Wine Quarterly Q2 2021: The Valuation Gap Between Winery Buyers and Sellers in the US Wine Market

While some large, high-profile deals have been closed in the US wine market recently, there has also been a notable shortage of deals for smaller wineries, in spite of the challenges brought about by Covid-19. For smaller wineries, there appears to be a significant gap in valuation expectations between buyers and sellers. This gap will eventually work itself out, as these things do. But while some sellers may benefit from a measure of patience, the potential for ongoing challenges in the on-premise, coupled with the threat of a significant rise in capital gains tax, could see more value lost from waiting too long.

Report summary

In terms of M&A, the recent acquisition of Ponzi Vineyards LLC by Societe Jacques Bollinger (where Rabobank acted as the advisor for Bollinger) is an excellent example of the increased cross-border M&A activity that we predicted in our last report. We also note the increasingly important role that tech deals are playing in the wine industry and explore this in more detail. 

Sustainability issues continue to move into the mainstream of the wine industry, and we note a growing appetite at all levels to seek viable solutions. In this vein, Sustainable Wine will be hosting its first ever Future of Wine Americas conference in June. The conference will consist of a number of panel discussions with high-profile panelists grappling with a variety of relevant, practical questions, and promises to be a thought-provoking event.

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