Established Winery in California Seeking Funds for Expansion
Posted by: sally mechur on 12/27/2016 12:46:30 PM
Funding Needed:
Above $1mil
Agriculture & Fishery
Location :
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Consumer Products / Services

2017: Projection: $1,465,000
2018 Projection: $3,180,000
2019 Projection: $4,255,000
2020 Projection: $5,340,000
2021 Projection: $6,475,000

Financing Sought
$500,000 Bridge Loan initially. Followed by a $4.5 Million expansion package with $1.2 Million provided by Company and $3.3 Million by outside investors.

Use of Proceeds
$3.3 Million from investors will be used to expand current production facilities and increase marketing.

Additional Documents Available
Slide Deck, Business Plan, Executive Summary

Business Description
Ultimately, the success of a winery is its ability to produce and sell a wine that is appreciated by its customers. The Company’s founder and winemaker has a more than 35-year record of production and sales in the wine business. As the National Sales Director for a major national brand he oversaw the growth from 5,000 cases to more than 140,000 cases a year. The initial winery that the Company established dates back to 1997 with it first vintage of Napa Valley Reserve Cabernet. For several years the winery was a small scale operation producing a few hundred cases of Napa Valley Reserve Cabernet each year. The partners expanded the scope and breadth of the brand in 2004 adding different varietals and price points to the line-up of wines. Today the winery produces 14 different wines that are marketed throughout the US and to several other countries globally. The current production level for the Company is 15,000 cases a year. With the expansion funds in place, the production levels can easily ramp up to 100,000 or more cases a year.

The owners have created this new Wine Company to help expand the brand and to increase production. The Company was able to secure a very unique facility for this project at extremely attractive and competitive terms; a building with great historic significance and marketability. The building is part of the historic Kaiser shipyard dating back to World War II. During the war, the Kaiser Shipyard was the largest shipyard in the world. The historical significance of this site led to the intervention of the United States National Parks Department, City of Richmond, Port of Richmond, and the United States Department of Homeland Security.

This historic building that once played a vital role in building the Liberty and Victory ships of World War II is now a working winery and cidery with a beautiful, comfortable tasting room. It is very chic, with a gritty urban feel that reflects the building's history. The company is home to several wineries and cider producers. This fall marked the second harvest at the new facility. Since opening in March of 2016, the tasting room has become a popular destination to meet friends and sample some truly fine wines. Sales are growing and it is now time to further expand the production capability.

Unique Value Proposition:
The Company believes that winemaking is as influential and powerful as music. It should be inspiring, full of passion, and have the ability to bring people together, to celebrate life, happiness, and community.

The Company will market their own label as well as brands from other wineries. In addition, the Company will be able to offer “private label” services for customers who purchase a substantial number of cases. It is expected that the “private label” lines will produce significant returns for the Company as it has for other wineries. Sales will be handled by regional sales representatives.

Key Success Factors:
Both of the owners, a husband and wife team who are both jazz musicians, believe that drinking wine should be fun, and like music, is a creative pursuit. The winemaker is a frequent educator and lecturer on winemaking and brand strategies in the industry. His passion and respect for winemaking as an art are but one of the many drivers that feed his consistent success in the industry. He intends to continue his efforts to share his passion and wine business knowledge under the Company’s expanded brand.

Because in large part to the lessons that the team has learned while building other brands it is anticipated that the Company will be able to overcome many of the difficulties faced by start-up wineries.

Exit Strategy:
At the present time, the owners are looking to build up the brand and to sell the Company once the brand has become well established. The Company sale could mimic the sale of the Company that the co-owner helped to build up. This established winery was recently sold for $105 Million.

The owners are open to a variety of exit strategies for investors. These include providing initial interest-only payments with a balloon-style payment in the future, providing an on-going equity position and providing a standard loan-style payment plan with both principal and interest included.
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