November 28, 2022

By Lynda Kiernan-Stone, Global AgInvesting Media

Southern Premium Vineyards (SPV), the platform formed by PSP Investments to own Australian vineyards, has entered into a long-term strategic partnership with Australia’s Casella Family Brands (CFB) under which SPV will acquire 7,215 hectares (17,829 acres) of vineyards across 35 properties in South Australia and New South Wales.

Established in 2021, SVP already owns 460 hectares (1,137 acres) of vineyards in the Coonarwarra and Barossa Valley, and this acquisition will expand its portfolio to include assets in the Clare Valley, Langhorne and Currency Creeks, Limestone Coast, and the Riverina regions. 

“Our commitment to sustainable farming combined with our long-term investment horizon allows PSP Investments to lever Australia’s unique global competitive position for its quality wine grapes,” said Marc Drouin,  senior managing director, Real Assets and Global Head of Natural Resources Investments, PSP Investments.

“Casella is a best-in-class group with an impressive portfolio of vineyards in some of the country’s most highly regarded wine regions,” Drouin continued. “This acquisition is a cornerstone investment for both SPV and PSP Investments’ global wine portfolio.”

Based in Yenda, New South Wales and led by managing director John Casella, CFB is Australia’s largest family-owned wine company and the country’s largest wine exporter by volume. Its flagship brand, Yellow Tail, accounts for approximately 17 percent of Australia’s total exported wine.

The brand is key in the U.S., cementing its global ranking of being a top-ten brand in 10 markets. It has also been named the Most Powerful Wine Brand by the Wine Intelligence Global Brand Power Index for the five years spanning 2018-2022. 

On the back of this success, the Casella family made the decision to divest its vineyards to reinvest the capital into brand building and growing its business both domestically and internationally.

When CFB began inviting expressions of interest, John Casella told Drinks Trade, “The company is in a sound financial position, having recently experienced global record sales for Yellow Tail during the COVID-19 pandemic. While demand has stabilized, we are forecasting future growth due to ongoing investment in our brands supported by a strategic innovation pipeline.”

“The intended strategic partnership will allow us to focus on strengthening our brands globally, and therefore deliver positive outcomes for the Australian wine industry.”

The deal between PSP Investment and CFB includes all land, properties, associated water entitlements, facilities, and equipment, and includes a long-term grape supply agreement with Casella stating that SPV will assume the management of the vineyards and associated employees.

John Casella commented, “We are pleased to be entering this partnership with SPV, a platform of PSP Investments, which is an investor with a proven track record of successful long-term investment in agribusiness in Australia and around the world. We are confident that SPV will continue to deliver the quality and consistency of the grapes we require, safeguard and preserve the vineyards and ensure the wellbeing of its employees.”

Nick Gill, director with SVP, added, “SPV’s strategy is to offer wine companies a multi-regional grape supply solution for their wine grape sourcing as an alternative to owning or leasing vineyards – and a partnership with Casella is a perfect fit with this strategy.”

~ Lynda Kiernan-Stone is editor in chief 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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