Got this email. Never had Qupe, but enjoyed a lot of Andrew Murray.
“We’re Bringing it Back Home”
Winemaker Andrew Murray Acquires Historic Syrah Producer Qupe
We at Andrew Murray Vineyards are excited to share the news that we recently completed the acquisition of storied, legacy wine brand Qupé – a brand that has focused on cool climate Chardonnay and Syrah since its inception in 1982. We look forward to sharing these amazing wines with you one day soon. Until then, please seek them out at your favorite restaurant and retailer as the wines are available in nearly all 50 states. We founded Andrew Murray Vineyards in 1990 just next door to where Qupé was born, in Los Olivos along Foxen Canyon Road. We have long admired their commitment to sustainability, quality and affordability…all values held dearly by our family. We are so proud and honored to add our own shine to Qupé and to bring these wines into their 4th decade and beyond. Stay tuned for more exciting news soon!
Read more about this historic acquisition here. https://www.andrewmurrayvineyards.com/qupe
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We discussed this a little in the thread about Vintage Wine Estates. I’ve always liked Qupe. It was a great QPR. I just opened a magnum of their 2012 Syrah and it was excellent. I can’t speak for the stuff that VWE made after buying it, as I hear they turned it into a quasi-supermarket wine. So there may be an interval of Qupe wines to stay away from, with the before and after WVE being the wines to look for.
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The Qupe label is now back in good hands under Andrew. Unfortunately, he’s lost a lot of grape sources Bob built up. We’ll see where he takes it.
Tom
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I know he’s working to get some of those back - and he’s very excited about working with and making chardonnay, a wine that Bob made quite a bit of but Andrew has not concentrated on in the past. That said, I think he’s most excited about the rhone varieties that Bob has been so instrumental in producing for such a long time - and hopefully Andrew will be able to get back some of his epic blocks, including those from Bien Nacido . . .
Cheers
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Some great Roussannes back in the day!
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General question, please. Applies to more than this case. Why would an established producer/brand (such as Andrew Murray) acquire another brand (such as Qupé) that is in many ways duplicative of what the primary brand does? Not questioning the move per se. But, thinking out loud, why wouldn’t Andrew Murray simply do the purchase to acquire vineyards, long term contracts, other strategic elements? And fold these into the Andrew Murray brand? Would not running Qupe detract from building his own brand?
I can see where maybe someone acquires a brand for a second child to run or something like that. But isn’t it hard enough running and marketing the main brand? Why take on more? The wine world is rife with stories of winery owners wearing themselves out not only making the stuff but trying to move it in the market(s).
Again, only trying to understand what positives this has for the acquirer. Knowing that each case has its specifics. No two have the same rationale.
It’s simple…wine is the one of the riskiest purchases a consumer will make at a grocery store or restaurant. Established brands like Qupe have long been in front of the consumer and were pioneers in the Syrah space so Andrew is making the bet that that brand recognition will get him placements at restaurant and retail he can’t get under Andrew Murray brand…the simple fact of the matter is Qupe has 20X the brand recognition of AM and brands matter more than ever in downturn environments like this where consumers seek to mitigate risk of purchase. I think this is smart move for him.
I should add I am huge Andrew fan…he was probably the only winemaker back in the 00’s that would admit to the press that he sold me wine!
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To make sure I am processing this correctly. “Andrew is making the bet that that brand recognition will get him placements” means Qupé and not Andrew Murray. If so, then that means the Qupé placements create cash flow that ultimately (a) pay for the Qupé brand acquisition and/or (b) funnel excess cash to the Andrew Murray brand. Or is the play that the Andrew Murray brand rides the coattails of the Qupé brand and thus gets more placements?
I’m a schmuck who works in the wine industry for peanuts not a finance guy like 99% of of our clients. But doesn’t this boil down to an issue of leverage? How much exposure did Andrew Murray take on to bet that Qupé would pay off in and of itself a well as benefit the Andrew Murray brand downstream?
If it doesn’t pan out does this potentially take down the Andrew Murray brand? Note that I am highly risk averse which drives the question. For a good seven years before I got married I had one credit card with a $500 limit. Forced me to behave. Wife is diametric opposite, hah.
Yes, Qupe will get the placements. Andrew is liked in the biz and will be seen as a better steward of the brand, certainly on-premise.
IIRC, the inventory had a book value around $2.7MM and he paid $500K so he’ll likely dump some of the older or under performing inventory to generate cash and get in the black…but nothing’s easy in this environment…if all goes to plan, he gets a lower priced but more volume driven brand that adds mass to his enterprise and further buffs his credentials in the Syrah/Grenache/Rhone world. Even if he ends up dumping the inventory, he should be able to pay off the debt (if there is any) and be none the worse off from a consumer standpoint, they’ll have no idea he owned it…that all assumes the inventory book value is correct.
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And here was I wondering;
“what the hell is a retired Scottish tennis player doing buying a CA winery”?
Such is life living outside USA!
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