Vintage Wine Estates buys Ace Cider of Sebastopol in bid to broaden its portfolio

Vintage Wine Estates has bought Ace Cider of Sebastopol in a high-profile acquisition for the growing Santa Rosa company as it looks to broaden its portfolio beyond premium wine after becoming a publicly traded company earlier this year.

The transaction is expected to close on Nov. 16 as Vintage Wine Estates takes over California Craft Cider Co., the parent of Ace, from Jeffrey House and his family. They founded the hard cider company in 1993 and have helped grow the business to be one of the top independent brands in its sector in the United States.

Terms of the deal were not publicly disclosed though House said in an interview that he was pleased with sale price.

Ace produces almost 90,000 barrels of cider annually with $25 million in yearly sales. The company is noted for its pineapple cider, which is the top-selling fruit-flavored cider in the country. Ace also produces a premium product made from local Gravenstein apples and aged in oak chardonnay barrels, and has recently introduced more tropical flavors that have become popular with younger consumers.

Earlier this year, Ace became the first craft cidery to distribute its products nationally from its plant off Highway 116.

The sale comes as the 71-year-old House had recently entertained interest from some companies about a possible sale. But he said he felt that Vintage Wine Estates could offer the best path forward as Ace would not lose its autonomy under a wine company as much as being snatched up by a brewery or another cider brand.

He also said that Vintage Wine Estates’ location in nearby in Santa Rosa was a factor as the company’s chief executive officer, Pat Roney, “is only around the corner.”

A British native who previously worked with beer imports, House said it was “time to pull in my horns a bit” in selling the family business. His sons, Simon and Jason House, will stay on in leadership roles under the new ownership.

For Vintage Wine Estates, the sale gives it another avenue for growth. As of last year, it was the 15th largest wine company in the country at 2.2 million cases sold, according to Wine Business Monthly. It owns Kunde Family Winery in Kenwood and Napa Valley’s Girard Winery among its more than 50 wine brands.

The company also has a very strong direct-to-consumer business that provides about a third of its revenue as well as a growing private label business that provides supermarkets and chain stories their own proprietary wine brands.

The hard cider category has about 10% sales growth in recent years and the sector has seen new products come to market such as higher alcohol content and a larger variety of flavors that are appealing to younger consumers, Roney said.

“When we understand where the millennials are with flavors, natural products and gluten-free products, it made a lot of sense for us,” Roney said of the purchase. “We continue to firmly believe that hard cider has a lot of organic growth on the upside.”

The sale also allows Vintage Wine Estates to enter into the beer distribution category – as hard cider is sold under that product category – as all of its other products are sold by wine-and-spirits wholesalers. That will allow Vintage Wine Estates to grow its presence with crucial brick-and-mortar retailers in selling its overall portfolio, Roney said.

The company acquired the wine subscription service Vinesse last month. Roney said he expects further acquisitions within the wine sector and outside of it over the next year.

“We’re interested in what we call the shoulder of the wine category. We won't get into distilled spirits. We won't get into the major beer brands. But we'll look at things that are craft-related,” he said.

Vintage Wine Estates on Monday also reported its net revenue in the latest quarter reached $55.7 million. That figure was an increase of $1.9 million, or 3.4%, over the same period last year and was a result of recent acquisitions over the past year and a strong direct-to-consumer business. Its net income was $2.8 million for the quarter compared to $3.2 million from the same period last year.

You can reach Staff Writer Bill Swindell at 707-521-5223 or bill.swindell@pressdemocrat.com. On Twitter @BillSwindell.