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Azur.I: Azur Intelligence

 

At Azur Associates, one of our key goals is to provide our clients with the up-to-date, insightful information and analyses they need to make the best decisions for their business.  We have two seasoned team members dedicated solely to this task.  While, of course, we can’t release full studies that are confidential to our clients, we enjoy sharing some highlights as well as perspectives on more public situations in the industry.  This is Azur.I: Azur Intelligence.

 
 
 
 

Azur Associates Wine Market + M&A Review | 2023 Summary + 2024 Outlook

In the wine market, 2023 was a story that mirrors overall consumer products right now. The pace and significance of consumer changes is more rapid and impactful on category trends than ever.

For M&A, 2023 was still very active in the market. Transaction value of $3B was largely driven by four “large” (>$250mm) transactions. While large companies were focused on adding brands they could market and sell more efficiently, luxury tier companies were focused on high quality vineyards.

2024 Wine Market Outlook - key points

Overall, the wine category is unlikely to return to growth. 

In the wholesale commercial segment of the category $15-$25 should show the most strength and sparkling wines will grow outside of Prosecco. Wholesalers and retailers will continue to manage inventory tightly which will impact scrutiny around new products as well as the ability to implement price increases. Favorable trends in better for you and certain white wines will continue.      

In the Direct-to-Consumer channel, trends from 2023 where growth was a challenge below $50 will continue and higher tiers better. 2024 will likely be the first year in decades that the number of wineries is likely to shrink.

2024 Wine M&A Outlook - key points

The M&A outlook reflects the accelerating bifurcation of the commercial and luxury tier segments. 

In the commercial segment, a “flattening” category will drive more M&A focused on efficiency, rather than growth and include increased activity from the suppliers and service providers (the “pick and shovel” makers). Some larger strategics will choose to pivot significantly to other parts of the beverage category.

There is still opportunity for high tier transactions, vineyards in particular, and the A+ brands with strong cash flow will always attract suitors and transact if the common understanding of value threshold is met. Some wineries that don’t transact will be rationalized, and how that happens will vary.

Details on these key points can be found in the Azur Wine Market + M&A Review | 2023 Summary + 2024 Outlook.

Patrick DeLong