$900 million purchase by Treasury
I would go ahead and start a separate thread with this is the headline, my friend. I’ll let you do it 
I moved to a new thread
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that’s a bunch of dollars
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Estimates are that Daou sells between $15 and $30 million in wine a year…why pay almost a billion dollars?
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I think it would be interesting to find out what comes with the sale. When Gallo acquired Rombauer they got 3 productions facilities, 2 tasting rooms, and 750 acres of vines in Carneros/Napa. A 33% multiplier on revenue seems steep, but the brand is growing significantly, so maybe the trajectory pays for itself in 5 years, just not sure shareholders are going to be keen on that timeline to get the ROI.
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I attended a Daou wine dinner with the winemaker and one of the owners once, and the net of it is that’s about my least favorite winery on earth.
And I’m not really given to much negativity in my wine hobby.
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I’ve been to the tasting room a couple of times as I was visiting nearby, other, tasting rooms and I also went to a Taps wine dinner featuring Dao when Taps used to host some outstanding wine dinners from their chef who was amazing! The Dao family owners were nice but my impression of their intended customers tilted to the in-crowd, rich, wannabe experts. The majority of their wines were okay with the exception of their top cuvee which was pretty good but not worth the tariff. They trended radically upward in sales so I’m sure Treasury crunched the numbers.
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Good pickup by TWE. Hottest brand and hottest region in the USA.
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hmmm… what’s your metric?
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The whole thing is just absurd
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I had the Pessimist from DAOU once. I can confirm that it was hotter than a shot of cask strength bourbon.
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I like to imagine that in 10 years someone will make a post about drinking a 2019 Soul of a Lion amd we’ll jump in and be like “ah, back before they sold, good stuff!”
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2022 Hot Impact Brands.
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The only bottle of wine I’ve ever poured down the sink after first sip.
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Unfortunately, I was not in the vicinity of a sink.
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I bought a bottle of their Sauvignon Blanc in Costco recently. It was $13.
A few of their offerings were on restaurant lists in Cabo last year.
So maybe volume distribution is the play. Wouldn’t he surprised if they moved outside Paso for grapes to hit mass price points. The next Meomi?
I’m not surprised by the sale price. Daou is huge. Bigger than most people realize. Working ITB and watching the brand rise over the past decade… it’s been impressive to watch.
“In addition to Decoy, several other above-$15 wine labels earned Hot Brand honors, among them Sonoma-Cutrer and Daou Vineyards. Daou has almost doubled in size since 2019 to approach 600,000 cases. Situated on a 212-acre hilltop estate in the Adelaida District of Paso Robles, Daou is known for Cabernet Sauvignon and other Bordeaux varieties.”
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The acquisition, which is expected to be completed later this year, includes the Daou brand, Daou’s 600-acre mountain estate, four wineries and 400 acres of vineyards in Paso Robles.
https://www.sfchronicle.com/food/wine/article/daou-wine-sale-18458215.php
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Seems like a really big number - 1 billion dollars - about what constellation paid for mondavi almost 20 years ago. I haven’t had their higher end wines but the basic wine isn’t any better than any other paso wine. They have grown remarkably - it’s an amazing story.
600000 cases - even at 250 dollars a case that is only 150 million in revenue - assuming a 50% margin (which I am guessing is generous) that is still only 75 million of Net Income. Given current economic conditions (risk free rate of 5 %) they must assume a continued huge growth trajectory - like doubling in the next 3 years.
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