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Winery buyers reveal expansion plans

  • Bill Foley, president and CEO of Foley Family Wines, talks during a panel discussion on mergers and Acquisitions at the 10th Annual Wine Industry Conference, in Santa Rosa, on Thursday, April 28, 2011.

Five of the most likely buyers of California's premier wine brands gathered in Santa Rosa on Thursday to discuss the future of the industry.

They sat on a podium in a hotel ballroom like prize fighters before the championship fight, all five of them answering questions and explaining how they plan to conquer a slice of the wine industry.

Bill Foley, owner of Foley Family Wines and probably the most active buyer, explained he was looking for hard assets like wineries and vineyards — not just virtual brands — and his goal was to build a wine business that sold 2 million cases a year.

"I really have a long-term perspective. This is a legacy for my family," said Foley, who in 2007 decided to invest heavily in the business and has grown his once meager winery holdings into a company that produces about 850,000 cases a year.

Foley said that because the wine industry was hit hard by the recession, he has been able to acquire a portfolio of wineries that he "could never have put together five or 10 years ago."

He paid about $70 million last year for Chalk Hill Winery, bought Sebastiani Winery in 2008 and bid unsuccessfully this year for Fetzer Vineyards in Mendocino County, which sold to a Chilean producer for $238 million. He is still looking to acquire a flagship winery on Highway 29 or Silverado Trail in Napa County and is growing his brands in New Zealand and Australia.

He is trying to create a large enough portfolio of brands to give him clout with distributors, whose sales teams are often responsible for getting a producer's wine in the best retail outlets.

"To get the attention of the distributor network is so hard," he said. "I think it might take a couple million cases to be really effective with them."

Roughly 450 people gathered in the Hyatt Vineyard Creek Hotel for the North Bay Business Journal's annual Wine Industry Conference to listen to Foley and his fellow panelists speak about mergers and acquisitions.

Dan Leese, who co-founded the V2 Wine Group last year to market and produce wine, said his company is looking to acquire or partner with wineries to create a portfolio of wine brands that have a combined annual production of about 1 million cases.


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