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Hi there

Welcome to the 14th edition of The Look Back. This week we’re back on the financial and Covid beats, along with some — as always — interesting data.

Today we’re looking at:

  • Why two California wineries are getting ready to go public, with one going down the SPAC route
  • New Belgium Voodoo Ranger’s impressive growth
  • Fresh analysis of political expenditures by drinks industry firms

...and more.

Let’s dive in.

- Josh, VinePair Co-Founder

#1 - California Winery IPOs On Deck

The Headline: “California wine companies are doing what hasn't been done in 20 years: go on the stock market'”
The Source: San Francisco Chronicle
What You Need To Know:
Two Bay Area wine companies, Santa Rosa’s Vintage Wine Estates and Napa Valley’s Duckhorn Vineyards, are planning to do something this spring that no major California winery has attempted since the late 1990s: go public.

Unlike their counterparts in the tech industry, the few California wineries that have gone public seldom found happy endings. Robert Mondavi Winery faced a hostile takeover by beverage giant Constellation; no Mondavi family members are involved anymore. Chalone Wine Group ended up in the hands of a spirits corporation that turned some of its once-great wines into bulk labels. Ravenswood Winery has been all but abandoned, and it’s unclear whether its new owner, Gallo, will resuscitate it.

Yet there’s reason to believe that Vintage Wine Estates and Duckhorn could turn the Wall Street winery narrative around, and industry experts say both are poised for success as publicly traded companies. (Bloomberg reported the Duckhorn plans, but the company has not confirmed its plans and declined to comment for this story.)

The fact that the deals to take them public may occur around the same time is partly a reflection of the current financial market, one enjoying low interest rates and flush with capital. But it’s also an illustration of how California wine has changed over the past 20 years: An industry built on romantic, family-run estates has morphed into something a little more corporate.
Our Take: It’s well worth your time to read the entire piece if drinks-related finance is your thing, as it's chock full of details about each company — and why their business models suggest that this time is different. Maybe it is, maybe it isn’t. Only time will tell. For some historical context, check out our piece from last December on another major public company’s foray into the wine business: The Story of Taylor California Cellars, Coca-Cola’s Forgotten Foray Into the Wine Industry.

#2 - There’s No Stopping New Belgium’s Voodoo Ranger

The Headline: “IRI: Craft Dollar Sales Up Nearly 20%; FMBs and Hard Seltzers Increase 48.9% in Off-Premise Scans”
The Source: Brewbound (paywall)
What You Need To Know:
Dollar sales of the New Belgium brand family are up 44.9% year-to-date, making it the 11th largest beer category vendor, surpassing Sierra Nevada during the first month of the year. In fact, New Belgium Voodoo Ranger Imperial IPA ($8.3 million) leapfrogged Sierra Nevada Pale Ale (nearly $7.7 million) in dollar sales during the month, to become the second-best selling beer brand behind just Blue Moon Belgian White and the top-selling IPA.
Voodoo Ranger has three of the top 30 off premise SKUs in craft beer year-to-date, and they are all seriously outpacing the category:
  • New Belgium Voodoo Ranger Juicy Haze IPA — +131.3%
  • New Belgium Voodoo Ranger Imperial IPA — +73.5%
  • New Belgium Voodoo Ranger Rotator — +53.3%
Our Take: The Voodoo Ranger lineup’s incredible tear over the past couple of years has perhaps not gotten the attention it deserves due to much larger, and faster growth of the hard seltzer category. Here’s what we had to say 10 weeks ago in our piece on the 25 Most Important IPAs Right Now:
The growth rate of New Belgium’s Voodoo Ranger Imperial IPA, particularly for a double IPA, is, as one VinePair staffer says, “bonkers.” Even after the brewery sold to Japanese global brewer Kirin, and the subsequent controversies involving Kirin’s connection to ongoing genocide in Myanmar, Voodoo Ranger continuously strolls onto and skitters off of supermarket shelves with unlikely swagger — to the tune of 85 percent growth in dollar sales in 2019. It’s among the top five best-selling IPAs on the market right now, and considering the size and scale of the brewery’s distribution — and its hefty 9 percent ABV — it’s clear this beer is potent for a growing number of American beer consumers.

