Winery Valuations
Wineries often make large capital investments in vineyards that produce low returns relative to other assets. In addition, because the level of competition in the wine business is so intense, the returns after the grapes are sold as wine, are also moderate. This combination of low returns and high capital costs make wineries a unique investment.
These unique features also impact how control investors value a winery versus minority investors. A control investor considers both the earnings of a winery as well as the value of its net assets. The minority investor however looks primarily to the earnings of a winery as they cannot control the disposition of the assets. These considerations make the valuation of wineries a specialized practice. Barber Analytics has been trusted by some of the oldest and most respected families in the US wine business to provide valuations for estate and gift tax filings, litigation and shareholder buyouts.
Our previous winery engagements are available upon request. Please find articles related to winery valuations below. Call our number below to discuss any questions you may have.
Articles & Newsletters
Napa Valley Appellation Value Holding Steady at $216,000 per Acre
"Our current analysis reveals a 2022 Napa Valley AVA value for prime
Cabernet Sauvignon vineyards of $216,000 per acre, holding steady despite borrowing cost challenges. Wine prices for Napa Cab softened in 2022 as the market digested the large crops from 2018 and 2019.."
2023 AVA Value for Russian River Valley Pinot Noir Vineyards Holds Up
"Our 2023 analysis revealed a Russian River Valley American Viticultural Area (AVA) value for Pinot Noir vineyards of $63,800 per acre, down slightly from 2022. The AVA value held up quite well despite an increase in interest rates which led to an increase in our capitalization rate."
Napa Valley Appellation Value Holding Steady at $215,000 per Acre
"Our current analysis reveals a Napa Valley AVA value for prime Cabernet Sauvignon vineyards of $215,000 per acre, down slightly from $228,000 in 2019. Wine prices for Napa Cab softened in 2020 but strengthened modestly in 2021, continuing the strong market for vineyard and AVA values."
AVA Value for Russian River Valley Pinot Noir Vineyards Moderates in 2022
"Our 2022 analysis of the Russian River Valley AVA for premium Pinot Noir vineyards shows a moderating value of $65,900 per acre, down 12.6% from our last analysis in 2019. This decrease is not surprising given the weakness in Sonoma Pinot Noir grape prices in 2020."
Napa Valley Appellation Value Up to $228,000 per Acre
"Our current analysis revealed a Napa Valley AVA value for prime Cabernet Sauvignon vineyards of $228,000 per acre, up 5.6% from $216,000 in 2018. Wine prices for Napa Cab have softened in 2018 and 2019, however the cost of capital has been favorably impacted by low interest rates in 2019, continuing the strong market for vineyard and AVA values."
AVA Value for Russian River Valley Pinot Noir Vineyards Continues to Rise
"Our 2019 analysis revealed a Russian River Valley (RRV) American Viticultural Area (AVA) value for prime Pinot Noir vineyards of $75,400 per acre, up 5.3% from last year. This increase is not surprising given the strong growth in Pinot Noir grape prices in Sonoma for the past 20 years and the strong prices realized recently in RRV vineyard sales."
Napa Valley Appellation Value Holds Steady at $216,000 per Acre, The Winery Report, September 2018
"We published updates for the 2016 and 2017 AVA values, and now we’ve updated our analysis for 2018. Our current analysis revealed a Napa Valley AVA value for prime Cabernet Sauvignon vineyards of $216,000 per acre, almost flat from $218,000 in 2017. "
Russian River Valley Pinot Noir Vineyards Command High AVA Premium, The Winery Report, June 2018
"Our analysis revealed a RRV AVA value for prime Pinot Noir vineyards of $71,600 per acre. This value is not surprising given the strong growth in Pinot Noir grape prices in Sonoma for the past 20 years. "
Napa Valley Appellation Value Grows to $218,000 per Acre, The Winery Report, November 2017
"We published an update for the 2016 AVA value in the summer, and now we’ve updated our analysis for 2017. Our current analysis revealed a Napa Valley AVA value for prime Cabernet Sauvignon vineyards of $218,000 per acre, up from $211,000 in 2016. "
"Our analysis revealed a Sonoma AVA value for prime Chardonnay vineyards of $42,000 per acre. We also found the “Russian River Valley” and “Sonoma Coast” appellations had a value slightly above the average, and that the more general “Sonoma County” AVA had a value materially below the average."
Napa Valley Appellation Value Grows Along with Vineyard Values, The Winery Report, May 2017
"Over the past few years we’ve conducted many AVA valuations in Napa and have found that the value of the AVA continues to increase. With prime Napa Valley vineyard values in the $300,000 to $400,000+ per-acre range, it really should come as no surprise that AVA values continue to increase as well. Our current analysis revealed a Napa Valley AVA value for prime Cabernet Sauvignon vineyards of $211,000 per acre."
"In this issue I’ll review the Estate of Giustina decision that provides support for the use of going-concern, earnings-based methods, and the exclusion of asset value methods, when valuing non-controlling interests. In addition, I will introduce market evidence that shows that minority winery investors are almost completely focused on earnings and cash flow, and have little regard, or use, for asset values."
Valuation Update, The Winery Report, May 2014
"There have only been about ten US wineries that have traded on major stock exchanges, which may explain why no US winery indexes exist (indexes measure the performance of a group of stocks). However, it’s instructive for everyone in the wine industry to see how the publicly-traded wineries are valued, and how they’ve performed as an investment, so I created my own."
Appellation Valuation and Amortization, The Winery Report, Summer 2012
"How much would you be willing to pay for a bottle of 92-rated Cabernet Sauvignon from Columbia Valley? What about the same bottle from the heart of the Napa Valley in Oakville? It turns out that wine buyers will pay significantly more for the same wine as long as it’s from the Napa Valley or some other well-known and highly-regarded appellation."
Do Wine Ratings Really Matter?, The Winery Report, Spring 2012
"We’ve all likely bought a bottle of wine based upon its rating or score and have been disappointed. We’ve probably also bought a lower-priced wine that was unrated and been pleasantly surprised! The question comes to mind: How much do professional ratings impact the price of a bottle of wine?"
Testimonials
"I was first introduced to Greg over 10 years ago when the law firm with which I practiced engaged him to produce valuations of family-owned businesses for our clients. Greg brought not only the highest technical skill, but also disciplined focus and responsiveness, all cost-effectively. Even facing very challenging dynamics among the various stakeholders in the business, Greg’s composure and ability to communicate with clients never failed to keep the project on track. Now that I am in the financial industry I continue to refer clients to Greg, knowing they will receive superior service."
Jeralyn A. Seiling, Director, Merrill Lynch
"We worked with Greg to value our business after the unexpected death of our Mom in September of 2016. He came strongly recommended by our estate planning attorney, whom we trust implicitly. I immediately came to hold Greg in the same regard – he is thorough and professional, he takes the time to visit and ask questions and to listen to the answers so as to gain a strong understanding of what he is evaluating. And he works within the time frames requested. I would highly recommend Greg – this time was not an easy one for me, and he made this complex process quite easy. His honesty and integrity are noteworthy, and working with him was rewarding."
Beth Novak Milliken, President & CEO
Spottswoode Estate Vineyard & Winery