North Bay Business Journal

YOUNTVILLE, SANTA ROSA – Goosecross Cellars, the boutique luxury winery located in Yountville, has been sold to Golden Equity Investments, a private equity firm located in Golden, Colo., that was formed in 2011 to provide equity capital to privately held, middle market companies. The transaction included the 11-acre estate winery and vineyard property, tasting room and contemporary Tudor-style estate home. Zepponi & Company, the wine industry mergers and acquisitions advisory firm for ultra-premium, luxury and estate wine brands and vineyards, served as the exclusive financial adviser to the owners of Goosecross Cellars. Financial terms were not disclosed.

The record-sized winegrape harvest of 2012 hasn’t crushed demand building over the past year for wine producers to lock in fruit supplies and places to turn it into higher-end wines that have been enjoying a resurgence in sales.

It is becoming increasingly more difficult for small wineries to navigate the business terrain in light of the continued consolidation that is taking place among wholesalers, and the escalating operating-cost structures that have resulted from a supply shortage of grapes and bulk wine.

Before jumping ahead with the purchase of a large acre estate, it is essential to assess the marketplace and strategy for your potential brand.

The Business Journal’s 2013 Wine Industry Conference in April will feature the general manager of Fetzer Vineyards and the architect of its acquisition by a large Chilean wine company as well as insights on North Coast wine-related mergers and acquisitions from two of the largest players in the market recently.

William “Bill” Price III, co-founder of private investment company TPG Group and a financier of North Coast wineries such as Kosta Browne, purchased the 138-acre Gap’s Crown pinot noir and chardonnay vineyard in the Sonoma Coast appellation east of Rohnert Park.

Real estate and corporate attorney Mario Zepponi started Zepponi & Company as a wine industry mergers and acquisitions consulting practice.

Mr. Zepponi will be part of a panel discussion at the Impact Napa 2012 conference the morning of Aug. 30. He spoke with the Business Journal about the rapidly changing landscape for wine M & A.

If we review sales activity over the past 18 to 24 months, we can see how the role of foreign investment in the U.S. wine industry has evolved. Broadly speaking, there are three general categories of foreign investment in the United States wine market from which to gauge activity.

Wine consumption is growing worldwide and particularly in the world’s new largest wine market, the U.S. Trouble is, shocks to the global economy and to the wine business in particular over the past several years along with tough growing seasons have dramatically limited the supply of grapes and wine sold in bulk to supply the thirst.

The Business Journal asked members of the 2012 Wine Industry Conference panel on grape and wine supply panel at the about some of the hotly discussed topics in the wine business in California.

After nearly 10 years of oversupply and low prices, California winegrapes and bulk wines are suddenly in a position of scarcity. Wineries are scurrying to find grapes and secure vineyard assets, while négociant wineries see their wine sources dwindling. How did we come to be in this situation, and what lies ahead for growers, wineries and consumers?

NAPA — Not enough winegrapes have been planted in California, leading to a shortage of fruit for wine in the next several years, so growers and wineries should be actively working together to boost that supply, according to two major industry experts.

Unless the global and U.S. economies weaken, wine industry experts predict 2012 could be the year of the vineyard, considering a number of fine wine producers have worked through ample inventories, wine sales continue to grow and few new vines are going into the ground.

In another expansion move by Portugal-based Amorim Group cork distributors in Napa Valley this year, Amorim Cork America purchased 3.36 acres of land between Devlin Road and Highway 29 just north of Napa Valley Gateway Business Park. Pedro Fernandes, general manager, declined to comment on plans for the property. Industry sources point to the property [...]

Mario Zepponi is one of three principals of Santa Rosa-based Zepponi & Company, which counsels wine industry clients on mergers and acquisitions as well as corporate strategy. His background as an attorney includes structuring lease and sale agreements. He was part of the Impact Napa conference panel on Sept. 1 and spoke on how well the wine business, particularly in Napa County, has weathered the global financial storm and the outlook for mergers-and-acquisitions activity. The Business Journal asked him about the impact of the economy on industry operations, valuations and deal prices.

Increased wine mergers and acquisitions activity anticipated this year likely won’t be dominated by troubled-finance sales, according to one of the experts at the Business Journal wine business conference Thursday.

There is much anticipation within both the wine industry and greater financial markets that 2011 will see a noticeable increase in dollars being spent both at the consumer level and in acquisition activity. In anticipation of such activity, it is appropriate to explore the widely varying motivations, expectations and investment time horizons of the five groups of historically active acquirers in the wine industry.

The business of making ultrapremium and luxury wine may be reaching a turning point after almost three years of heavy competition for consumer dollars.

NOVATO — One of the results of Diageo Chateau & Estate Wines’ recent sales of wine assets is providing corporate alcoholic beverage brand creator Winery Exchange with a line of its own products.

North Coast “marquee” wine labels and cash-flowing brands and other assets are more dominant in the deals getting done these days than discount transactions on troubled assets, according to a top wine industry transaction adviser.

NAPA — The Business Journal will host its annual Impact Napa Conference on Aug. 18 featuring a regional overview by highly sought-after economist Chris Thornberg as well as presentations from local experts on issues important to Napa businesses, including wine, tourism and the vitality of downtown Napa.

The event will be held Wednesday, Aug. 18 at the Meritage Resort in Napa. Registration begins at 7:30 a.m., and the program runs from 8:00 a.m. to 11:00 a.m. Tickets are $45 per person or $450 for a table of 10 (with company name on sign). To register, contact Linda Perkins at 707-521-5264 or events@busjrnl.com by Aug. 13, or go to www.NorthBayBusinessJournal.com.

NORTH BAY – Steve Carlin, founder and chief executive officer of Oxbow Public Market, and Mario Zepponi, winery and investment broker at Zepponi & Company, will be among the presenters at the North Bay Business Journal’s Impact Napa conference on Wednesday, Aug. 18 at the Meritage Resort in Napa.