Wines & Vines Home
   
 
Welcome Guest
LOGIN |  CREATE ACCOUNT
 
ADVERTISEMENT
 
 
 
09.14.2011  
 

Wineries Win Financing for Upgrades

Improved efficiencies fuel major funding

 
by Peter Mitham
 
 
joe dobbes Wine by Joe
 
Joe Dobbes secured funds to finance equipment to increase production and storage capacity at Wine by Joe, Oregon's second largest winery.
Dundee, Ore.—Wineries aren’t just bringing in the grapes this vintage: Several have announced major new investments in their operations just prior to crush.

Vincor Canada, a division of Constellation Brands Inc., and Andrew Peller Ltd.—Canada’s two largest vintners—each announced expansion to their production capacity in recent weeks. Vincor received a CAD$750,000 grant from the Ontario government in August it to upgrade its press and crush capacity, capping investments of more than of $36 million in land, buildings and equipment during the past eight years. Andrew Peller, meanwhile, secured a repayable federal grant of more than CAD$1 million to fully automate its bag-in-box packaging lines at facilities in Grimsby, Ontario and Kelowna, B.C.

Vincor and Andrew Peller both emphasized the importance of the investments in allowing them to pursue opportunities in the value brands market, a segment also targeted by investments undertaken by Wine by Joe LLC, Dundee, Ore.

Principal Joe Dobbes recently secured “significant” funding (terms were not disclosed) from San Francisco-based Bacchus Capital Management LLC to boost production capacity and expand distribution. Dobbes is using the cash to acquire a hopper and destemmer-crusher capable of handling 25 to 30 tons per hour; increasing tank capacity by 90,000 gallons and, next year, upgrading pump and refrigeration equipment.

“Value-priced wines right now are doing better,” Dobbes told Wines & Vines, while standing in a vineyard of ripening Pinot Noir. “We have been profitable since Day One, and we have a great opportunity to grow.”

With production circa 119,000 cases per year, Wine by Joe is Oregon’s second-largest producer. The new capacity will help it boost production of house brands, without compromising its custom-crush capacity.

“We’re going to start putting more gallons into our own case goods,” Dobbes said. “We’re going to use that for expansion—internationally, nationally as well as direct to consumer.” Three brands—Dobbes Family Estate, Wine by Joe and Jovino—account for 25% of Wine by Joe’s annual production.

The new investment will help Wine by Joe stay competitive in the $14 to $20 per bottle segment of the market occupied by the Wine by Joe and Jovino labels. “There’s more emphasis on those: There’s more competition on those now, too,” Dobbes explained. “I think it’s more difficult quite frankly to make a value-priced bottle of Pinot Noir for $20 than it is a single-vineyard Pinot at $65—and make money. It’s more of a challenge.”

Greater production will help reduce per-bottle production costs, ensuring ongoing profitability in the competitive sub-$20 per bottle market.

What the financiers say
Peter Kaufman, a managing partner and co-founder with Sam Bronfman II, and Henry Owsley of Bacchus, said the past year has seen a growing number of opportunities for Bacchus as wineries consider refinancing or fresh investment. The financing for Wine by Joe follows deals earlier this year with California producers 30,000-case Andretti Winery, Napa, and 36,000-case Qupé Winery, Santa Maria. Bacchus is working on other deals, while 30,000-case Willamette Valley Vineyards Inc., Turner, Ore., secured $1.4 million in long-term debt from its own lenders for the purchase of land, equipment and capital improvements to its winery.

Kaufman, who will speak at the 20th annual Wine Industry Financial Symposium in Napa on Sept. 19-20, said there are many reasons for the surge in financing, but identified a few common factors.

“There’s lots of things driving it,” he said. “There can be good things driving the growth, or there could be a need to grow; to get your head above the parapet versus other wineries.”

In addition to building production in the sub-$20 per bottle segment, cutting production costs is a significant factor in the recent upgrades announced by Vincor and Andrew Peller. “The new automation combined with more efficient energy consumption via motors and controllers significantly reduces power usage,” according to a statement from Andrew Peller.

“The new equipment will upgrade the bag-in-box lines to today’s technological standard resulting in improved efficiency, less packaging material waste and longer product shelf life,” noted Agriculture and Agri-Food Canada when it announced funding for Andrew Peller’s new packaging lines.

