This past week, Treasury Wine Estates — the producer of Australian wine brand Penfolds — purchased DAOU Vineyards for approximately $1 billion. It’s a shocking price point given that DAOU is located in Paso Robles, not Napa Valley, which has recently seen a number of wineries sell for much less.
Despite the fact that the vineyard isn’t located in California’s premium appellation, DAOU has positioned itself as a winery that’s able to compete with Napa’s premium producers, putting forth wines with similar terroir and structure without the inaccessible price point. However, likely driving the eye-popping price tag is the DAOU’s luxury hospitality experiences, such as private tasting dinners at expensive restaurants around the country, and their annual members-only party held at the estate. Through hosting these experiences, the wine brand has been able to garner an audience that has some money to spend, and as such, it’s likely that Treasury Wine Estates is betting on DAOU being the next Caymus: a wine that can be easily produced on a mass scale while still retaining the image that it’s for successful people.
But could this be Ballast Point 2.0? In 2015, Constellation Brands purchased San Diego-based brewery for $1 billion only to offload the brand four years later for less than a tenth of the price after years of declining production. In order to not follow this same pattern, DAOU Vineyards will need to keep up its luxury reputation and to do so, the winery and Treasury Wine Estates will need to spend some serious cash.
On this episode of the “VinePair Podcast,” Adam, Joanna, and Zach discuss what may have made this sale happen, whether this price point makes any sense, and why Treasury Wine Estates is betting on DAOU to be the next Caymus.
Joanna is reading: Why Are So Many Wine Regions Dealing With Oversupply?
Zach is reading: Hazy IPAs Aren’t Over, They’ve Just Found Equilibrium
Adam is reading: Whiskey Reviews from David Thomas Tao