Jim - I was thinking numbers like yours too, but it was all guesswork.
I looked for the Colgin sale too but couldn’t find anything.
In the past, Bryant has said they get between 1.1 and 2.8 tons per acre, but it’s usually on the low side. So for math purposes assuming 2 tons an acre at 60 cases per ton, that’s 120 cases per acre. They have 13 acres, so that gives them 1560 cases. Assuming your $4000/case, that gives them $6.2M, or about $480K per acre.
Those are all made up numbers though, and I don’t know EBITDA or how one sets a value on the revenue stream, because it seems like there’s a bit of mystery there.
As mentioned, Total wine sells Bryant. The prices at Total range from $189-699, depending on the bottling. I don’t know what the mix is, or what Total is paying. For high-end labels Total is often willing to take a loss because the labels bring people into the store and Total really makes their money on private labels and closeouts. So maybe they’re paying standard wholesale for Bryant, who knows. But I suspect they’re not selling a lot of Bryant anyway. And if Bryant is desperate enough to sell to Total, they’re probably offering substantial discounts elsewhere.
We haven’t bought Bryant for retail in several years. Wholesale pricing in NY was always nuts, and it got the point where most consumers buying the wine were getting it for less than we were. Easy pass.
Agree but do LOL at the state of “valuation” in today’s world…
Bryant: $1.7M profit… $125M valuation.
Uber: -$4B profit… $75B valuation
Tesla: -$3.4B profit… 36B valuation.
Uber and Tesla dream of the day they actually make a $1.7 million dollar profit.
Jeff Bezos (ie the richest man in the world) was criticized for years for not turning a profit and I think it has worked out all right. The difference between a winery and a tech enabled company is that you have an input (grapes) that is not infinitely scaleable.
I probably would have fired her too but not over this valuation dispute. Paying someone 400k to renegotiate a loan with the same bank is silly. Also if 300m in assets already backs up the loan why does the bank need the winery financials. Is that part of the collateral too? If they were concerned about current income you could easily give them something else that didn’t have the enterprise value of the winery in it. She clearly did a terrible job negotiating. Doesn’t he have a lawyer and or a cfo at the winery that can handle this?
I will say if his sales are way down and inventory is piling up, this story won’t help his sales. People that like the wine but stayed on the sidelines due to price can lay off now knowing this likely ends with lower prices eventually.
To quote the late Justin Meyer, There is no money in selling wine but lots in selling wineries.
Lots of wineries have sold for five to ten times annual turnover…let alone ebit.
If you go to MOMA there is a room full of Jackson Pollock paintings. This is the Don Bryant jr room. Or they on loan or a gift?? Dunno…
Helen Turley told me Don once paid $40 million for an Ellsworth Kelly…Don must have doing well then. Another friend told me he once hosted the entire St Louis Rams team after the super bowl they won…players, coaches, wives…all at a sit down dinner at his house…don’t think they had to use card tables…
Ever since I started selling barrels to cult wineries --and I’m trying to quit–people have said that these wineries created an artificial shortage. Of course, what’s an artificial shortage in Napa is the library of a prestigious chateau in Bordeaux.
Recently people wondered if Parker’s retirement spelled doom for the Guigal family. I don’t think so, but could the absence of Parker love hurt various cult wineries?? Or have they established themselves, just like Guigal? I don’t know, but for sure nobody could give a boost to a new winery like Parker.
We also have the question of generational shift. People have gone insane for Burgundy. Maybe all the guys who lined up for Bryant,etc retired and are now looking to drink what they already bought. Maybe the younger generation cannot afford Bryant etc so they are all clamoring for Popelouchum…
Also, a lot of Berserker discussions show people buying a label of long agers for a number of years, then deciding they’ve got enough of those and moving on. Tastes change. People correct to better line up their purchases with their consumption habits. It’s a tough business, and easy to see many reasons customers would fall away, perhaps quickly and dramatically, unpredicted, leaving them in a quandary. How do they bring in new customers or adjust to a new business model? Looks like they’ve found themselves a few years into a crisis.
It’s not always about scale though. Bezos had a sound model that could have been profitable at many points but he just kept pouring money back into the business. His model also grew and adapted. From selling one non-perishable item, he went to selling lots of items, then to being a platform for others to use, then to being a fulfillment center for others, then to digitizing his first product and producing hardware, then to selling storage, etc. Uber has no path to profitability at all, until they get rid of drivers. And if they think they’re going to make money delivering food or other products, Bezos will already be in that space. Tesla doesn’t seem like they have a path to profit either, although they have the good fortune of being in a business where their large competitors are ossified.
As far as Bryant goes, does anyone know how much of their product was sold overseas? I kind of think that they and the rest of the “cult” wineries are distinctly American and without a Parker to whip up hysteria every so often, there will be nobody to impress with a bottle. The Europeans not only have their own markets, their wines are also likely to be more acceptable to the Chinese as the politics are perhaps less of an issue, and the US after all, used them for the model in the first place. So maybe the wines will be like Guess jeans, or Calvin Kleins, that once commanded a premium but are now at TJ Maxx.
Good point about California wineries not having the Asian demand. i think that’s right.
As for Calvin Klein, I don’t think the problem was that fashion changed of demand dropped off. The problem was that they drastically expanded the range of products for which they licensed the name. In the short run, that boosted revenue, but they miscalculated and massively devalued the brand when you find it on $20 sunglasses and the like. At one point (in the 90s, as I recall), Klein was buying back dozens of licenses to try to restore the brand value, but it was too late.
Yeah, that’s probably right. Same with Pierre Cardin and many others. Once your brand is devalued, you’re pretty well screwed. It’s really hard to come back.
I think what has hurt Bryant family is the radical instability at the winemaker position since Helen Turley stopped making the wine, coupled with the winery hasn’t achieved at the level since Turley was making the wine. If I’m not mistaken, no one has lasted more than 3 years since Turley departed. Melka makes wines differently than Aubert, than Helen Kiplinger, than Todd Alexander, so unless they were all following the same formula, I have to assume there were some level of swings in what the wines taste like. I have only compared Turley vintages against non-Turley vintages, but would be interesting to taste one vintage from each era of winemaker.
I haven t been to the winery since Todd was there and I thought he did an excellent job. Helen came and went so quickly I forgot she was there and she is hard to forget!
