Issue link: http://read.dmtmag.com/i/155925
What's Your Wine Brand How to add value in a competitive market BY JENNIFER AT A GLANCE + Experts in mergers and acquisitions are seeing consistent interest in brand-only sales. + Brand-only buyers are typically larger companies looking to add to their portfolios for strategic reasons. + Limiting the number of SKUs and varieties in a brand's portfolio is one of the best ways to increase the value of a brand. + Retail price, percentage of direct-to-con- sumer sales, and cash flow are taken into account when determining brand value. 36 V I N E YARD & WINERY MANAGEMENT | Sept - Oct 2013 STRAILEY ow does $160 million sound? That's the amount procured by the Purple Wine Co. when it sold the good name of Mark West to Constellation Brands last year. The sale did not include vineyards or a winemaking facility – just the brand name and inventory. Even if selling your wine brand isn't on the immediate horizon, taking steps to ensure that it's worth more tomorrow than it is today is a wise investment. And while the lion's share of industry sales include winery facilities and/or vineyards, merger and acquisition experts say brand-only sales can be quite compelling to buyers. "We're definitely seeing a lot of interest in brand-only sales," said Matt Franklin, a principal with Zepponi & Co. in Santa Rosa, Calif. "It's a much better return on assets because you're not having to invest in winery production facilities or vineyards. You're just investing in inventory." w w w. v w m m e d i a . c o m