Monthly Archives March 2021

Duckhorn Wallet Represents An Outright Luxury Wine Opportunity As Pop Stock

Through Jarrett Banks and John jannarone

California wine producer Duckhorn Portfolio Inc. (ticker: NAPA), backed by private equity sponsor TSG, saw its market capitalization exceed $ 2 billion on the first day its shares were traded on the New Stock Exchange. York. The shares opened at $ 18.60, a pop from the IPO price of $ 15.

The company, founded in 1976, is the largest supplier of pure luxury wine and the 11th largest supplier of wine by overall sales value in the United States. Duckhorn is based in St. Helena, in the center of the Napa Valley wine region.

“We are working hard to perfect the blend of business and art in winemaking,” said President, CEO and Chairman of the Board Alex Ryan. IPO Edge in an interview on Thursday. “We remain focused on luxury and are interested in many companies to join our family of brands. “

President, CEO and Chairman of the Board Alex Ryan

The company has such a long history of growth, with sales up 500% since 2010. By 2021, revenues are expected to increase 13% from the previous year to $ 307 million, according to Renaissance Capital.

Duckhorn sells its wines in all 50 states and over 50 countries at $ 20 to $ 200 a bottle under a portfolio of brands including Duckhorn Vineyards, Decoy, Goldeneye, Paraduxx, Calera, Migration, Canvasback, Greenwing, Postmark and in 2018 acquired the American Pinot Noir Kosta Browne winery. It now includes 600 acres of vineyards in California and Washington, four winemaking facilities and three visitor centers.

Mr Ryan said he was proud of the way the company handled the twin challenges of the California wildfires and the Covid pandemic.

“We are well diversified in the way we manage our supply chain,” he said. “We have the flexibility you need when you need to react to changing farming conditions. “

A major selling point: luxury wines have strong margins and Duckhorn’s financial data confirms this. The company has Ebitda margins of almost 40 percent, considerably higher than a spirits company such as Diageo.

“When you come to our sites, you come out as an evangelist,” Ryan said. “We delight our old customers and add new ones at a price that makes them feel special. “

Duckhorn sets itself apart from other companies such as Altria Group, Inc. and Constellation Brands, Inc., which own some wine assets, but not enough to have a significant impact on overall financial performance.

An important part of Duckhorn’s growth story will likely be mergers and acquisitions. The wine industry is extremely fragmented and there may be opportunities to take advantage of Duckhorn’s distribution platform when it acquires other wineries.

“There is an impressive amount of great producers out there,” Ryan said. “There are a lot of exciting regions that we are not yet in.”

Mr. Ryan has spent his entire career with Duckhorn and will remain at the helm as the company begins its life in public markets.

Contact:

Jarrett Banks, Editor-in-Chief

IPO-Edge.com

[email protected]

Twitter: @IPOEdge

Instagram: @IPOEdge



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Launch of a luxury wine wall with robotic arm and “virtual sommelier”

A new luxury wine wall that includes a ‘virtual sommelier’ and a robotic arm to select and deliver the bottle of your choice via a glass hatch has been launched by WineCab.

Credit: WineCab

The visually striking design is sure to add a stunning architectural feature to an upscale restaurant or the luxury home of a serious oenophile and wow guests with its seamless robotic action, selecting and serving the bottle of your choice for you and your business.

“Whether enjoyed at home, in an upscale restaurant / bar, or wherever you can imagine, your wine collection will always be at your fingertips thanks to WineCab’s sensory technology,” states a list of products. on the WineCab website.

The wine wall design is open to various customization options, although WineCab says each system will include a built-in AI system that acts as a “virtual sommelier”. He will offer food and wine pairing suggestions, as well as personalized recommendations and search capabilities based on his preferences.

With prices starting at $ 179,000, WineCab’s wine walls are quite in the high end of the market price. The systems are temperature controlled and offer the “optimum humidity range for wine storage” according to a list of websites.

Security features include facial recognition to give access to its wine collection, motion sensors to detect unwanted movement and the ability to lock individual bottles as desired.

If you’re interested in the WineCab system, you can find out more – and join the waiting list – here.

Elsewhere in the luxury market, the Italian jewelry brand Bulgari is teaming up with the champagne house Dom Pérignon for the release of a 2004 rosé champagne in limited edition.


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The Treasury sells wine brands in search of profit

The huge wine producer is leaving the basement of bargains to focus on the more lucrative part of the wine market.

By Liza B. Zimmerman | Posted Saturday 13-March-2021

Wine conglomerate Treasury Wine Estates (TWE) has sold four low-end American wine brands to The Wine Group (TWG) for $ 100 million as the company continues to focus on its premium brands and results.

