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Let’s TalkE. & J. Gallo Winery Acquires Hahn Family Wines in Modesto, California
E. & J. Gallo Winery, a global wines and spirits producer based in California, United States, acquired Hahn Family Wines’ portfolio, a winery in California, United States, on June 20, 2023. The deal includes the entire portfolio of Hahn Family Wines and the Hahn Family Wines Tasting Room in Carmel-by-the-Sea.
Transaction Summary
The Facts of the Acquisition
- Target: Hahn Family Wines (target) is the 40th-largest winery in the United States. It has 1,100 vineyards in California, which it uses to produce its own premium wines. Its sales are estimated at 450,000 cases (12 bottles per case) a year.
- Acquirer: E. & J. Gallo Winery (acquirer) has been expanding its portfolio by distributing for smaller companies, acquiring vineyards through acquisition, and securing the supply of grapes from growers. Estimated sales of its products in the United States are almost 100 million cases (12 bottles per case) a year.
Our Take on the Acquisition
Acquiring the portfolio of Hahn Family Wines will expand E. & J. Gallo Winery’s (acquirer) premium wine portfolio. It was interesting to note that the transaction excludes the Hahn Family Wines’ (target) vineyards and associated assets. The Hahn family will retain the land and continue producing grapes. We expect E. & J. Gallo Winery will have established a long-term arrangement for the purchase of the entire production. The harvest will be used to produce the Hahn portfolio of wines. Under this arrangement, E. & J. Gallo would have had to pay less for the target and would have secured a long-term arrangement with a 1,100-acre vineyard.
The Transaction
| Date: | June 20, 2023 |
| Price: | Undisclosed |
| Purpose: | To expand product portfolio and sales volume |
| Acquirer’s Statement: | Steve Carlotti, senior vice president and general manager of Commercial Brands at Gallo – “For over forty years, the Hahn family and their incredible team have produced expressive terroir-driven, quality wines from the Santa Lucia Highlands, Arroyo Seco, Paso Robles and throughout the Central Coast. We are honored to welcome their brands into our portfolio. This acquisition reinforces Gallo’s strategy for continued growth while supporting our goal of delivering superior quality at great value to our consumers across all usage occasions.” |
| Seller’s Statement: | Thomas Duhameau, president of Hahn Family Wines – “I am pleased to transition our Hahn Family Wines portfolio to the E. & J. Gallo Winery. Not only do we share similar family values, but both organizations are deeply committed to creating a sustainable future. I am confident the Hahn family’s Central Coast wine legacy is in the best hands with the Gallo family.” The transaction excludes the Hahn family’s vineyard assets. |
Target/Seller: Hahn Family Wines
Company Information
| Target: | Hahn Family Wines |
| Website: | hahnwines.com |
| Type: | Alcoholic Beverages, Farmland |
| Locations: | Corporate Office: 37700 Foothill Road, Soledad, California, United States Tasting Room: Ocean Avenue, Carmel-by-the-Sea, California, United States |
Product Information
| Type: | Private, family-owned |
| Founded: | 1980 |
| Employees: | 62 (Self-published on LinkedIn) |
| Products: | Pinot Noir – Red wine from the grape species Vitis vinifera Chardonnay – White wine from green-skinned grapes Pinot Gris – Ripe, full-bodied red wine with notes of ginger and honey Merlot – Dry, medium-bodied wine from red-skinned grapes GSM – Red wine blend from the Grenache, Syrah, and Mourvedre plants Cabernet Sauvignon – Dry, full-bodied wine from red-skinned grapes Blanc de Blancs – Champagne produced from white grapes Blanc de Noir – Champagne produced from black grapes |
Financial Information
| Revenue: | USD $18.3 Million (Unconfirmed Source: Zoominfo) |
| Revenue per Employee: | USD $295,161 (Estimated based on self-reported number of employees and data from Zoominfo) |
Target/Seller Overview: Hahn Family Wines
Family owned and operated, Hahn Estate is located in the Santa Lucia Highlands, appellation of Monterey County, California. Founders Nicolaus and Gaby Hahn bought land in Monterey County in the late 1970s and have produced quality wines for more than 40 years since 1980. Early on, Nicky Hahn saw the wine grape growing potential of the Santa Lucia Highlands, and in 1988 spearheaded efforts to establish it as an American Viticulture Area (AVA). Today, Hahn Family Wines owns one of the largest shares of planted vines in the region, farming 650 vineyard acres in the Santa Lucia Highlands and another 450 acres in the nearby Arroyo Seco AVA. Hahn’s estate vineyards feature alluvial soil terroir and cool micro-climates, ideal for growing pinot noir, chardonnay, and other varieties. Hahn Family Wines’ portfolio of brands includes Hahn SLH, Smith & Hook, Hahn Appellation Series, Lucienne, Hahn, and Boneshaker.
