Behind the Flowers Winery Acquisition
High price-point and relatively large production of Sonoma Coast pioneer appealed to Huneeus
Walt and Joan Flowers and Agustin and Valeria Huneeus will join their wineries, bringing Flowers into the Huneeus portfolio, which includes Faust, Illumination, Primus and Veramonte as well as Quintessa.
Agustin Francisco Huneeus, Jr., son of Agustin and Valeria, declined to put a value on the transaction or the percentage ownership, saying only, "It's definitely not a minority interest."
The Huneeus family's current properties focus on wines made from Bordelaise varieties such as Cabernet Sauvignon and Sauvignon Blanc, while Flowers concentrates on the Burgundian varieties such as Pinot Noir and Chardonnay for which the Sonoma Coast is best known.
Huneeus added that one of the reasons the deal was of interest was that the Flowers wanted to stay involved. "This partnership is a rare match between two like-minded families making great wines. We are committed to making wines from unique vineyard properties and to remaining family owned. It's also great property," he noted.
The Flowers land lies on a ridge top only two miles from the Pacific Ocean in Northern Sonoma. It consists of about 600 acres in two estates, Camp Meeting Ridge and Flowers Ranch, of which 88 acres are planted, according to Huneeus. He said about 10 more acres could be planted, but the rugged, forested terrain--and environmental concerns--make planting challenging.
The Flowers bought the land in 1990, when it was still considered too cold to grow winegrapes. They were pioneers in establishing the Sonoma Coast as one of California's most sought-after appellations for Pinot Noir and Chardonnay. Among the brands sourced from the area are Hirsch, Martinelli, Marcassin, Helenthal, Pahlmeyer, Peter Michael, Williams Selyem, Siduri and Littorai.
Huneeus noted that Flowers wines sell for up to $350 retail--when you can find them--a very high value for Burgundian varieties in California. Quintessa wines also are luxury products, retailing for $135 at present. He added that Flowers produces about 25,000 cases per year, a substantial amount for a company with a reputation as a tiny cult producer.
Demeter Group of San Francisco, Calif., an investment bank, advised Flowers Vineyard & Winery on the partnership.
Agustin Huneeus entered the wine business nearly 50 years ago in his native Chile. After leaving Chile, he ran worldwide wine operations for Seagram and became partner-president of Franciscan in 1985, where he developed Estancia and acquired Mount Veeder Winery.
In 1990, he and his wife Valeria, a Ph.D. viticulturist, purchased the Quintessa estate on virgin grapegrowing land in Rutherford, and also established Veramonte in Chile's cool Casablanca Valley.
Huneeus sold Franciscan Estates to Constellation Brands in 1999, retaining ownership of Quintessa and part ownership of Veramonte. His son Agustin Francisco Huneeus ran Franciscan Estates until December 2004, when he left to manage Huneeus Vintners and Quintessa with his father.
In 2006, Huneeus Vintners bought out Franciscan's share of Veramonte. It also introduced Faust, a non-estate Napa Valley Cabernet Sauvignon. Today, Agustin Francisco Huneeus, president Jim Harris and founding partner Jim Sweeney lead Huneeus Vintners. Tom Hinde is president of Flowers.
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