Issue link: http://winesandvines.uberflip.com/i/591609
November 2015 WINES&VINES 111 PRACTICAL WINERY & VINEYARD BUSINESS How long will they stay in based on returns? This kind of money comes in about every 10 years. Then they find this is a lot more difficult than it was on paper. It is a classic cycle. Anytime the industry has outside investment it is a good thing, but I really question whether they will stick to it or not." " If you go to the American farmer, what is the average age? Sixty at least. What is going to happen to all that farmland? Consolida- tion is occurring in agriculture across the U.S.; the vineyard business is no different. A lot of that has to do with the intergenera- tional change that is occurring. Not every- one wants to take over the family farm from dad and run it the same way. We are talking about very big capital dollars these days. Investors play a role in providing some liquidity. Most of them hire professional management; many of them are family farmers who have expanded their operations to include management so they can spread their cost among a greater number of acres. It is happening in the almond and nut business. It is happen- ing to the vineyard as well." " It is better than someone buying it as a hobby. They are buying it like they buy a bond. They are buying it for the long-term land investment and the ultimate payoff and some return in between. We have seen that for 20 years. David Freed was one of the first people who started doing that. It is a good thing since there are people who are investing for the long-term who have an un- derstanding of the value of land and the wine business is very asset heavy." " In the state of Washington we are seeing tremendous investment really for the first time. We are seeing big tracts of land being sold to plant vineyards. Frankly we are happy. In California there has not been a rush to plant vineyards recently as much as in the past. There is definitely no shortage of business in the North Coast." " None really, but we have seen a lot of Asian investors come in to buy winery properties. But it does not really affect me for what we are and what we are doing. It is more of an opportunity for those first-gen, second-gen investors that are only going to be in it for four or five generations. It gives them a way to get out in time." " It just simply creates a bubble and makes assets impossible to purchase. There is a real bubble out there on vineyard pricing. I do not see the prices coming down." " More are coming. The industry and the communities need to understand it and SUMMARY The American farm is seeing institutional investment in all agri- culture from wine to almonds. How the small U.S. farmer will evolve from this remains to be seen. Outside investment poses a strong indicator of the wine industry's financial strength, part of a valuation cycle many have seen before. Yet, how long do these players plan to stay invested? Do they plan to invest in the communities? Is it sustainable? Or is there a bubble on vineyard pricing? Impact of acquisitions on the wine business Promote your wines to leading Zinfandel enthusiasts and extend your winery's relationship in the market. Join Us! We are champions of Zinfandel— America's Heritage Wine Become part of our proud legacy zinfandel.org • 530-274-4900 Zinfandel Advocates & Producers is a 501(c)(3) non-profit organization. ZAP is dedicated to advancing public knowledge of and appreciation for American Zinfandel and its unique place in our culture and history. You know how good your Zinfandel is...