I guess my answer would be that the USA has always been highly receptive to wine from all over the world, in supermarkets, wine stores and restaurants.
You might be right, maybe they’ll be a smashing success internationally. I can’t really visualize it myself, but maybe it depends on which markets they’re targeting.
You and I can revisit this in a few years.
Price, for one thing. Part of the appeal of YT and its subsequent ilk was extremely low price point, riding a wave of love for fruity juice. “Cracking the code” at a much higher price point, even if low for us, will certainly be tougher. Not saying it can’t be done, but skepticism is also fair.
I suspect they see plenty of room for domestic growth as well to hedge any bet on international markets. Maybe a vacuum in the $20-30, easily recognizable cab category as brands like Clos du Val and Martini continue to inch upwards?
Agreed. They threw a lot of money at that brand from the get go, on many levels, but that’s not sustainable which is why I think they got out when they did. I definitely think Treasury overpaid.
Oh, I never said they’d be a success! I’m saying they likely are certain they’ll be…. 
Fair point! But Daou also probably has better margins than the cents-per-case of a YT, so they don’t need as much of a success to push the product thru their established channels.
I guess my general point is that I bet they thought thru nearly all of the questions that we hear on this board are posing, and answered them to a level of satisfaction.
I guess that is the basic qualification to be added to the Treasury portfolio.
Hey, Buick has sold well in China, and American Tourister luggage – which was moderately priced stuff in America a couple of decades ago – became high-end in Europe.
“Gain or loss, what is worse?”
- Daou Cha-Ching, Chapter 44
Daous are a lot easier to fakes than Buicks though.
75 x 12.8 = 960.
I agree with Chris and some of the others, but think about brands like The Prisoner or Meiomi. To me they’re similar in that having had each of them once, I never wanted to revisit the experience. But big and gloppy seem to be big sellers.
That $1B seems insane but maybe with Treasury’s backing, they can justify it in a few years. Still it seems like a pretty speculative number. But I’m wondering about the real estate - is any of it likely to be suitable for commercial development rather than wine? Like hotel, golf course, and all the things that will destroy Paso?
That could be. The price would make more sense if it’s true.
Not sure where that came from?
Sounds way off. As someone else noted, they make 600,000 cases.
It is worth noting that Paso is over 3 hours from the Ontario airport, LAX and SFO, not sure if there is even passive tourism available. It would have to become a true destination area, which I just don’t see.
That deal was for less than $700 million.
And that Mondavi deal cleared a huge amount of debt too, so they couldn’t monetize the way that they could have.
That’s for Treasury to deal with
But it’s also not far from a lot of destination spots like SB, Ojai and Carmel.
Upthread it said $75MM EBITDA times a 12.8 multiple, $960MM
7.2MM bottles would have to avg a net profit of $10.42 per bottle. I have no idea of their avg price billing price but it would have to be above $50 to achieve a $10 per bottle EBITDA
It’s rapidly becoming one, or already is.
it’s completely leapfrogged Santa Barbara County, despite that being much closer to LA and making better (imo) wine.
If my statement is incorrect, someone feel free to correct me.
Here’s a $1.5M 3/2 house which looks nice but isn’t anything extravagant.
32 days on the market though, maybe priced a bit high?
I didn’t spend much time on that and I’m not a Paso real estate expert; I just thought some people might not realize how expensive that area is getting.