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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 | Q2 2023

Premium focused wine transactions continued to represent the majority of wine M&A.

Reflecting on activity during the second quarter of 2023, we summarize recent findings and reflect on previous outlooks on Wine M&A.

In the U.S.:

As we highlighted in our 2022 Summary + 2023 Outlook, while we recognized 2023 M&A activity would be slower, transaction volume would remain steady, which has held true.  A few of our more specific thoughts about 2023 at the beginning of the year included:

  • A+ Brands with excellent assets & strong cash flow will still transact.  It would be hard to find a better example of this than the acquisition of Stags Leap Wine Cellars by Marchesi Antinori.  The generationally focused deal included Antinori purchasing the remaining 85% interest in Stags Leap Wine Cellars from short-term focused PE group Sycamore Partners.

  • Premium vineyards in desirable locations are still in demand.  The iconic Savoy Vineyard, labeled as “One of Five California Vineyards You Need to Know” by the Wall Street Journal, was acquired by Donum Estate.  Just one example of continued activity at the premium luxury end of the market.

  • Route to Market will continue to evolve and drive further DTC and wholesale platform M&A.  The acquisition of Wine Warehouse by Breakthru Beverage Group (BBG) was recognition that the dynamics of the industry continue to evolve.  This acquisition expanded BBG’s footprint to the largest beverage alcohol market in the U.S. and was their 3rd over the prior 12-month period (the other two including, Missouri and Minnesota).

GLOBALLY:

The theme of activity in the premium and luxury market was evident globally as well.  Examples in the first half of 2023 included Ruffino’s acquisition of vineyard acreage in Italy’s luxury wine region of Bolgheri, Château Lafitte Rothschild’s acquisition of Domaine William Fèvre in Chablis and Bollinger’s acquisition of Château d’Etroyes in Burgundy.  Of additional interest was Jackson Family Wines investment in the UK Essex’s Crouch Valley.

International investment in U.S. luxury properties continued at a notable pace as of the 17 select transactions noted to date, five were funded from companies with foreign ownership.

We believe the theme’s we highlighted above will continue or potentially accelerate throughout the remainder of 2023.

Patrick DeLong