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Let’s TalkCustom Wine Producer Rack & Riddle Expands with Weibel Family Winery Acquisition in California
Rack & Riddle, a California-based still and sparkling, grape-to-bottle winery with cellar, wine lab, and bottling services, acquired Weibel Family Winery, a winery producing sparkling wine in Lodi, California, on July 31, 2023. The acquisition includes intellectual property (IP) – for example, IP rights to patents, trade marks, and grape varieties – and Weibel Family’s 90,000-square-foot winery. This addition to Rack & Riddle’s three other wineries makes it the largest premium, custom sparkling wine producer in the United States.
Did You Know?
Not every grape grower makes wine from their harvests. To explain, grapes are grown in a vineyard, and wine is produced in a winery. A vineyard doesn’t necessarily have an on-site winery, though some do have tasting rooms and sell wine. But these vineyards tend to buy or produce the wines they sell elsewhere.
A winery produces wine, and the term “winery” typically applies to everything involved in the winemaking process – property, equipment, warehouses, bottling facilities, and so on. But, when a winery uses the term “estate-grown,” it has its own vineyard.
Transaction Summary
Our Take on the Acquisition
Rack & Riddle’s (acquirer) interest in Weibel Family Winery (target), now Rack & Riddle Lodi, reflects the increasing consumption of sparkling wines in this sector. Through this acquisition, Rack & Riddle can instantly increase production capacity.
The Facts of the Acquisition
- Target: Weibel Family Winery is based in California and produces sparkling wines, merlot, and other wines under its own brand and as private and custom labels. The Weibel family has operated the winery for three generations.
- Acquirer: Rack & Riddle is a producer of still and sparkling wines. It has been in operation since 2007 and has a combined production space of 265,000 square feet; the Weibel Family Winery acquisition adds another 90,000 square feet. Rack & Riddle was formed in 2007 and is backed by private equity firm SBJ Capital.
The Transaction
| Date: | July 31, 2023 |
| Price: | Undisclosed |
| Purpose: | To expand Rack & Riddle’s wine portfolio. |
| Acquirer’s Statement: | Rebecca Faust and Bruce Lundquist, Rack & Riddle Co-CEOs – “We have purchased the Weibel Family operation, marking a milestone for Rack & Riddle. The trajectory of our business has clearly mirrored the growing demand in the United States for quality sparkling wine at all price points and methods. We look forward to bringing our collective sparkling experience to Lodi to enhance founder Fred Weibel’s legacy. Our goal has always been to be the best of all things sparkling.” |
Target/Seller: Weibel Family Winery
Company Information
| Target: | Weibel Family Winery |
| Website: | weibel.com |
| Founded: | 1959 |
| Industry: | Winery |
| Type: | Private, family owned |
| Total Funding: | USD $41.4 million |
| Employees: | 88 (Unconfirmed source: ZoomInfo) |
| Locations: | Head Office and Winery: 1 Winesmaster Way, Ste D, Lodi, California, United States |
Product Information
| Products: | Cabernet Sauvignon – Dry, full-bodied wine from red-skinned grapes Chardonnay – White wine made from green-skinned grapes Merlot – Dry, medium-bodied wine from red-skinned grapes Pinot Noir – Red wine from the grape species Vitis vinifera Sparkling Wine – A carbonated, or fizzy, wine made from any white or red grape Zinfandel – Sweet, full-bodied red wine |
| Market Reach: | United States |
Financial Information
| Revenue: | USD $25.8 million (Unconfirmed source: ZoomInfo) |
| Revenue per Employee: | USD $293,182 (i.e., USD $25.8 million / 88 employees = USD $293,182 – estimated based on the number of employees and revenue from ZoomInfo) |
Did You Know?
The global sparkling wine market size was valued at USD $36.7 billion in 2022, according to International Market Analysis Research and Consulting Group, and is forecast to reach USD $55.4 billion by 2028. That’s a compound annual growth rate of 7% during 2023-2028. Luxury hotels’ and restaurants’ use of sparkling wine for gourmet cooking is seen as largely driving this growth.
Target/Seller Overview: Weibel Family Winery
Through three generations, the Weibel family has been producing Champagne and fine wine, first in Switzerland and since 1938 after moving to California. Today the family continues to make various wines under the Weibel Family label. Weibel also provides private- and custom-label wines to industry partners, such as hotels, restaurants, and wine shops.
Sparkling wine can only be called “Champagne” if it is made in the Champagne region of northern France.
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Explore Your Options NowBuyer/Acquirer: Rack & Riddle
Company Information
| Buyer: | Rack & Riddle |
| Website: | rackandriddle.com |
| Founded: | 2007 |
| Industry: | Winery |
| Type: | Private with one round of private equity funding |
| Employees: | 150 (Company website) |
| Investor: | SBJ Capital: A private investment firm based in California, United States, with roughly USD $600 million of capital under management. It invests in founder- and family-owned consumer and services companies. The investment in Rack & Riddle was made in 2022, and the sum was undisclosed. |
| Locations: | Head Office and Winery: 499 Moore Lane, Healdsburg, California, United States Crushing and Cooperage* Plant: 4001 Highway 128 Geyserville, California, United States Bottling Plant: 22280 Geyserville Ave, Geyserville, California, United State |
*Cask, or wooden barrel, making and repair
Product Information
| Services: | Wine Services – Crushing, processing, lab work, and fermentation Bottling – Automated bottling service for different sizes Cellar Services – Temperature-controlled stainless tank and barrel fermentation and storage |
| Products: | Blanc de Blancs – Champagne produced from white grapes Blanc de Noirs – Champagne produce from black grapes Brut – The driest classification of Champagne, which is made with less sugar Rosé – Wine that incorporates some of the color from the grape skins, but not enough to qualify it as red wine Sparkling Wine – A carbonated, or fizzy, wine made from any white or red grape |
| Wineries: | Rack & Riddle Alexander Valley – 55,000 square feet Rack & Riddle Healdsburg – 135,000 square feet Rack & Riddle Geyserville – 75,000 square feet Rack & Riddle Lodi – 90,000 square feet |
| Market Reach: | United States |
Financial Information
| Revenue: | USD $42.2 million (Unconfirmed source: ZoomInfo) |
| Revenue per Employee: | USD $281,333 (i.e., USD $42.2 million / 150 employees = USD $281,333 – estimated based on the self-reported number of employees and the revenue from ZoomInfo) |
Did You Know?
The world produces 2.5 billion bottles of sparkling wine a year, according to Forbes, which is just under 8% of total wine production of 32.5 billion bottles. Here are the top five sparkling wine producing countries:
- Italy – 660 million bottles
- France – 550 million bottles
- Germany – 350 million bottles
- Spain – 260 million bottles
- United States – 162 million bottles
Buyer/Acquirer Overview: Rack & Riddle
Rack & Riddle was founded in 2007 with a mission to craft superior sparkling wines. Through years of dedication and thoughtful expansion, it has become one of the leading custom sparkling wine producers in the United States, with 3.5 million cases of capacity. It has three modern wineries in California with a combined area of 265,000 square feet. In addition to its own label, bottling services, and still wine services, it offers a private-label winemaking service to wineries, retailers, and distributors.
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