January 24, 2022

By Lynda Kiernan-Stone, Global AgInvesting Media

Vintage Wine Estates (VWE), a rapidly-growing company with 12 estates in Napa, Sonoma, California’s central coast region, Oregon, and Washington, and a robust direct-to-customer platform, has expanded into the U.S. East through its acquisition of 120-year-old Ohio-based winery, brewery, and distillery, Meier’s Beverage Group. The deal is valued at approximately eight times the company’s 2021 EBITDA, or reportedly, $25 million. 

The loss in tourism dollars due to the pandemic has hit California’s winemakers particularly hard. Some have turned to solutions such as virtual tours and tastings, and some, like VWE, chose other channels through which to keep growing their business.

In February 2021, VWE merged with special purpose acquisition company (SPAC) Bespoke Capital Acquisition Corp (BCAC) for the purpose of bringing Vintage Wine Estates public at an enterprise value of $690 million.

At the time, VWE stated that the capital gained through this investment would support its acquisition strategy. Having already successfully acquired 20 wineries over the past 10 years, VWE believes that the conditions present in the  U.S. wine industry make it an increasingly positive opportunity for synergistic acquisitions.

Founded more than 20 years ago, VWE is a high-growth U.S. wine producer that has scaled and grown organically through more than 20 acquisitions, growing its portfolio to include more than 50 brands ranging from $10-$150 at retail, with the majority priced between $12-$20, and sales volumes of nearly 2 million nine-liter equivalent cases per year.

The company has also built a balanced omni-channel strategy that encompasses direct-to-consumer, wholesale, and exclusive brands arrangements with national retailers that has resulted in a stable platform that has been profitable every year since inception, posting 20 percent-plus average annual revenue and EBITDA since 2010.

With this war chest at the ready, VWE is now moving beyond the U.S. West Coast, expanding its production capacity and capabilities by acquiring Meier’s Wine Cellars, Inc., DBA Meier’s Beverage Group, (“Meier’s”) located in Silverton, Ohio, north of Cincinnati.

With 2021 revenue of $18 million, Meier’s is a leading producer, bottler, importer, and marketer of specialty alcohols and non-alcoholic products, and is the oldest and largest winery in Ohio, and one of the oldest and most versatile custom beverage production facilities in the Midwest.

The company is able to offer custom blending, contract storage, contract manufacturing, and private labeling for wine, beer, and spirits. It also owns a bonded winery, brewery, and distilled spirits plant with processing, blending, and bottling capabilities for a range of products that include three bottling lines and a state-of-the-art canning line with a yearly capacity of 800,000 cases.

Aside from these production capabilities and supply chain efficiencies, the company offers additional warehouse and storage space in a centralized Midwest location with easy access to Midwest, Northeast, and Southeast markets. This logistically opens the company up to the possibility of rapid expansion of points of distribution for VWE’s products such as ACE Cider, which it acquired in November 2021. 

“Vintage Wine Estates has a longstanding relationship with Meier’s and has been a spirits client for many years. We know their operation to be among the most well-managed in the business,” said Pat Roney, CEO, Vintage Wine Estates. “We are particularly excited about their expertise in ready-to-drink (“RTD”) wine and beverage alcohol production and plan to expand our RTD production, including Ace Cider products, at their facility.”

Meier’s is focused on the expansion of its portfolio of wines and juices as well as playing a role in the growth of start-ups and craft brewers as well as the success of its downstream clients. Moving forward, Meier’s president Paul Lux will continue in his role, bringing his long-term experience to bear on the operation.

“We are excited to partner with Vintage Wine Estates which has been successfully growing its beverage alcohol business over the last 20 years,” said Lux. “We were attracted to the opportunity to join VWE because we expect the combination to accelerate cash flow growth from stronger operating leverage while also expanding our capabilities and market reach. Meier’s brings technical strength, increased capacity, and deeper Mid-West geographic access to the broader brand equity and scale of Vintage Wine Estates. We look forward to our shared success and the expected solid growth that this merger creates.”

–  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 Oilseed & Grain News. She can be reached at lkiernan-stone@globalaginvesting.com. 

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