VALUATION AND M&A SERVICES FOR WINE & CRAFT BEVERAGE
The global wine and craft beverage industries have gone through unprecedented upheaval over the last five years. A global pandemic, wildfires, and changing climate conditions have produced a convergence of unrest for most and record growth and profitability for others. 2021 saw a frenzy of consolidation within the wine industry driven by brand acquisition and foreign investment into new growing regions. Bigger players continued their expansion into all categories of craft beverage to provide balance to a portfolio of products meant to mitigate risk with unpredictable consumers. As a result, for sellers, the benefit of having professional valuation and M&A representation has also never been greater.
BUSINESS VALUATION SERVICES
Exit Strategies Group provides business valuation services to company owners looking to gift, bring in or move away from an equity partner as they plan for their eventual exits. Our wine and craft beverage team is led by Joe Orlando, who has over 15 years of craft beverage valuation experience for tax, financial reporting, buy-sell, strategic and transaction-related purposes. With a growing portfolio of valuation work within the wine, beer, cider industries, Joe offers a strong and fundamental service to business owners as they navigate the next chapter of their business.
INVESTMENT BANKING SERVICES
Exit Strategies Group provides sell-side merger and acquisition (M&A) advisory/investment banking services meant to facilitate and realize these eventual exits. Our Wine & Craft Beverage M&A team is led by Tony Westfall, who has over 15 years of wine industry operating experience and over 10 years of M&A experience. Roy Martinez, with over 10 years of similar experience focuses on valuation and M&A for companies with products and services related to the wine industry. Few investment bankers have as strong operation knowledge and industry relationships as Tony and Roy.
For those clients looking to sell their business, our Wine & Craft Beverage team:
- Understands your personal needs, goals, and priorities;
- Evaluates your company’s market value, transaction readiness, and strategic alternatives;
- Helps prepare your company for a sale or recapitalization (or acquisition*);
- Prepares a compelling confidential offering memorandum;
- Identifies and contacts multiple buyer candidates;
- Generates interest and orchestrates a competitive bid process;
- Negotiates the best possible deal terms for you and your stakeholders; and
- Guides you and your team through the due diligence and closing phases of a transaction.
*Buy-side services include validating your acquisition strategy, finding and selecting target companies, approaching and screening candidates, identifying synergies, valuation, negotiating a letter of intent, introducing debt and equity providers, and guidance through the diligence and closing process.
WINE & CRAFT BEVERAGE OUTLOOK
Macro trends driving the wine and craft beverage space include the increased strength of the direct-to-consumer (DTC) model that dominated sales for most ultra-premium and premium wineries. In 2021, DTC sales reached a record $4.2 billion in sales with a 1.4% increase in shipments of 8.5 million cases but a jump of 11.8% in the average price per bottle to a record $41.16. Larger wineries with lower price points saw only modest gains while states like Oregon saw an increased volume by 12.9% and Kentucky increased shipments to the state by approximately 245% with a full year of impact from a new DTC shipping law.[i]
While the overall beer industry has gone through a transformation with the emergence of hard seltzer and ready-to-drink (RTD) mixed drinks and shifting tastes from younger consumers, the craft beer space has remained steady through the pandemic.[ii] Consumers “traded-up” for premium and craft beers which, along with imported beer, did not see volume losses in 2020 with gains in 2021 expected from a steady increase in volume coupled with a sharp increase in prices (including grain, hops, and aluminum cans) to combat significant inflation of costs due to continued supply chain issues.[iii]
WINE & CRAFT BEVERAGE MARKETS SERVED
- Exit Strategies Group provides M&A advice, valuation, and investment bank services to family wineries, breweries, cideries, agricultural landowners (vineyards, orchards, fruit and nut farms), virtual wineries, craft beverage distributors, and other craft beverage-related service providers.
- Past clients have included family-owned wineries (with and without vineyards), craft brewers, cideries, and service providers across the supply chain.
Joe Orlando, ASA, Vice President of Business Valuations and Wine & Craft Beverage Team Leader, 503-925-5512
Anthony Westfall, M&A Advisor, 707-981-0444
Roy Martinez, CBB, CVA, M&A Advisor, Business Broker, and Business Appraiser, 707-781-8583