Winery acquisitions are occurring at a brisk pace. Why?

In the last twelve months, there have been over a half-dozen winery acquisitions in Washington, including Ste. Michelle Wine Estates, the state’s largest winery.

Why is this happening, and why is it happening right now? Below, I break it down.

Note that this is just my take. In all cases, there are details that I am not privy to. There’s also much more to each of these deals than the simple manner in which I’ve laid them out.

With those caveats, I have put the acquisitions into four groups. These groups are not perfect, and, in cases, there is overlap.

In for a penny, in for a pound

One of the trends has been growers acquiring wineries. In Washington, unlike many areas of the world, most wineries do not have estate vineyards. Rather, growers and wineries work in partnership, contracting fruit.

This is mutually beneficial in good times. However, when wine sales slow, or a winery becomes overextended, it can become problematic. Payments to growers and other partners can slow or stop. That is a threat to the grower’s business that they don’t have any control over.

How do you get greater control? One option is to purchase the winery.

The acquisition of Ste. Michelle Wine Estates (SMWE) by Yakima Valley’s Wyckoff family last December fits into this category. The Wyckoff family has partnered with SMWE for decades, both as a grower and as a wine producer. There were considerable financial ties between the two companies before the acquisition.

The acquisition of