AGR part of $75m investment in California wine company

Vintage Wine Estates chief executive expects partnership with AGR will mean greater access to grapes owned by Westchester.

Vintage Wine Estates, a privately-owned wine company headquartered in Santa Rosa, California, has secured $75 million from a group of investors including food and agribusiness-focused AGR Partners.

Vintage Wine Estates president and chief executive Pat Roney told Agri Investor that TIAA-affiliated AGR joined two existing shareholders in the investment.

Roney said AGR’s investment included both purchasing an unspecified minority equity stake in the company and providing it with debt, though he declined to disclose any details.

AGR did not provide further detail by press time.

Established in 2008, Vintage Wine Estates produces close to two million cases of wine marketed under about 30 brands through wholesale, direct-to-consumer, tasting rooms, wine clubs, online and other sales channels. The company’s offerings include wines aimed at both consumer and exclusive brands and capital from AGR’s investment will be used to support future winery and brand acquisitions.

“AGR has a strategic relationship with investors on the vineyards side,” Roney added in reference to TIAA’s agriculture-focused affiliate Westchester, which he said owns a 25,000-acre wine grape portfolio that makes it the fifth-largest vineyard owner in the US. “We buy currently from some of them and we expect to have greater access to their grapes.”

AGR, which maintains offices in Chicago and Davis, California, teamed with TIAA Global Asset Management to launch a $600 million agribusiness fund in March 2016. The investment vehicle, called TGAM Agribusiness Fund, had raised at least $292 million as of August, according to a pair of regulatory filings shown then.

In March, AGR chief executive Ejnar Knudsen told Agri Investor that generally the firm looks to produce mid-teens to 20 percent returns through investments of between $25 million and $200 million into businesses with at least $100 million in revenue. A market source told Agri Investor in August that the TGAM Agribusiness Fund’s strategy calls for the use of both debt and equity in backing family-owned, mid to upstream processing businesses.

“They go in and look for family-run businesses that may not meet the traditional debt criteria of lenders and will come in and take that extra risk in exchange for warrants, which will transmit into minority ownership once the debt is repaid,” the source explained.

Last month, Cascadia Capital chief executive Michael Butler told Agri Investor how millennial-fed demand for locally-sourced products is leading to a convergence of agriculture and beverages that lead to his firm’s partnership with Los Angeles-based sector specialist First Beverage Financial.

Butler said  family offices were  active investors in wine with their operations beginning as a “labor of love” before  growing to the point where they seek outside capital.

“We think that wine is starting to consolidate, that there’s going to be a lot of activity in the wine sector,” Butler said.

AGR has invested $280 million over the past four years, according to its website, assembling a portfolio that includes hard-boiled egg provider Almark Foods, pet-food ingredient specialist 3D Corporate Solutions and Icicle Seafoods, a diversified seafood company headquartered in Seattle.

In September, AGR vice-president of food and agribusiness investments Shane Masters left the firm to take a position with French agribusiness investor Unigrains.