Duckhorn Portfolio, the owner of Duckhorn Vineyards, has had 11 consecutive years of year-over-year organic growth, with net sales growing 18% a year from fiscal 2015 to fiscal 2020 and that net income soaring 28% a year from fiscal 2015 to fiscal 2020, according to a preliminary registration filed with the Securities & Exchange Commission.
After the public offering, Duckhorn will continue to be controlled by TSG Consumer Partners, a private equity firm, the preliminary statement says. Its stock will be listed on the New York Stock Exchange under the symbol NAPA. The number of shares is not specified, nor is the offering price. The initial public offering will be made through underwriters led by J.P. Morgan, Credit Suisse and Jefferies.
“A majority of our wine is sold in the growing U.S. market which boasts over 500,000 licensed retail accounts according to Nielsen,” the offering statement says. It continues:
“According to Statista, the United States consumes more wine than any other nation and is expected to increase its global wine market share by volume from 13.6% in 2012 to 15.8% in 2020. According to data from Statista capturing on-premise and off-premise sales, the total sales value of wine in the United States was more than $53 billion in 2019, having grown steadily since 2012.
“While the COVID-19 pandemic has adversely impacted on-premise sales, including in bars and restaurants, it has benefited grocery and other off-premise sales. As a result, the total sales value of wine in the United States is expected to remain relatively resilient to the impacts of the COVID-19 pandemic.
“According to Statista, 2021 is expected to mark a return to long-term category growth, and total sales value of wine in the United States is expected to exceed $55 billion, nearly $2 billion greater than the pre-pandemic 2019 value,” it says, adding:
“Consumers in the United States have steadily increased their per capita spending on wine over time to $163 per year in 2019, up from $141 in 2017, equating to a 7% CAGR, according to Statista.
“Compared to peer countries, the United States experienced one of the highest annual growth rates per capita in wine consumption in 2019, and we believe the United States still holds ample opportunity for growth. For example, 2019 per capita consumption in France, the United Kingdom and Australia were $439, $347 and $425, respectively, according to Statista. We believe these favorable trends will continue and that wine will take further alcohol beverage market share in the United States, led by established brands with diversified portfolio offerings.”
The SEC filing says Duckhorn has “consistently increased our market share in the growing luxury wine segment, both before and during the COVID-19 pandemic, and we believe premiumization will continue to benefit our business as consumers seek trusted brands.
“According to data from IWSR, wine sold for $20 per 750ml bottle or higher outpaced the overall wine category from 2010 to 2019. During this period, the sales value of wine sold for $20 per bottle or higher grew at an 8.6% CAGR, compared to a 3.1% CAGR for the total U.S. wine industry. According to IRI data, the U.S. luxury wine segment grew at 20% in sales value in the twelve month period ending on October 31, 2020 and encompassing the period of economic uncertainty caused by the COVID-19 pandemic, compared to the same period in the prior year, while the overall wine industry grew 11% over the same period.”
Duckhorn is “one of only a few luxury wine producers of scale,” the statement says.