Delicato Family Vineyards of Napa has made a significant equity investment in Sonoma’s V2 Wine Group operated by Dan and Katy Leese, according to a Tuesday announcement, taking over the ownership portion from entrepreneur Pete Knight.
Delicato, the seventh largest winery in the United States, has been on a tremendous growth spurt in recent years, increasing by 1 million cases last year to an overall total of 9.2 million, according to Wine Business Monthly.
The investment gives Delicato a greater toehold into the wine market in which bottles are priced at $20 and more. V2 works with eight family wineries, including Healdsburg’s Dry Creek Vineyard and La Follette Wines, to better market and distribute their premium products nationally. Terms of the deal were not disclosed.
In return, Delicato — given its size — can help V2 navigate in an increasingly cutthroat wine wholesaling business that makes it hard for small vintners to compete on retail shelves or in restaurants.
Last year, Southern Wine & Spirits of America merged with Glazer’s Inc. to create the largest wine and spirits distributor in the country. More consolidation is expected within the industry, making it harder for wineries with small accounts to get noticed.
“These distributors have gotten so big,” said Dan Leese, whose company has about 30 employees. “Together we are stronger…. We have a very complimentary portfolio.”
Delicato has been an under-the-radar vintner during its recent run. In 2003, it was the 13th largest domestic wine company through the work of four generations that have operated the company since 1924. The growth has been driven in large part by its Bota Box label, which now accounts for 5 million cases, and has been popular given the wine is sold in environmentally friendly to-go boxes.
It has ventured into the premium market, most notably with the 2010 purchase of the Black Stallion Winery in Napa Valley. In January, it won approval from the Napa County Planning Commission for its proposed Sam Jasper Winery on Silverado Trail, a 10-acre property that will produce up to 20,000 gallons of wine annually.
“Consumers today are more confident in their wine choices, given how fast information flows today. Because they are more confident, they readily experiment and gain wine knowledge quickly,” said Chris Indelicato, president and chief executive officer of Delicato, in an email. “As a result those varietal types with pronounced and distinct flavors will do well. We like to call these the sophisticated varietals. Grapes like sauvignon blanc, pinot noir and cabernet sauvignon will outperform.”
You can reach Staff Writer Bill Swindell at 521-5223 or email@example.com.
This story originally appeared at pressdemocrat.com/business/6750055-181/delicato-takes-ownership-stake-in.