The quartet of brands, sold on March 10, includes Beringer Main & Vine, Beringer Founders’ Estate, Coastal Estate and Meridian. The harsh tariffs imposed by the Chinese market on Napa-based TWE brands – particularly the company’s Penfolds label – have prompted the wine company to rethink its brand lineup and marketing approach in the U.S. market.

The recent rebranding of the brand did not surprise most analysts in the US wine industry. “In the case of TWE, the industry has been waiting for some time for the sale of the under $ 12 segment in the United States to occur,” notes Mario Zepponi, wine merger and acquisition advisor at Zepponi & Company, based. in Santa Rosa. .

The TWE-TWG deal, notes Stephen Rannekleiv, global beverage sector strategist at Rabobank in New York City, was a good opportunity for TWE to take advantage of these specific brands as they play in a less than premium segment. He adds that the price was also right. “I guess both companies are happy with the deal they got. There wasn’t a long line of people who could take these marks.”

While it’s “hard to assess value, but I’m sure the Treasury sees it positively from a reported earnings perspective and The Wine Group sees it positively from a cash flow perspective,” adds Jon Moramarco, Napa-based managing partner of bw166, a beverage industry analyst.

TWE Americas President Ben Dollard called the move a “mutually beneficial sale,” adding, “We look forward to allowing our team to focus on driving our priority brands for the business, including Beringer. , Beaulieu Vineyards, 19 Crimes and Penfolds. “

A closer look at the deal

TWE executives say the deal will allow them to better focus on their high-end brands. “As part of our TWE Americas strategy, we continue to focus on our luxury and masstige brands, while refining our wine business,” said Dollard. The adjective “masstige” – long used by TWE – strikes a balance between mass and class and commands a premium over conventional products while being far inferior to super premium products, according to the. Harvard business review.

Dollard adds that at the same time, TWE “will continue to build momentum on our masstige and luxury levels with the release of 19 Crimes Snoop Cali Red… and on the luxury level with the release of the Penfolds California collection”.

The California-based TWG – which has more than 60 brands including Franzia, Cupcake, Chloe and Trapiche – is the second-largest wine group in the United States, according to WineBusiness.com. The group was an ideal buyer for these four brands because the company has long specialized and skillful in the marketing of low-end wine brands.

TWG declined to comment for this story and TWE provided a press release confirming the sale and that TWG would acquire existing inventory from all four brands. TWE CEO Tim Ford said in the statement that the agreement “will be mutually beneficial in the long run for our respective organizations. For TWE, this transaction is an important step towards our delivery plans [TWE’s vision of] future state [of the] in the premium wine business in the United States and we can now focus only on continuing to grow our premium brand portfolio to drive future performance in the Americas. “

A sale that makes sense

TWE has long wanted to focus on its premium brands and the recent blows the company has suffered in the Chinese market have clearly prompted it to change its sales setup in the US market. Zepponi says TWE has been hit by “a double whammy with slowing sales in the United States and political fallout with China and Australia.”

Since the company’s standoff with China has accelerated interest in changing its US portfolio, Zepponi notes that TWE “wanted to make quick decisions about the US portfolio.” Selling to TWG makes sense because the company “isn’t afraid of these low-cost brands and actually has a good place for them,” he concludes. “It’s a win-win for both parties.”

“The Treasury has made no secret of its desire to concentrate on the wines they call ‘masstige'”, notes Moramarco. “Usually these brands are in decline, so they are holding back the growth of revenue and profits for a public company.” The benefits for TWE, in the case of this sale, “are similar to the benefits of the Constellation deal with Gallo,” he adds.

TWE has long struggled to balance its operations in the United States for some time, add both Rannekleiv and Zepponi. At times, according to Zepponi, they seemed to rebalance it, but again, the brand mix tilted like a pinball machine. So getting rid of brands that don’t suit them will help them “free them up in the future to add brands that will help them be successful,” says Rannekleiv.

Morocco agrees. “Treasury will find it easier to devote more time to the brands it wants to focus on. However, it could make personnel adjustments with the loss of gross profit.”

The Gallo affair

There are similarities to Constellation Brand’s $ 810 million sale of its low-end brands to Gallo which was announced in April and completed in January of this year. “There is a tendency for listed companies to sell their low-end portfolio. These brands are not as attractive and will not show growth for shareholders,” Rannekleiv shares. By comparison, “a private company can view these acquisitions as very profitable.”

On the flip side, a bigger stable of brands should benefit TWG in the long run, according to a handful of analysts. This acquisition will also help TWG maintain its relevance with retailers, adds Rannekleiv. In addition, TWG manages “the cheapest brands very well”. He adds that the purchase is also “an interesting opportunity for the TWG to consolidate its role in the value segment of the market”.

