Luxury Wine Market Reeling

Peter Creasey

Peter Creasey

Peter Creasey
From the Wall Street Journal...

Many of America's high-end wineries are reeling from the economic downturn, as even wealthy drinkers slash spending on fine wines.

The slump comes as Americans continue to drink more wine overall. Recession-weary consumers, however, are buying more mid- and low-priced wines, causing a sharp falloff in sales of wines priced at $25 a bottle and higher.

The shift is pinching the profits of luxury vintners in Napa and Sonoma counties and forcing many to cut prices and seek new distribution channels. Some hard-hit wineries have quietly put themselves up for sale. There is likely to be "a lot of M&A activity in the short-term," says Mike Jaeger, president of Wilson Daniels Ltd., which helps luxury winemakers market their products.
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To view the whole article --> http://online.wsj.com/article/SB124700844235408441.html

. . . . . . . Pete
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I would agree that our sales in the $20+ is where the big drop has occurred. We're selling as many bottles as before but gross sales are down. A new winery without any big time PR that is selling above $30.00 is absolutely dead in the water. Needs a 100+ review from the Earl of Monkton to sell in this market.
 
"boom period for high-end wines fueled by Americans' rising wealth "

Oops, WRONG. What he meant to say was, "rising PERCEPTION of BEING WEALTHY" as asset bubbles inflated and consumers took on significantly more debt.

The wine biz should be prepared for a permanent reset rather than a resumption of bubble era spending.
Unless of course a new bubble is engineered...
 
I've heard a rumor that there are M&A talks all over the Loire right now and that one respected house has hired an investment banker well known in these parts to explore acquisitions of "under-valued brands" in the region or even a reverse merger with a bigger house that is underperforming, multiples being way off their historic norms. Also, groups of natural wine growers have been seen congregating at restaurants known as dealmaking venues. Could get interesting!

Of course, this could just be the typical internet rumor mongering.
 
originally posted by Scott Kraft:
I've heard a rumor that there are M&A talks all over the Loire right now and that one respected house has hired an investment banker well known in these parts to explore acquisitions of "under-valued brands" in the region or even a reverse merger with a bigger house that is underperforming, multiples being way off their historic norms. Also, groups of natural wine growers have been seen congregating at restaurants known as dealmaking venues. Could get interesting!

Of course, this could just be the typical internet rumor mongering.
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I heard Luneau-Papin is coming out with Muscadet4U.
 
originally posted by Brad Kane:
originally posted by Scott Kraft:
I've heard a rumor that there are M&A talks all over the Loire right now and that one respected house has hired an investment banker well known in these parts to explore acquisitions of "under-valued brands" in the region or even a reverse merger with a bigger house that is underperforming, multiples being way off their historic norms. Also, groups of natural wine growers have been seen congregating at restaurants known as dealmaking venues. Could get interesting!

Of course, this could just be the typical internet rumor mongering.
Click to expand...

I heard Luneau-Papin is coming out with Muscadet4U.
Click to expand...

And Clos Roche Blanche is doing Deux Euros Roussels.
 
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