SHARE »
Close
 
Currently no comments posted for this article.
 
CURRENT NEWS INDEX »


 
Wines & Vines Home
 
866.453.9701 | 415.453.9700 | Fax: 415.453.2517
65 Mitchell Blvd., Ste. A San Rafael, CA 94903
info@winesandvines.com
Wine Industry Metrics
 
Off-Premise Sales » Month   12 Months  
May 2015 $607 million
7%
$8,068 million
5%
May 2014 $569 million $7,651 million
     
Direct-to-Consumer Shipments » Month   12 Months  
May 2015 $141 million
4%
$1,896 million
14%
May 2014 $135 million $1,657 million
     
Winery Job Index » Month   12 Months  
May 2015 355
15%
256
20%
May 2014 308 213
     
 
MORE » Released on 06.15.2015
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 

Direct To Consumer
Wine Shipping Report
2015
 
Download full report »
 
 

Practical Winery & Vineyard Library
 
Search the PWV archive »
 
 

CALENDAR
  • July 7
     
    Sanitation Seminar, Napa
     
  • July 8
     
    Sanitation Seminar, Greenfield
     
  • July 9
     
    Sanitation Seminar, Solvang
     
  • July 9-10
     
    Wineries, Breweries and Distilleries
     
  • MORE »
 

READER COMMENTS
 
Article: Pull Red Blotch Vines, Get Paid »
 
Maybe this would be a good time for the USDA to allocate some of its...
Reader: Guest
 
Article: Wine E-commerce Remains a Niche »
 
This shouldn't be a surprise. E-commerce is only about 5-7% of overall retail across the...
Reader: Barbara Insel
 
Article: Pull Red Blotch Vines, Get Paid »
 
I worked for a year with USDA in Washington to get Red Blotch identified as...
Reader: Bob Dempel
 
Article: Pull Red Blotch Vines, Get Paid »
 
I'll bet anyone in Napa and Sonoma counties I can find GRBaV in their red...
Reader: Guest
 
Article: New York Wineries Going Green »
 
Bravo to Lakewood for being an early solar adopter in the Finger Lakes wine industry!...
Reader: Suzanne Hunt
 
 


Directory/Buyer's Guide — Your Wine Industry Marketplace
 
 
WINERY SEARCH
 
 
Advanced Search »
SUPPLIER SEARCH
   by Product
 by Company Name or Brand
 
Browse by Category »
2015 Directory/Buyer's Guide
The Wines & Vines Directory and Buyer's Guide
 
 
EXPANDED ONLINE SEARCH INCLUDED WITH PURCHASE
 
ORDER NOW »
 
LEARN MORE »
 
 
Wines & Vines Magazine
 
 
LEARN MORE »
 
SUBSCRIBE »
 
Digital Edition Now Available!
Wines & Vines Digital Edition Now Available
 
LEARN MORE »
 
ORDER NOW »
 
 
The Wines & Vines Online Marketing System
 
The Industry Standard winery marketing application
 
FREE LIVE DEMO »
 
VIEW VIDEO »
 
 
 
 
Latest Job Listings
 Cellar Master
 Paso Robles, CA
Cellar, Lab and Production
 Wine Sales Professiona...
 Southborough, MA
DTC, Tasting Room and Retai
 Executive Assistant
 St. Helena, CA
General Administration and
 2015 Virginia Harvest ...
 Delaplane, VA
Cellar, Lab and Production
 Sales Representative
 Chicago, IL
Sales and Marketing
 Sales Consultant
 New Haven County, CT
Sales and Marketing
 Tasting Room Associate...
 Dundee, OR
DTC, Tasting Room and Retai
 Hospitality Pro
 Healdsburg, CA
DTC, Tasting Room and Retai
 Enologist
 Prosser, WA
Winemaker/Enologist
 Vineyard Foreman
 Middletown, CA
Vineyards
 
More Job Listings >>
Follow Us On:
 
 





Home  |  About Us  |  Editors  |  Subscribe  |  Print Edition  |  Digital Edition

Advertise  |  Site Map  |  Contact Us  |  Privacy Policy
 
 
Copyright © 2001-2015 by Wine Communications Group, Inc. All Rights Reserved.
No material may be reproduced without written permission of the Publisher.
Wines&Vines does not assume any responsibility for any unsolicited manuscripts or materials.