Benziger Family Winery, founded more than 30 years ago by a pioneering Sonoma Valley wine family who helped bring green farming practices into the mainstream, is being sold to one of the world’s largest producers of low-priced wines.
The Wine Group, the world’s third-largest wine company with such budget brands as Franzia, Almaden and Corbett Canyon, announced Monday it has purchased the winery in Glen Ellen and its nearby sister winery, Imagery.
Financial terms were not disclosed, though industry estimates ranged from less than $90 million to slightly more than $100 million.
It is the second blockbuster deal in two decades for the Benziger family, which built its first wine brand, Glen Ellen, into the largest wine label in Sonoma County before selling it in 1993 to Heublein for an estimated $80 million.
Mike Benziger, founder and chief executive officer of his family winery, said The Wine Group will continue the green farming tradition that has been the calling card of the winery he founded with his late father in 1980.
“They are very energetic and good people … it was almost like selling back to ourselves,” Benziger said in an interview Monday. “Their mission is to bring the company more upscale.”
The Wine Group at first glance doesn’t appear to be a natural fit for Benziger, which produces 139,000 cases of wine annually, according to the Gomberg-Fredrikson Report, with prices that can go as high as $80 per bottle on its website. The Wine Group produces almost 60 million cases of wine a year, much of it sold in 3- and 5-liter boxes.
But the purchase is a signal that the privately-held Livermore company looks to expand into the more profitable market for premium and super-premium wines that is a hallmark of the North Coast wine industry. Its Cupcake brand, launched in 2008, quickly became one of the fastest-growing premium wine brands in the country, selling more than 3 million cases annually.
“As we continue to move into the super-premium category, we have been thoughtful in our search for a winery that produces exceptional wines while sharing our values of integrity, social responsibility, and innovation. The Benziger family is not only celebrated for its outstanding wine quality, but their strong team will be a great cultural fit within The Wine Group,” CEO Brian Vos said in a statement.
The sale is the latest sign of consolidation in the North Coast industry among major players, following on the heels of E&J Gallo Winery’s purchase of Healdsburg-based J Vineyards & Winery in March.
“The mergers and acquisitions markets do not seem to be slowing in the wine business. If anything, the continued low interest rate environment and large amount of capital out there looking for a return is only pushing M&A deeper than most people would have predicted at the start of the year,” Rob McMillan, executive vice president of Silicon Valley Bank’s Wine Division, said in an email.
The purchase includes the Benziger Family Winery and its 85-acre estate adjacent to Jack London State Park. The winery has become a significant tourist attraction in Sonoma Valley, taking visitors on tours through its vineyards on trams. The Wine Group will also acquire the family’s Imagery Winery and its tasting room on Highway 12, two miles east of Benziger.