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Napa Valley’s Duckhorn To Raise $100 Million in First Public Offer

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Duckhorn Wine Company, a Napa Valley-based portfolio of wineries headed by Duckhorn Vineyards, filed a notice with the U.S. Securities and Exchange Commission (SEC) on February 23, announcing its intention to go public and raise $100 million in an initial public offering. However, Renaissance Capital estimates it could increase up to $300 million.

Based in Napa Valley, Duckhorn has been operated by TSG Consumer Partners since 2016, a private equity company headquartered in San Francisco that controls $9 billion in assets. On February 23, they have listed under the symbol NAPA to trade on the New York Stock Exchange.

Duckhorn Vineyards, Decoy, Kosta Browne, Goldeneye, Paraduxx, Calera, Migration, Canvasback, Greenwing (in Washington State), and Postmark, are among the premium wines Duckhorn Vineyards manufactures and offers in all 50 states and over 50 countries at rates varying from $20 to $200 a glass. The organization still manages and maintains eight state-of-the-art wineries and 22 sustainably farmed Estate vineyards spanning 843 acres.

For the twelve months ending October 4, 2020, The Duckhorn Portfolio was the biggest premium wine supplier and the eleventh largest wine supplier by total market volume in the United States.

From 1,600 cases in 1978 to $117.5 million worth of sales in 2015

Over the last six years, the business has seen rapid revenue growth; comparative estimates for 2015 were $117.5 million in sales and $9.6 million in profits.Margaret and Dan Duckhorn built up a winery on a 10-acre property just north of the town of St. Helena, which still hosts its tourists’ facilities and key winery.

In the inaugural 1978 vintage, Duckhorn offered only 1,600 cases of wine. Since the beginning, the soft and easy-drinking Merlot has been the signature grape for their wines. Arguably Duckhorn is responsible for the Merlot trend in California, well played in the wine film, Sideways.

The IPO will raise money to support growth and future acquisitions as the business continues to expand. It will also encourage TSG to quit the company for $600 million five years after acquiring Duckhorn. Allegedly TSG was looking to sell the firm, probably to Constellation Labels, but that didn’t succeed.

It purchased Central Coast Pinot Noir maker Calera in 2017 and Sonoma Pinot Noir specialist Kosta Browne in 2018. Duckhorn manages and maintains eight wineries.

Merlot trendsetter

Duckhorn Vineyards has established a reputation worldwide and across the United States for its Napa Valley Merlot. It is one of North America’s prime producers of Bordeaux-style wine. Bordeaux blends do very well in the Napa Valley, a combination of Cabernet Sauvignon, Merlot, and Petit Verdot.

In the 1970s, many Napa Valley vineyards used the traditional Bordeaux blend. Duckhorn vineyards are renowned for being one of the first to focus on a 100% Merlot, arguably starting the trend for Merlot as a red wine choice.

In Bordeaux, especially in Pomerol, the right-bank wines also focus on Merlot. Dan Duckhorn felt the grape was underloved in North America. When it is used as a standalone variety, it can produce wines that are soft and seductive. It was a canny move at the end of the 1970s. The market was ready for premium wines with mass appeal.

Vineyard Sites of Howell Mountain

Dan and Margaret Duckhorn have always been interested in selecting the best fruit, whether from carefully sourced sites in the Napa Valley or their Estate.

The winery’s seven estate vineyards are scattered around the Napa Valley’s alluvial fans and the prized slopes of Howell Mountain, each with its unique microclimate.

Consequently, winemaker Bill Nancarrow has a range of vineyard blocks from which to select, each with distinct flavor profiles. He can harvest while the flavors are at their best and the tannins are at their softest by treating each vineyard block separately.

Grapes are hand-picked and hand-picked before crushing, and specific vineyards are collected often, picking only the mature fruit for each passage through the vineyard. In 2017, Duckhorn’s Merlot Napa Valley Three Palms Vineyard 2014 was Wine Spectator Magazine’s Wine of the Year.


Photo by Roman Klimenko on Unsplash