Brown-Forman has followed the offload of Finlandia Vodka this year with another portfolio consolidation move, this time in its wine business.
The Duckhorn Portfolio has agreed to acquire Californian Chardonnay specialist Sonoma-Cutrer Vineyards from the Jack Daniel’s brand owner in a transaction that will see Brown-Forman take a 21.5% stake in the wine group. Valued at around US$400m, the deal includes a $50m payment from Duckhorn to Sonoma-Cutrer’s current owner.
Once completed, the offload, which comprises the brand name along with six vineyards in two Californian appellations, will reduce Brown-Forman’s wine brand ownership footprint to the Korbel ‘California Champagne’ and Prosecco range. Sonoma-Cutrer’s annual sales most recently totalled $84m.
“Adding Sonoma-Cutrer to the Duckhorn portfolio will enhance one of the most respected wine portfolios in the industry,” said Brown-Forman CEO Lawson Whiting. “Moreover, we believe an equity stake in The Duckhorn Portfolio will be a valuable investment for Brown-Forman, allowing us to maintain a presence in the wine category while focusing resources on building our premium and super-premium spirits brands.”
Duckhorn’s interim CEO, Deirdre Mahlan, added: “Sonoma-Cutrer is among the fastest-growing major brands in the luxury Chardonnay category. This transaction … diversifies our portfolio of luxury American winery brands, and dramatically increases our position in the luxury Chardonnay category.”
Mahlan, who assumed the lead at Duckhorn on an interim basis two months ago, was previously Diageo’s North America president between 2015 and 2020. She also held the role of group CFO for five years before returning to her native US to head up the region.
Back in June, Brown-Forman readied the divestment of Finlandia to Coca-Cola HBC for $220m. The sale, which closed last month, marked the company’s exit from the vodka category.
Why Finlandia is surplus to Brown-Forman’s requirements – Comment