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#3 - Covid Will Boost Big Wineries In 2021 And Beyond

The Headline: “Rabobank: How Long-Term COVID Impacts Favor Large Wineries”
The Source: Wine & Spirits Daily (paywall)
What You Need To Know:
“We see a context forming that will favor larger wine companies and create additional complexities for smaller players that are not sufficiently differentiated in the market.”

Bars and restaurants are among those most heavily impacted by COVID-related restrictions. As the on-premise recovers, Rabobank expects the channel to be dominated by larger chains. This poses a greater challenge for smaller wineries, who typically rely more heavily on independents. 

Rabobank outlines a few key implications on-premise recovery has for the wine industry, all of which give larger wineries a leg up. To wit:
  • Off-premise will maintain some of the market share gains it made during 2020. 
  • More chain restaurants will favor stronger brands with scale. 
  • Restaurant closures will skew towards independents, and those independent restaurants that do stay open will have existing wine stock they need to sell and will likely have more restricted wine lists moving forward. 
Our Take: This finding is in line with the concept of a K-shaped recovery for the drinks business that we first put forth at the end of last summer. The notion that there will be mass restaurant closures and that they will skew toward the independent isn’t just conjecture. Here’s what a National Restaurant Association member survey found in December:
Our research estimates that for 2020, at least 100,000 restaurants will close, but the initial scope of closures won’t be known until government statistics are released in the months ahead. 

“For an industry built on service and hospitality, the last six months have challenged the core understanding of our business,” said Tom Bené, President & CEO of the National Restaurant Association. “Our survival for this comes down to the creativity and entrepreneurship of owners, operators, and employees. Across the board, from independent owners to multi-unit franchise operators, restaurants are losing money every month, and they continue to struggle to serve their communities and support their employees.”

#4 -  One Good Tweet (Thread)

Be sure to click through for the ‘masterclass’ from Mark Byrne!

#5 - A Deep Dive Into Political Donations From The Drinks Industry

The Headline: “New Report Released—Politics Under the Influence”
The Source: Tom Wark’s Fermentation
What You Need To Know:
Over the past two election cycles (2017 – 2020) more than $230 million has been spent by the alcohol industry for political influence. The details of campaign contributions and lobbying expenses at both the state and federal level make up the content of “Politics Under The Influence”, a report I recently completed and that is released today:

This new report is based on information available in public databases that track campaign contributions at the state and federal level as well as spending on lobbying, again both state and federal. What will not come as a surprise to many of my readers or to those who have spent any time working in beer, wine or spirits is that it is the middleman wholesalers who contribute far and away the vast amount of political donations. In fact, The $55 million spent by wholesalers on state and federal candidates over the past two election cycles is nearly double what all wineries, brewers, distillers, and wine retailers spent collectively in the same time period.
Our Take: As others have reported, this data is in some ways a rebuttal to a widely circulated report about wine industry donations from last June (see our initial coverage of that report here along with bigger picture context from a marketing perspective). We view these two reports as more complimentary than contradictory — and should note that the AAWE set was added to and refined over time. That said, there is no denying the conclusion that Tom Wark reached about the outsized influence of the middle tier, especially when you look beyond presidential campaign donations.

Bonus Reads:

  • Bourbon Exports Plunge 50% In Wake Of Trump's Trade War (VinePair)
  • Tyranny of the Tickers — How Untappd Ratings Became Craft Beer’s Most Fickle Prize (Good Beer Hunting)
  • Q&A: Lettie Teague, wine columnist, The Wall Street Journal (Harpers)
  • Despite Dollar Growth, Share Gains Continue to Elude A-B (Beer Business Daily) (paywall)
  • Doordash stock falls after company drops first earnings report since going public (CNBC)

And that’s a wrap. We hope you found this newsletter informative and useful. Whether you did or didn’t, we’d love to know why at

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