May 25, 2022

By Lynda Kiernan-Stone, Global AgInvesting Media

Wine may not be the market powerhouse it was a few decades ago, but the industry came off a good year in 2021, according to the State of the Wine Industry Report 2022 issued by Silicon Valley Bank (SVB) Wine Division. And despite the understanding that COVID-19 will continue through 2022, SVB stated that that doesn’t mean the U.S. wine market will be materially restricted. 

Indeed, on a global basis, the worldwide wine market is estimated to have a value this year of $513.8 billion, and is expected to see a CAGR of 5.1 percent from 2022-2032 to reach a value of $846.3 billion by the end of that period, according to Future Market Insights. 

With healthy market forecasts pointing to sustained growth, the Duckhorn Portfolio has acquired the 289-acre Bottom Line Ranch vineyard in Paso Robles, California, for an undisclosed amount. Bottom Line joins Duckhorn’s existing holding – the 82-acre Calera winery at Mt. Harlan – establishing a significant presence on California’s Central Coast for the wine company. 

Established in 1976 when Dan and Margaret Duckhorn founded Duckhorn Vineyards in Napa Valley,  Duckhorn Portfolio is a premiere North American luxury wine company with 10 wineries, eight wine making facilities, seven tasting rooms, and more than 1,100 prime acres of vineyards spanning 24 estate properties.

Of the 289 acres at the Bottom Line Ranch property, 265 acres are planted exclusively in Cabernet Sauvignon, (featuring seven top clones on three drought-tolerant rootstocks), giving Duckhorn steady access to high-quality Cabernet Sauvignon for the foreseeable future, which will support continued growth for its Decoy and Postmark wineries.

“This acquisition follows our long-term strategy of supporting our wineries with robust Estate holdings,” said Alex Ryan, CEO and president, The Duckhorn Portfolio. “Adding Bottom Line Ranch’s 265 acres of Cabernet Sauvignon to our estate program will provide us with exceptional grapes for both Decoy and Postmark, while cementing our commitment to the Central Coast.”

¿Qué pasó?,  Robles

At the same time that Duckhorn announced its acquisition of Bottom Line, it was also announced that a new 22-acre business park complex is being created in Paso Robles with the intention of attracting winemakers and strengthening the local wine industry. 

“Given the growth of the wine industry with related leasing demand for modern, efficient industrial buildings combined with the strength of the overall industrial market, we believe there is a unique opportunity to provide customizable facility solutions on a build to suit basis for wine-related and industrial companies,” said Britten Shuford, co-founder and managing partner of PRG – one of the co-developers of the project. 

The sprawling 420,000 square-foot campus is the newest project to be co-developed  by PRG Investment and Management and NKT Commercial, who aim  to attract tenants connected to wine and industrial services, from warehousing, to wine production, and case good storage, with the developers building facilities to suit the particular requirements of each tenant’s business.

“It has been a real challenge for companies to find warehouse space on the Central Coast,” said Marty Indvik, president of Lee & Associates-Central Coast, which represented PRG in four separate transactions. “The void of new functional industrial buildings has limited growth for companies that already have a presence on the Central Coast and those that would like to open new operations in-County.”

Alex Ryan, CEO and president of The Duckhorn Portfolio, acknowledged how the Paso Robles community’s focus on promoting its winemaking industry has gained it global recognition.

“There is a reason why Paso Robles has the most Cabernet Sauvignon acreage of any appellation in California outside of Napa Valley,” said Ryan. “In addition to producing phenomenal Cabernet Sauvignon, the Paso Robles winemaking community has done a fantastic job of building global awareness for the region and its wines. Putting down roots in this acclaimed region is an important next step in our long-term vision.”

To optimize the quality of Cabernet Sauvignon produced on the vineyard (which Duckhorn plans to rename in the coming months), farming on the site will be managed by Duckhorn’s in-house viticulture team and vineyard manager Randy Heinzen and his company Vineyard Professional Services, which also manages production at Duckhorn’s Calera estate.

“For a Cabernet Sauvignon-focused vineyard of its size, location, vine age, and quality, Bottom Line Ranch is a rare find,” said P.J. Alviso, vice president, Central Coast Wine Growing. “In terms of row orientations, rootstocks and clonal selection, it has great fundamentals.”

~ Lynda Kiernan-Stone is editor with GAI Media, and is managing editor and daily contributor for Global AgInvesting’s AgInvesting Weekly News and  Agtech Intel News, as well as HighQuest Group’s Unconventional Ag. She can be reached at lkiernan-stone@globalaginvesting.com.

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