I find the timing of this very interesting. It’s interesting that the McWilliams will continue with the brand. It seems like the parents wanted to pull money out of the brand so they could retire (reading between the lines here a bit based on the article). Who bought it was makes it interesting. I’m sure Young’s/RNDC is seeing the head winds of the California wine market, so they are making what I have to imagine is a large capital investment at this time? I’d be curious to ask “why now?” Given all the data of declining consumption and the very crowded market for premium Pinot Noir, I’m wondering what the strategy is?
buy low, Gallo made all of their strategic investments the last 3 years when the market was softening and interest rates were high as they very likely did not finance any of the purchases
But is this the low point?
I think we are pretty close, I don’t believe trying to time it perfectly would yield a larger return when things bounce back. I’m not nearly as pessimistic about the wine market as other folks, I think a lot of it is done to temper earnings expectations for publicly traded companies.
1 Like
I would think that it’s a pretty good time to invest in vineyard - and possibly brands - at this time. I can’t believe anyone is selling now unless they need to, so deals can be had. I’d watch for Foley and Gallo especially to jump in - or KJ if we are talking brands more than vineyards.
Curious to hear more of your thoughts @Ian_Dorin - and would love to hear what @Adam_Lee has to say as well.
Cheers
If there is an assumption that “things will get better”, why would you sell at or near the bottom to monetize for retirement?
The market is solid for good brands with a real consumer identity (Arista, for example, if they wanted to sell the brand) and ultra premium vineyards.
The market is weaker for production vineyards and winemaking facilities.
Vertically integrated wine companies are a mixed bag and very specific.
It may not appear to be a good time to sell, but that assumes the future will be better in an acceptable time frame.
1 Like
the belief that we are near the bottom doesn’t mean we see improvement over a short term horizon, we could be down here for several years and if you are really wanting to retire or at the mental and emotional limit it may be worth it to just bite the bullet
2 Likes
I don’t read that much wine criticism any more, but I look at it really differently than most when I do read it.
I’m looking at price point, and production. Arista wines are not cheap, and as the article notes, is making 6,000 cases. I know they have a marketing company (Wilson Daniels) selling the wines, but I feel like they are at the higher end of the price point too,.
I look at wines by varietal (since most stores do it that way). and when you consider the large swath of the west coast producing Pinot Noir, and how much of it is north of $50 a bottle, it’s a huge amount of wine. That’s including Central Coast right on up through Oregon. How much $80-$125 Pinot can sell through?
I was looking at a Vinous review of just Sonoma. All the single vineyards wines were $75+, and everyone has 6+ Cuvees they are making. Some wines I was shocked by the production, for wines that many consider “rare”.
I think Pinot Noir is over saturated in the market place, and the prices (much like Cabernet) have gotten way too high.
The categories I see the most closeouts on are Cabernet and Pinot Noir.
2 Likes
Figure 2024 vintage wines will hit the market in 2026-2028 (depending on how bag logged producers are), and those will be a tough sell.
That will dampen the market till closer to the end of the decade in my mind.
it might not drop any further, but will certainly suppress the market for an extended period.
I know it’s not Pinot Noir, but keep in mind, Carlisle is still without a future owner.
I don’t disagree, I think there will be a pricing reset as inventories compound and wineries will go out of business and the herd will be culled a bit. I think it brings us back to pre-covid pricing before things got out of hand.
1 Like