Analysts See A Significant U.S. Deal

Ahead For Treasury

Analysts continue to raise expectations that Treasury Wine Estates (TWE) will soon make a sizeable acquisition in the U.S. According to the Australian Financial Review, Macquarie analysts see TWE acquiring “a medium-sized winemaking and marketing company in the U.S.,” and named Vintage Wine Estates and Ste. Michelle Wine Estates as potential targets.

Macquarie envisions a potential $3 billion purchase of Washington-based Ste. Michelle, which reported a 6.4% net revenue decline to $698 million for the year ended December 31. Shipments fell 8.6% to around 8.5 million cases, with parent company Altria citing negative impact from “competitive activity, continued trade inventory reductions, and slower premium wine category growth.”

According to Impact Databank, Ste. Michelle’s 14 Hands and Columbia Crest brands both declined last year after posting double-digit growth in 2016. Last spring, rumors swirled that Constellation might also be interested in Ste. Michelle, with Washington wines rising in the marketplace. At that point, analysts suggested Altria could eventually sell Ste. Michelle at a price estimated to fall between $3-$4 billion.

Vintage Wine Estates has volume of around 1.8 million cases and has been on an acquisition run of its own lately, acquiring the Layer Cake, Cherry Pie, and If You See Kay brands from One True Vine for an undisclosed amount late last year (Deutsch Family Wine & Spirits is now handling Layer Cake’s sales and marketing nationally). Earlier last year, Vintage added Oregon’s Firesteed brand and, in January, it purchased Washington’s Tamarack Cellars. As it continues to build its portfolio, it’s unclear if Vintage would entertain acquisition offers.

TWE’s Americas unit posted a 10% decline in net revenue to A$504 million ($407m) for the six months through December, mainly driven by its exit from the commercial end of the business. But TWE’s luxury and masstige ($10-$20) segments saw combined depletions growth of 13% for the period, and earnings were up 13% to A$100 million ($81m). CEO Michael Clarke has been clear that the group is keen to further premiumize the portfolio, with acquisitions being part of the mix. Now, analysts and investors see TWE as primed to make a significant move.

Vintus Adds Italy’s Masciarelli To Growing Import Stable

New York-based importer Vintus is expanding its Italian wine portfolio, welcoming Abruzzo’s Masciarelli Tenute Agricole to the fold. Masciarelli, which was previously imported to the U.S. by Boston’s San Martino Imports, is expected to sell about 75,000 cases this year.

Led by Marina Cvetic, the wife of founder Gianni Masciarelli, who passed away in 2008, the Masciarelli portfolio is comprised of three tiers. Its Linea Classica line features a Montepulciano d’Abruzzo, Trebbiano d’Abruzzo, and Rosato retailing at $12 a 750-ml. The Marina Cvetic tier includes a Montepulciano d’Abruzzo Riserva ($28), Trebbiano d’Abruzzo Riserva ($50), and Montepulciano d’Abruzzo ISKRA ($35). And the Villa Gemma range features a Montepulciano d’Abruzzo Riserva ($90), Bianco ($18), and Cerasuolo d’Abruzzo ($18).

With the addition of Masciarelli, Vintus continues to build its presence in Italian wine. In January, Vintus became the U.S. importer for Frescobaldi’s Ornellaia, Masseto, Luce della Vite, and Attems labels, which account for about 35,000 cases and skew heavily toward the prestige segment of the Italian category. Vintus’s Italian offerings also include Tommasi (Veneto), Sandrone (Piedmont), Casisano (Tuscany), Petrolo (Tuscany), Le Macchiole (Bolgheri), Poggio al Tufo (Maremma), Paternoster (Basilicata), and Masseria Surani (Puglia).

Wild Turkey Extends With 8-Year-old Longbranch

Bourbon

Campari America’s Wild Turkey has announced the May release of Longbranch, the brand’s latest extension. The 43%-abv whiskey is an 8-year-old Bourbon that’s been filtered twice—once through American oak charcoal and a second time through charcoal made from Texas mesquite. Master distillers Jimmy and Eddie Russell developed the whiskey with input from Wild Turkey creative director Matthew McConaughey, whose signature is featured on the bottle alongside Eddie Russell’s. Longbranch ($40 a 750-ml.) will be distributed nationally in the U.S. in May, with international distribution to follow. Wild Turkey was up 3.5% to nearly 660,000 cases in the U.S. in 2017, according to Impact Databank.

News Briefs:

•Moët Hennessy’s online retail platform Clos19 is making its debut in the Florida market. Launched in the U.S. late last year, Clos19 offers a selection of LVMH Champagnes, wines, and spirits, with all sales made by licensed retailers and facilitated by delivery service Thirstie. The site also offers editorial content and travel packages, including luxury excursions to Antarctica, New Zealand, and France, among other destinations. Florida brings Clos19’s U.S. footprint to three markets, joining New York and California. The platform will expand to additional states later this year.

•Amazon is extending its Whole Foods Market delivery service to the greater Los Angeles and Orange County markets. Available through Amazon’s Prime Now platform, the program allows Amazon Prime members to purchase items from Whole Foods Market—including beer, wine, and spirits—and receive free two-hour delivery, or one-hour delivery for $7.99, on orders of $35 or more. The Whole Foods delivery service, which launched in February, is available in seven cities, with expansion into new U.S. markets slated to continue this year. Amazon acquired Whole Foods last year in a $13.7 billion deal.

•Glen Ellen, California-based Benziger Family Winery has launched the Benziger Organic Reserve Wine range, a new tier of organically farmed wines. The collection debuts with the 2016 Reserve Pinot Noir ($45 a 750-ml.), which is made with certified organic grapes sourced from the Russian River Valley. Chardonnay and Cabernet Sauvignon offerings are slated for release next year. The new wine is available nationwide at restaurants and fine wine shops. Owned by The Wine Group, Benziger Family Winery is among California’s leading practitioners of organic and biodynamic grape-growing.

•New York-based HB Wine Merchants has added Piedmont winery Voerzio Martini to its import stable. HB Wine Merchants will take on the Italian brand’s full lineup, which includes an Arneis ($21 a 750-ml.), Barbera ($29), Barolo ($85), Dolcetto ($21), Freisa ($23), Nebbiolo ($30), and Moscato ($21). Based in La Morra, a sub-zone of the Barolo DOCG, the Voerzio Martini estate spans 30 acres and produces roughly 60,000 bottles annually.

•Crimson Wine Group has named Nicolas Quillé as chief winemaking and operations officer. Quillé was most recently general manager and head winemaker of Banfi Vintners’ boutique portfolio of wineries in the Pacific Northwest. Craig Williams, who has served as Crimson’s chief winegrowing and operations officer since 2015, will become consulting winegrower and remain on the board of directors.

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