Andrew Peller Goes Shopping

Well, that was an interesting day in wine country.

Today’s announcement by Andrew Peller Ltd. that the company has inked deals to acquire Black Hills Estate Winery and Gray Monk Estate Winery and has written a “letter of intent” to acquire Tinhorn Creek was indeed a shocking read in my email’s inbox this morning. Not the least of which because I was actually just getting ready to go to work at Black Hills, where I have been working part-time as a wine educator there. It was shocking that all three estate wineries’ purchases would be announced at the same time but in some ways, this should not be all that surprising at all.

This shows that the BC wine industry is consolidating and I believe that it is the way forward for some of the larger estates in BC wine. The biggest gains for these wineries is access to a much larger and potentially more connected sales teams. This will help some of them reach a wider national and potentially international audience beyond what they could have been capable of independently. To me, this is exciting because BC wine may now get to be more available in other markets and may be able to gain a wider recognition because of it.

Mission Hill has already acquired estate winery properties in a similar fashion. In recent years, they have acquired CedarCreek and the former Antelope Ridge / Domaine Combret property on the Golden Mile bench which is now known as Checkmate. If they couldn’t find a property to take over, they created a new one from scratch as with Martin’s Lane. Mission Hill has very much lead the way with the acquisition of smaller, premium properties. Although the jury is still out with how successful this has been, it appears to be relatively positive.

What people like about these estate wineries is their personalities and Mission Hill has wisely allowed these to remain or develop. For Peller’s new acquisitions today, the tasting experience at Gray Monk (with their Germanic-focused portfolio) is very different from the Black Hills Wine Experience Centre which is different still from Tinhorn’s modest tasting room and self-guided tours. Each has its own character and charm. Could these get lost in the future under ownership of a large corporation?

We have seen what could happen to small estate wineries in BC when they get rolled into a larger corporate body. The one that tends to raise the more ire amongst people who have been following the BC wine industry for a long time is the sad case of Sumac Ridge. Once an innovative and cutting-edge flagship estate winery that produced the first traditional method sparkling wine and introduced the first $50 bottle of table wine in BC (the red Pinnacle from 1997) among other things , it was quickly stripped of its prize possessions (Stellar’s Jay and Black Sage Vineyard wines) and reduced to the basement entry-level label under the thumb of Constellation Brands where it remains as the “anywhere, anytime” wines. Perhaps this will change as Arterra Wines Canada begins to initiate changes. We shall see.

Peller, however, is no stranger to purchasing estate wineries. Ontario wineries were acquired in the 1990s and then in 2005, Red Rooster was purchased around the same time as the company acquired Calona Wines. Rather than do what Constellation did in purchasing Vincor, Peller chose to close its historic facility in Port Moody and carefully centralize production in Kelowna, renovating the arguably more historic Calona property instead. They maintained the premium branding of Calona’s labels like Sandhill, and grew Calona beyond where Calona could have taken itself on its own. The same is true arguably for Red Rooster, who with talented winemaker Karen Gillis at the helm, has consistently made the term ‘over-deliver’ apply to many of her wines and has the awards to prove it.

With Peller being a Canadian company (the CBC report says that they are Ontario-based but let’s not forget that the company was actually started in Port Moody, BC) and a company that appears to respect the personality of each estate in question, this seems to be a very positive outcome for three estate wineries. Based on their corporate ‘personality’, it seems unlikely that they would coerce brands into a simple tiered value system the way that Constellation did a decade ago. Nor will they guild the lily in the nuvo-visionary style of Mission Hill. Peller is perhaps the most ‘Canadian’ of the large commercial wineries being that they seem to understand the value of working together for a common goal, slowly, methodically, and with careful insight and forethought.

Yes, Peller did create Baby Duck back in the 1970s. That was a long time ago and it’s time to move on. I, for one, and looking forward to seeing these estates will change and evolve over time. And if they hadn’t had Baby Duck when they did, writing out a $95M cheque would have been a lot more difficult today.

 

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