Vintage Wine Estates acquires California vineyard

AGR Partners-backed Vintage Wine Estates has acquired Laetitia Winery Estate, a 1,986 acre property containing 680 vineyard acres in central California, which it plans to use as a hub for its regional winemaking operations.

Financial terms were not disclosed for the deal, which, in addition to the vineyards, includes a production facility, tasting room, guest house and Laetitia’s inventory.

Located within the Arroyo Grande AVA in southern San Luis Obispo County, California, the Laetitia property also contains 20 acres of lemons. The 287 of its vineyard acres that are currently planted produce 35,000 cases of Pinot Noir, Chardonnay and sparkling wines annually.

Last April, TIAA–affiliate AGR Partners was part of a group of investors that acquired a minority stake in VWE for $75 million. VWE hired former AGR operating director Jeff Nicholson as its chief operating officer earlier this year.

VWE chief executive Pat Roney told Agri Investor that the company had first been made aware of the Laetitia property about two years ago by Zepponi & Company, an alcoholic beverage industry-focused mergers and acquisitions advisory.

“We passed on it the first few times, but ultimately decided to get engaged on it when the pricing got to where we thought it need to be,” said Roney. “It’s [wine] an industry where there is such a range of values, the gap between the buyer and the seller can be quite significant in these categories.”

Because many of the plantings on the Laetitia property are as much as 30 years old, Roney said, plans call for both planting the 383 vineyard acres not currently in production and replanting the 287 currently-producing acres over the next seven to eight years.

The previous owners of the property were focused on ultra high-quality wines and were willing to sacrifice some yield, Roney said. Whereas such acres should be capable of producing as much as four and half to five tons per acre, according to Roney, the grapes planted at Laetitia have seen their yields fall to between one and two tons per acre.

“Today, things have changed a lot, with technology,” said Roney. “What we know about vines is so much greater than it was 30 years ago.”

In addition, Roney said that VWE might pursue some residential development on some of the property’s remaining, non-vineyard acres.

In December, VWE acquired another winery in the region that Roney said it plans to re-locate onto the Laetitia property in order to utilize its 85,000 cases of winemaking capacity not currently being used.

“We’re focused on a roll-up strategy, so we consolidate everything,” said Roney. “The 60,000 visitors that come per year to Laetitia can now visit two other wineries at the same place.”