12.18.2015  
 

Gallo Buys The Ranch in Napa Valley

Sprawling custom-crush winery offers 30,000 tons of production capacity

 
by Andrew Adams
 
the ranch winery gallo
 
The Ranch is permitted to produce more than 12 million gallons of wine per year.

Napa, Calif.—E. & J. Gallo Winery announced Dec. 17 that it had agreed to purchase The Ranch Winery, a custom-crush winery specializing in both small- and large-scale wine production in St. Helena, Calif.

The deal follows several other moves by Gallo that indicate one of the world’s largest wine companies is aiming for a bigger share of premium California wine production. Gallo acquired J Vineyards & Winery in March, Asti Winery in July and Talbott Vineyards’ winery and 500 acres of vineyards in Monterey County in August.

Located within 15 miles of Gallo’s Louis M. Martini and William Hill wineries, The Ranch Winery sits between Highway 29 and the Silverado Trail. The property spans more than 70 acres and includes a winery capable of crushing 30,000 tons of grapes, according to the statement released by Gallo.

By acquiring The Ranch facility, Gallo triples its crush capacity in Napa County and becomes one of the largest wine producers in Napa Valley.

The Ranch is permitted for 12.52 million gallons; Martini has a permit for 2 million gallons, and William Hill is permitted for 720,000 gallons. About half of William Hill’s permitted production is subject to the county’s “75% rule,” which requires three-fourths of the total production to be from county grapes. Neither The Ranch nor Martini is subject to the rule because both wineries predated its adoption.

In addition to the crush capacity, the acquisition includes 4.6 million cases of bottling capacity and approximately 8 million gallons of wine storage. “We are excited to have this highly capable winery in close proximity to our other Napa wineries. This purchase supports the company’s continued growth in the super-premium and luxury wine segment,” said Roger Nabedian, Gallo’s senior vice president and general manager of Gallo’s Premium Wine Division in the statement announcing the purchase.

As part of the sales agreement, Gallo will honor all existing custom-crush contracts, and a company spokesman said it plans to continue offering custom-crush services in the future. “We expect to continue offering custom crush and bottling services in balance with our own production needs,” said Lon Gallagher of Gallo brand public relations.

Gallagher said it was too early to say which of the company’s brands would be produced at The Ranch or if it plans to shift any of its existing production to the newly acquired winery. He added Gallo plans to interview any Ranch employees who have expressed an interest on working for the company after the acquisition is final.

The Trinchero family built the winery in 1983 on what had been a chicken ranch to support the exponential growth of Sutter Home white Zinfandel. The family later sold it in 2007 to vintner Joel Gott and partners.

At the time, Gott had been producing his Three Thieves brand at the facility with the Trincheros when he learned it was for sale.

Gott and his partners created a facility to support large custom-crush clients as well as a place for enterprising vintners to start making wine. The Ranch offered full-service custom crush—from processing to bottling—as well as “wine studios” in which bonded wineries could set up their own equipment in 2,100-square-foot spaces.

Demeter Group, a San Francisco, Calif.-based investment bank for alcoholic beverage companies, acted as The Ranch Winery’s exclusive financial advisor on the transaction. Terms of the deal were not disclosed. The sale was scheduled to close on Dec. 31, 2015

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