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Explore Your Options NowBuyer/Acquirer: E. & J. Gallo Winery
Company Information
| Buyer: | E. & J. Gallo Winery |
| Website: | gallo.com |
| Industry: | Alcoholic Beverages, Farmland |
| Locations: | Modesto, California, United States |
Product Information
| Type: | Private |
| Founded: | 1933 |
| Employees: | 7,000 (Self-published on company website) |
| Products: | Pinot Noir – Red wine from the grape species Vitis vinifera Chardonnay – White wine from green-skinned grapes Pinot Gris – Ripe, full-bodied red wine with notes of ginger and honey Merlot – Dry, medium-bodied wine from red-skinned grapes GSM – Red wine blend from the Grenache, Syrah, and Mourvedre plants Cabernet Sauvignon – Dry, full-bodied wine from red-skinned grapes Blanc de Blancs – Champagne produced from white grapes Blanc de Noir – Champagne produced from black grapes |
Financial Information
| Revenue: | USD $5.3 Billion (2022) (Source: Forbes) |
| Revenue per Employee: | USD $757,142 (Estimated based on self-reported number of employees and data from Forbes) |
Buyer/Acquirer Overview: E. & J. Gallo Winery
E. & J. Gallo Winery is a family-owned winery with 15 family members actively working in the business. Established in 1933 and headquartered in Modesto, California, E. & J. Gallo Winery remains a privately held and ever-growing company that employs more than 7,000 people worldwide.
The company offers a broad array of products comprising more than 130 brands, including table, sparkling, and luxury wines, beverage products, dessert wines, and distilled spirits like vodka, tequila, and brandy. It is an exporter of California wine, with its products available in more than 100 countries, and it imports wines from Argentina, Chile, France, Germany, Italy, New Zealand, South Africa, and Spain. Additionally, Gallo imports spirits from Australia, the Caribbean, Italy, Mexico, the United Kingdom, and Venezuela.
It owns 19 wineries strategically located in wine regions throughout California, Washington, and New York and owns over 23,000 acres of vineyards across California and Washington. In addition, the company contracts with growers who help with a yearly supply of grapes.
The company has led the way in developing and refining new environmentally friendly practices such as minimizing the use of synthetic chemicals, fertilizers, and pesticides, recycling and reusing processed water, creating new wetlands, and protecting existing riparian habitats.
Recent Acquisitions by E. & J. Gallo Winery
- The Alixir Company (2023) – A zero-sugar canned wine company selling under the brand name Bev. The company is based in California, United States
- Denner Vineyards (2022) – A 130-acre vineyard and estate winery in California, United States
- Agave Loco (2021) – Owner of RumChata, a leading cream liqueur brand established in 2009
- Pahlmeyer Winery (2019) – A winery based in Napa Valley, California, United States
- Orin Swift Cellars (2016) – A winery established in 1998 in California, United States
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Sources
- Company Websites
- Other Sources
- Unconfirmed Sources