narrowing this field down to purely vineyard operators and wine producers whittles this total down to 43. 

While there is not a slew of financial data surrounding these acquisitions (as most of them are private), 9 public transactions closed for a total of $976M, driven primarily by Constellation Brand’s acquisitions of Meiomi Wines (2015), The Prisoner Wine (2016), and Charles Smith Wines (2016).

As to be expected, the top three acquirers over this period were all in the Top 10 of global wine producers – E&J Gallo Company (6), Jackson Family Company (6), and Constellation Brands (4). However, outside of these larger players, vineyard M&A appeared to be more focused on one-off transactions – only three vineyards were involved in more than a single M&A event from 2015 – 2017, bringing the total number of independent acquirers during this period to 27.

Given the continued growth in US wineries and sub-20 yearly acquisition totals, it’s safe to say family vineyards aren’t facing a wave of mass consolidation quite yet. That being said, the increase in US wine consumption as well as the rise of many “niche” players over the past few years may spark more creative expansion strategies that I’m particularly looking forward to diving into over the rest of the quarter. 

Data Sources:

1. M&A Activity: Pitchbook. [Criteria: Deal Date: From: 01-Jan-2015, To: 31-Dec-2017; Deal Option: Search on a full transaction; Deal Type: M&A/Control Transactions; Keywords: "wine" OR "wines" OR "wineries" OR "vineyard" OR "vineyards" OR "cellar"] 
2. US Winery Data: Wines & Vines. [https://www.winesandvines.com/template.cfm?section=widc&widcDomain=wineries&widcYYYYMM=201512]