Given the recent wave of IPOs and SAVS – an acronym for a special purpose acquisition company that is publicly traded and has no assets other than cash – including Vintage Wine Estates which is expected to close in May; and Duckhorn, a company that just declared its intention to go public, some wonder if the sale is the precursor to a larger merger with TWE.

Only time and the ever-changing wine market conditions will tell.


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Cheapest supermarket in Asda for popular wine brands, but best in Sainsbury for fancy deals

EXCLUSIVE: A study by Who? found drinkers can save up to 22% on premium labels knowing where they are sourcing with Waitrose charging 22% more for a popular brand

Wine drinkers can save money on their favorite drink (file image)

Wine lovers looking to save money on their favorite drink can sniff out the best deals at Asda, a watchdog has revealed.

A study by which? found the supermarket to be the cheapest for 60% of popular plonks such as Barefoot and Gallo.

According to research, drinkers can save up to 22% on premium labels by being as savvy about where they are sourcing as they are from their drink.

For example, Casillero Del Diablo Sauvignon Blanc was priced at £ 6.96 at Asda but was 16% more expensive at £ 8.10 at Waitrose.

Gallo Family Vineyards Summer Rose cost Asda £ 4.24, but Waitrose 14% more with a bill of £ 4.85.

What is your point of view ? Give your opinion in the comments section







Barefoot Malbec – £ 4.24 at Asda and £ 5.50 at Waitrose







And the Barefoot Malbec cost £ 6.15 from Asda but £ 6.89 from Waitrose, which was the most expensive supermarket, according to the study.

While Asda was best for popular brands, Sainsbury’s was best for cherry picking deals on chic labels.

For research, award-winning New Zealand wine Brancott Estate Sauvingnon Blanc was £ 7.41 at Sainsbury’s, but £ 9.01 at Waitrose, a 22% difference.

Morrisons was named the city’s toast for overall deals with 17% of its price cut at one point and 22% of the range at bargain prices between November and December of last year.








Casillero del Diablo Sauvignon Blanc – £ 4.24 at Asda and £ 5.50 at Waitrose
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Picture:

Handout)








Connoisseurs looking for deals on wine varieties such as Pinot Grigio and Cabernet Sauvignon can buy wine for under £ 4 from Lidl discounter, Which? noted.

For just £ 3.80, wine lovers can buy a chain bottle of Tempranillo with Merlot for £ 4.38.

And buyers can put a bottle of Syrah in their baskets for £ 4.01 at Aldi and buy a Cabernet Sauvignon for £ 4.98.




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Who? said: “Discounters Aldi and Lidl generally do not have deals on their wine range, preferring to keep prices low all year round.”

The consumer watchdog analyzed the prices of 382 bottles at Tesco, Asda, Morrisons, Sainsbury’s and Waitrose supermarkets, Aldi and Lidl discounters, and the Ocado online store and looked at 10 of the most popular wine varieties.




Natalie Hitchins, Home Products & Services Manager at Which? said: “Our research has found that some of the UK’s most popular wine brands can vary in price by up to 22% depending on where you shop with Asda and Sainsbury’s being the cheapest.

“If the big brands aren’t important, wine enthusiasts can find a bargain at Aldi, Lidl or Morrisons, which were the cheapest supermarkets for own-brand bottles of the most popular varietals, such as Syrah and pinot grigio.


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Luxury wine wall with “robotic arm” launches

WineCab said its new luxury wine wall includes a “seven-axis high-speed industrial robotic arm”.

The technology is able to retrieve a good wine from the collection and deliver the bottle to the drinkers through a glass hatch.

The launch is another example of how fine wine displays have become increasingly popular in homes and restaurants.

Still, with prices starting at $ 179,000, the temperature-controlled WineCab caters a lot to the high end of the market and “serious wine lovers.”

A spokesperson said Decanter.com that orders have already been placed.

“There are several units for private clients in the design process,” she said, adding that the company is also working with two fine dining restaurants in New York City, in particular.

There is a waiting list for new orders and WineCab was working with a four month delivery time, she said.

Buyers can customize the wine wall design, but each has a “virtual sommelier” system installed that can offer advice on food and wine pairings, as well as personalized recommendations, WineCab said.

The new bottles are “robotically scanned” into Delectable, the cellar management app, the company said.

The system also has facial recognition security, which can “lock certain users’ important bottles,” said WineCab, which was founded by Chairman and CEO Mark Chaney, an entrepreneur and investor who previously founded Calvary. Robotics.


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