Vintage Wine Estates (VWE on Nasdaq) is a company that owns multiple brands. They are small compared to the likes of Constellation Brands or Gallo. The company was born about 20 years ago right here in Santa Rosa, CA, and they are apparently in trouble.
Who is Vintage Wine Estates?
Their website shows 34 brands of mostly wine, but also includes one of the largest hard cider producers, Ace Cider. They grew fast acquiring wineries throughout the West such as Clos Pegase, Cosentino, and Girard in Napa, BR Cohn, Patz & Hall, Sonoma Coast Vineyards, Viansa, and Windosr Vineyards in Sonoma, and Ste. Chapelle in Idaho. They also own some well-known wine brands like Cameron Hughs and Layer Cake.
Bad business decisions
Perhaps they grew too fast. By 2012 they had their first six holdings. By the end of 2018 they had 26, adding six of those in 2018 alone.
They have been reporting money problems for over a year. The current status as of Feb '24 is they have trimmed a lot of staff (this wasn't the first time) and want to sell a couple of their main properties, Clos Pegase in Napa Valley and Viansa in Sonoma Valley. Ones they think can bring in a lot of cash. I expect this is only the start.
VWE claims they want to keep Girard, BR Cohn, Layer Cake, and Ace Cider plus a few others. This sounds like there are still plenty that can go.
If VWE continues to exist it will look different, most definitely smaller, and this probably won't matter to most consumers.
Stock
If you are looking for a cheap stock to take a chance on, they are currently traded for less than 50 cents. VWE hit $11.80 at the end of 2021. The Duckhorn Portfolio (NAPA), which is kinda similar to Vintage Wine, but seems to be better off, but even their stock has taken a dump in the past year, losing almost half of its value.
Lack of focus
VWE seems all over the place in their portfolio with initial acquisitions like Girard, Cosentino, and Clos Pegase, all medium-sized premium wineries. They also have Layer Cake and Cameron Hughes, entirely different operations. There's a cidery, canned wine cocktails, gin, and something called Girl & Dragon making cheap, fearless wines (cheap was my adjective, fearless was theirs). There's a label, known as The Wine Sisterhood (really), and several other similar brands.
I can see where at one time some acquisition manager was on a "girl wine" kick. And that's okay if it's a smart business decision. Has anyone ever heard of these? It's a real hodgepodge.
Sounds like they should figure out what they are best at and stick to that.
Info for this post from:
Northbay Business Journal
Santa Rosa Press Democrat
Vintage Wine Estates
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