Vintage Wine Estates filed for Chapter 11 reorganization in 2024, impacting California’s wine industry and coming at a time of significant challenges with consumer demand. We catch up with what buyers of the dozens of brands and wineries have been doing.
The Vintage Wine Estates bankruptcy has sent shockwaves through California’s wine industry and marked the end of one of the sector’s most ambitious consolidation stories.
Today, just over one year after the filing, dozens of former Vintage Wine Estates brands and wineries are now under diverse ownership. The bankruptcy has demonstrated both the vulnerability of highly leveraged consolidation strategies and the resilience of established wine brands to survive ownership transitions.
As the wine industry continues navigating post-pandemic market conditions and evolving consumer preferences, the rise and fall of Vintage over two decades stands as a pivotal moment that reshaped approaches to consolidation, financing and brand stewardship in California’s wine country.
Vintage filed for Chapter 11 bankruptcy reorganization on July 24, 2024, reporting $400 million in debt, $310 million of which was with BMO. Based the Lake Tahoe area but operated out of Santa Rosa, the wine group grew rapidly from 2009 up to the 2023 implementation of major restructuring. Part of fueling that growth involved going public in 2021 via a reverse merger with a special purpose acquisition company (SPAC).
The SPAC transaction that took Vintage public in 2021 was initially hailed as an innovative way for wine companies to access capital markets. However, the reverse merger saddled the company with substantial debt obligations that proved fatal when combined with challenging market conditions and rising interest rates.
“The market was already showing weakness, and the (mergers and acquisition) activity further slowed down the market,” said Rob McMillan, who leads First Citizens Bank’s Napa-based Silicon Valley Bank wine division. “The bulk wine market was already oversupplied, making it difficult to sell bulk wine.”
McMillan emphasized that the under-$12-a-bottle wine market segment continues struggling, while the North Coast premium market are showing more resilience. He observed that much selling and buying of brands, wineries and vineyards happens quietly, and the premium end of the market currently demonstrates more stability.
We caught up with some of the pivotal players in Vintage and those that purchased its reported $475 million in assets at the time of the filing. Pat Roney, cofounder of Vintage in 2009, couldn’t be reached for comment.
Jay Adair, executive chairman of automotive salvage giant Copart, emerged as the most significant buyer. Through his Adair Family Wines venture, Adair acquired four properties from the bankruptcy estate: B.R. Cohn and Viansa in Sonoma Valley, Clos Pegase and Girard Winery in Napa Valley. He also hired between 150 and 200 former Vintage Wine Estates employees, including now Managing Director Zach Long.
“It’s been great just to be able to hire so many folks back. It’s hard to be in this business and not be passionate about it,” Adair said.
Adair’s commitment to preserving both the brands and their human capital represents one of the bankruptcy’s most positive outcomes. The Dallas-based executive, whose core business involves automotive salvage operations at Copart, has invested heavily in restoring the acquired properties to their original vision.
A dramatic transformation has occurred at Clos Pegase. was repainted to its original colors chosen by the original designers.
“We’ve decided to repaint the winery back to its original colors that (architects) John and Michael Braves chose,“ Adair said. ”For some reason, Vintage Wine Estates painted it blue, and it didn’t look right.“
Vintage purchased the winery in 2013, and the repainting was part of the renovations undertaken the following year.
The restoration extends beyond aesthetics, with Adair working to bring back the winery’s commitment to art through artist-dedicated wine labels, and working to restore concert permits for B.R. Cohn that had lapsed under Vintage’s ownership.
“There’s a hiccup right now in the wine industry,” Adair said. “Wine has been around for thousands of years. I don’t think it’s going away.”
The human story of Vintage’s collapse is perhaps best illustrated through Terry Wheatley’s journey. She was president of Vintage Wine Estates, departing a year before the bankruptcy. But Wheatley managed to secure key trademarks via the court process and also launched Connect the Dots Collective, a consulting firm that advises beverage companies and creates new brands.
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