Foley Family Wines announced a deal Wednesday to acquire Ramal East Vineyard outside Sonoma, the latest in a flurry of vineyard deals on the North Coast as wine companies seek to secure their supply of grapes.
The vineyard property, located in the Carneros appellation, includes about 206 acres planted primarily with chardonnay and pinot noir. The grapes will be used to support Chalk Hill Estate's new Sonoma Coast line of wines, which will launch next year.
"With the launch of the new Sonoma Coast tier we needed to make sure the winemaking team had access to a consistent supply of high-quality fruit," owner Bill Foley said in a statement. "When the opportunity arose to purchase a first-rate vineyard in Carneros we jumped at the prospect. This great piece of land will provide Chalk Hill with enough chardonnay and pinot noir to support the growth we have projected for this new tier of wines."
Foley's new wines will be marketed at a lower price than Chalk Hill's estate wines, the company said.
The property was previously owned by EPR Properties, which owned most of the vineyards affiliated with Ascentia Wine Estates, the now-defunct company that once owned Geyser Peak.
Financial terms were not disclosed.
Last year, Jackson Family Wines paid $13 million to acquire the neighboring Ramal West property, which included 197 acres of vineyards, according to EPR. The seller valued the Ramal West and Ramal East parcels at $25.6 million combined. If those land values held, that would put Ramal East in the range of $12 to $13 million.
In the past year, wineries have been buying up vineyards at a faster pace, following two years of small crops that sent grape prices soaring. Owning more vineyards helps wineries secure their grape supply through the boom and bust cycles.
"We've seen considerable activity the last 12 months. This branch has done phenomenally," said Bill Rodda, branch manager at American Ag Credit. "We've also seen several deals of large vineyard managers acquiring some of the properties that they've managed."
Between Napa and Sonoma, the Santa Rosa farm lender made more than $100 million in loans for vineyard purchases in the last 12 months, about double its usual total, he said.
Last week, Jackson Family Wines announced a deal to acquire the 260-acre Russian River vineyard site owned by Saralee and Richard Kunde. The deal was valued at about $23 million, according to wine industry sources.
Paul Spitler, a vineyard broker with V&E Properties, said the major wine companies like Jackson Family Wines, E&J Gallo and Foley are buying vineyards throughout the North Coast.
"There have been seven or eight significant transactions in Lake County this year. One of them was the Gallo purchase of the Snows Lake property," Spitler said.
Sales of wineries and vineyards slowed during the recession, and picked up earlier this year. Some of the vineyard deals announced in the last few weeks were brokered over the summer but timed to close after the harvest, to interfere less with the crush, he said.
Since 2005, some vineyard values have remained relatively flat, while others rose by about 10 percent, said Mark Gregg, senior appraiser at American Ag Credit.
"It's not a dramatic increase in value, but there's a whole lot of properties changing hands," Gregg said. "It's kind of unprecedented."