Getting a Winery Sold, the Current Reality
A realistic asking price, clean financials and proper marketing are the keys to getting a winery sold in the current market.
Lewis Perdue, Publisher of Wine Industry Insight and founder of Wine Business Monthly, along with several other wine industry experts predict up to half of wineries will sell in the next five years. This prediction is an important consideration as it denotes growing supply potential. I believe half of these wineries would like to be sold in the next five years, however the harsh reality is that the number of SOLD wineries will be much smaller. Business models are changing and there is a finite, shrinking number of winery buyers, especially for small to medium wineries.
I talk with winery owners on a regular basis. They are interested in selling, however they are not realistic when it comes to pricing and the exposure required to market a winery for sale. Even confidential winery listings experience some level of exposure.
A medium to large size profitable winery with historically strong multiples should hire a Mergers and Acquisitions firm (M&A). An M&A firm often requires a one year contract and charges retainer fees in the six figures, plus a portion of the selling price. They can offer a confidential process of approaching qualified buyers.
Other wineries should benefit from a team of professionals including an experienced real estate broker (generally working on commission only), an accounting firm or CPA, an appraiser ($5,000-$10,000) and possibly an attorney and/or business advisor. Pricing is critical! Sellers who are willing to make the investment and get a professional “market value appraisal” by an experienced certified appraiser show buyers they are serious. This research gives weight to the asking price. I have been selling winery, vineyard and lifestyle real estate in California for over 15 years and its my opinion that less than 10% of wineries currently for sale are priced to sell.
If you are considering a sale, involve professionals early in the process and price your winery to get sold before the predicted wave hits.