Wine industry expert Rob McMillan, founder of the Premium Wine Division for Silicon Valley Bank, has written about the West Coast wine industry for years. Hes author of a new report that suggests as many as 10 percent of wineries will change hands in the next five years, and 31 percent of owners are willing to sell if circumstances and the offer is right.
That turnover in ownership could produce a sea change within the regional industry. Rather than a cause for worry, McMillan says, that owners anticipate selling demonstrates the viability of the industry.
With 4,989 wineries on the West Coast, the survey results imply that 524 wineries are strongly considering selling their operation in the next five years, he concluded.
McMillan projects the sales will include 98 wineries in Washington and 79 in Oregon. In California, 78 Napa County wineries will sell, and 59 will sell in Sonoma County, according to the report.
In addition, others said theyre open to a sale under the right circumstances.
McMillan said ownership change may be unsettling, but isnt necessarily a bad thing.
An exit ramp in a business segment is critical for its overall health, McMillan wrote. Consider the impact of an industry where there are no sales transactions. Exits would only mean abandoned businesses.
The premium wine business began to really take off some 30 years ago. McMillans report suggests that some of the entrepreneurs who built that nascent industry are looking to retire and pass the business to new blood. That is a good thing.
It tells us the industry has matured. At the same time it is sufficiently dynamic to become something more.