Available: Vineyard - Yolo County

VINEYARD IN YOLO COUNTY FOR SALE DETAILS
Company Overview: California Yolo County Vineyard
Client#: 1349
Annual Sales: $180,000
List Price: $1M
This is a unique opportunity to purchase an established, mature vineyard in a prime wine-growing area of California outside of the higher-priced Napa Valley. The vineyard recently renewed a contract with a major California winery to purchase 630 tons of Merlot at a set price of $450 per ton.

The vineyard is in the Dunnigan Hills AVA which is an American Viticultural Area located in the Dunnigan Hills, in Yolo County, California. Located in the northwest portion of Yolo County, the wine region has a Mediterranean climate that is less prone to frost than other parts of the Sacramento Valley. The largest winery in the Dunnigan Hills is R.H. Phillips, which has a 1,300 acres vineyard.

It's a good time to invest in mature vineyards, as the demand for both Merlot and wines in general is increasing at an estimated 6% per year internationally. Grape prices have risen steadily in the past few years, with California Merlot prices claiming a 13% increase from 2010 to 2011.

Annual sales for the vineyard have been approximately $180k. However, the renewed contract with the major California Winery for a higher per-ton price should yield substantially higher sales figures in coming years.

The vineyard has NO employees and is managed by one of the region's leading contractors, with over 400 employees.

The vineyard was planted in 1987.

Facilities

Size: Approximately 118 acres total
Acreage per contract: 76 acres of Merlot committed to major Cal. Winery
Facility Type: Agricultural
Expansion possible: Yes

Industry Overview

The global wine market is booming. According to London-based data and market intelligence group International Wine & Spirit Research (IWSR), the US and Asia will drive a 6% increase in global wine consumption between 2011 and 2015.

Rabobank estimates global wine inventories are at the lowest point of the past decade, as shown in its latest quarterly report on trends and outlook for the international wine market. Indications are that the industry has finally moved closer to balance after years of oversupply challenges. This tightening inventory comes at a time when consumer demand continues to grow and while production remains somewhat constrained.

Stephen Rannekleiv, Executive Director of Rabobank's Food & Agribusiness Research and Advisory (FAR) group and author of the report, says that In the U.S., the wine grape market remains tight, with very little domestic bulk wine available.

Prices have increased dramatically leading many wineries to move to secure supply via attractive long-term contracts with growers or through vineyard acquisitions and expansions.

As the short bulk market continues to persist, the production season in California is just getting underway. Initial reports show that the crop is currently expected to be above average.

Growth Opportunities

The existing contract with the major California Winery sets the price for 2012 through March of 2014. The price per ton ($450) established in the contract is already below the average price per ton for Merlot in California ($692 in 2011), and prices are continuing to rise as demand increases without a corresponding increase in production.

Production volumes have actually remained fairly constant, as it takes several years for a vineyard to mature enough for steady production.

Competitive Advantage

Yolo county has become a solid producer of quality Merlot and other red varieties. Not as well-known as its neighbor Napa Valley, Yolo County's vineyards are in high demand because of the considerably lower cost of ownership.

Reason for selling

Both owners, a husband and wife team, are retired - her from teaching, and him from his engineering position. The land was inherited by the wife and the couple planted the grapes in 1987 as an investment that has paid off quite well.

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