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Amazon’s long awaited entry in the wine market ended with as a quiet dud, instead of entering the market with an explosion.  Their attempt to enter the wine industry was met with a double whammy of a worldwide recession and the insane spirits regulations that exist with each State.  It would have been interesting to see if their size of scale would have brought much desired savings to consumers.

Many California grapes will go homeless this year as this recession has caused the largest oversupply of fine-wine grapes in decades.  If you desired you could buy Napa Cabernet Sauvignon or Russian River Pinot Noir by the truckload.  With more and more consumers buying wines in the less than $20 range, the average price per ton of Napa Cabernet has gone from an average of $4,689 per ton to $2,000 for premium hillside grapes. 

New Owners for California Pinot Noir Star Kosta Browne

Main players remain, new partners cash out original investors for estimated $40 million
James Laube
Posted: September 11, 2009

Owners of Kosta Browne, the popular Sonoma winery that has made dozens of outstanding Pinot Noirs in the past five years, have sold a controlling interest to Vincraft for close to $40 million.

“We’re stoked, we’re really excited,” said winemaker Michael Browne, who started making wine with Dan Kosta in 1997, before launching their namesake label.

Browne, 41, said he, Kosta, 37, and Chris Costello, 34, who have been running the business, had been looking to replace some of the original investors, who are now in their 60s and 70s. Those investors wanted to cash out, prompting the Kosta Browne team to find a new partner.

They believe they found the right fit with Vincraft, a Sonoma-based investment firm that is putting together a portfolio of California wineries. “We met with many groups,” Browne said. “We wanted to find the right partner, the right fit, someone who would respect our vision and our culture.”

Walt Klenz, Bill Price and Pete Scott founded Vincraft earlier this year. Klenz and Scott are former top executives with the Beringer and Fosters wine group, and Price owns Durell Vineyard in Sonoma, along with the Three Sticks brand and a part interest in Kistler. TPG, the former Texas Pacific Group, is also an investor. That’s the same private equity firm that bought Beringer Wine Estates in 1995 for an estimated $350 million and then sold it to Foster’s for $1.5 billion in 2000.

“It’s been a long gestation period,” said Klenz of negotiations with Kosta Browne. “It’s a great kickoff acquisition for us.”

Kosta and Browne originally pooled their tip money while working in the restaurant business to start their winery, with their first major release coming in 2000. But their real breakthrough came with the 2003 vintage, with all six of its Pinots earning outstanding to classic reviews from Wine Spectator. The winery has had 49 Pinots reviewed, with 18 scoring in the classic range (95-100 points on Wine Spectator’s 100 point scale) and 25 with outstanding reviews, or 90-94 points.

Kosta Browne’s emergence as one of California’s top Pinot Noir producers has coincided with this varietal’s recent ascent in quality. It has also helped define a new modern style of Pinot that features ripe, opulent flavors, impeccable balance, finesse and grace. Most of the wines come from Sonoma County and most carry vineyard designations. In 2007 the winery made 10 different wines and 11,000 cases; the wines sell for $58 to $72 a bottle.

Browne and Klenz said they didn’t plan any major changes. Kosta, Browne and Costello have been overseeing the business, which purchases all of its grapes and makes wine in a rented warehouse in Sebastopol. “One of the reasons we’ve been successful is we have low overhead,” said Browne. The vineyards they buy grapes from have both written and handshake agreements.

Klenz said Vincraft liked the owners, the wines and the business model. “We didn’t want to go in and change anything,” Klenz said. “We had to have a plan that we both agreed on. We have a fundamental philosophy for the wine, the brand, what varietals we make, etc. We have an agreement that sets the bounds of how we run the business.”


Cliff Lede Buys Pinot Producer Breggo Cellars

Napa winery adds an Anderson Valley producer to its holdings
MaryAnn Worobiec
Posted: October 2, 2009

Napa winery owner Cliff Lede is adding Pinot Noir to his portfolio. Cliff Lede Winery has purchased Breggo Cellars, a small Pinot Noir and Pinot Gris producer to the north in Anderson Valley. The purchase includes the brand, inventory and grape contracts for vineyards, including Ferrington and Savoy. The purchase price was not disclosed.

"It’s a good fit for us," said Cliff Lede, who added that he had been looking for a Pinot Noir investment for some time. Lede is a Canadian commercial developer who founded Cliff Lede Vineyards in 2002 when he purchased the old S. Anderson Winery in Napa’s Stags Leap District. The winery focuses on Bordeaux-style reds and Sauvignon Blanc from their 60-acre estate vineyard. Michelle Edwards is winemaker, and Michel Rolland consults.

In 2000, Douglas and Ana Lucia Benitez-Stewart purchased 203 acres of former sheep-grazing land north of Booneville in Anderson Valley, and have developed 7 acres of this land into vineyards. They founded Breggo cellars in 2005, focusing on wines made entirely from purchased Anderson Valley grapes, while their vineyards matured.

As part of the deal, Douglas Stewart will remain an equity partner, and along with consulting winemaker Ryan Hodgins, will continue to oversee Breggo’s operations. The Stewarts will retain their land, but plan to sell grapes to Breggo Cellars when the vineyard comes into fruition.

Breggo makes about 5,000 cases of wine a year, focusing on cool-climate Pinot Noir and Pinot Gris. The wines have been on an upswing of late—three elegantly styled 2007 Pinot Noirs scored 91 to 92 points on Wine Spectator‘s 100-point scale

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