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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.

 
 
 
 

Wine M&A Summary | Q1 2023

Despite Macroeconomic Headwinds, Early 2023 Wine M&A Was Active With Luxury Wine Companies Purchasing Vineyards in Desirable Locations.

As we highlighted in our 2023 M&A Outlook at the beginning of the year, buyers, in particular those who operate in the high value range of the wine business, still have strong interest in premium vineyards in desirable locations.

What we did not anticipate in our 2023 Outlook was the rapid collapse of Silicon Valley Bank (SVB).  As has been highlighted in many other reports, this had nothing to do with the SVB Wine Division. We have received a myriad of inquiries about the implications of this for Wine M&A. Our view is noted below in the context of other macroeconomic considerations.

Year to date, of the eight select transactions noted in our attached summary, seven were buyers who own wineries in the luxury segment of the wine business and all eight transactions were vineyard only. This is a significant difference when we compare activity in Q1 of 2022 which included multiple winery and wine brand transactions, highlighted by the acquisition of Napa Valley icon Shafer Vineyards.

Of the eight highlighted wine M&A transactions in Q1 2023, the geographic breakdown of targets was spread across Napa Valley, Sonoma, the Central Coast and Oregon.

In addition to the SVB news, macro-economic headwinds around inflation, interest rates and slowing demand are all impactful, in particular in the more commercial segment of the wine business. That said, and as evidenced so far this year, luxury wine companies are still seeking quality growth opportunities. While time will tell, we believe the themes highlighted here and in our 2023 Outlook are still valid as it relates to US Wine M&A activity.

Patrick DeLong