March 13, 2025
Few things are as satisfying as enjoying a bowl of unagi over rice in Tokyo, prepared by a chef who has spent his entire life dedicated to the craft of perfecting this one recipe. I have the utmost respect for individuals who dedicate their lives in pursuit of being the very best at their craft, unbothered by the world around them.
Even more impressive is the individual who excels in multiple domains, over different seasons of life. I find this admirable not only because it is hard to be excellent at different things, but also because it’s quite common to see people who experience tremendous success actually enjoy the fruit of their success, rather that embark on the humbling experience of starting over from scratch, of being a beginner yet again.
Bill Price is one of these people. After a successful career as a consultant at Bain where he rose to the role of co-head of financial services, he transitioned to his second act as a corporate buyout executive.
In 1992, he founded the Texas Pacific Group (TPG), which is now one of the largest and most successful private equity firms in the world, working on buyouts of companies like Beringer, Continental Airlines, Petco and Burger King.
In 2006, Price scaled back from his role at TPG and started his third act, building out his holdings in wine vineyards. Today, Price is the proprietor of Price Family Vineyards and Estates, and has ownership interests in Three Sticks Wines, Kistler, Kosta Browne, Buccella, Gary Farrell Winery, Head High Wines, and others.
The Beringer Buyout
Beringer Vineyards is winery in St. Helena, CA, with a rich and storied history. Founded in 1876, Beringer is the oldest continuously operating winery in Napa. It was the first California winery to offer public tours and wine tasting following the repeal of prohibition.
The Beringer family sold the Beringer name and winery to Nestle in 1971. In 1996, Beringer was acquired by TPG for an estimated $350M. And a year later in 1997, TPG took Beringer public and acquired Chateau St. Jean, Stags’ Leap Winery and St. Clement.
In 2000, in a deal that created the world’s largest premium wine company at the time, Foster’s Brewing Group in Australia acquired Beringer Wine Estates for $1.5B. This was the largest wine company sale in both the US and Australian history, representing a roughly 4.5X from its enterprise value just 4 years prior.
In the previous fiscal year, Beringer posted $438M in sales across its various brands, including Meridian, Stags’ Leap, Chateau St. Jean and Chateau Souverain. Its less expensive Beringer White Zinfandel was the best-selling single wine in supermarkets across the US, according to data from Gomberg, Fredrikson & Associates.
The process of acquiring and selling Beringer was Price’s first professional foray in the world of wine. And he was just getting started.
The Vincraft Group
Seeded with $100M from TPG, Price partnered with Walt Kenz and Pete Scott, two former Beringer and Foster’s executives, to start Vincraft.
A year later, the trio acquired Kosta Browne, a premium producer of pinot noir and chardonnay for a reported $40M. This deal was particularly interesting because Kosta Browne didn’t own any of its own vineyards, and instead sourced grapes from a variety of grape growers.
While this results in less end-to-end control over the final product, the model is comparatively “asset-light” as the inventory can be purchased and options contracts can be negotiated ahead of time, resulting in higher return on capital. Contrary to popular opinion, the thesis was that the primary value driver for vineyards is the direct relationship with customers, as opposed to land value.
From a distribution perspective, Kosta relieS on their extensive mailing list to sell to customers directly, circumventing the 3-tier model where vineyards first sell to distributors, which then sell to retail. By cutting out the middle man, Kosta is able to generate higher margin per unit sold.
Price and his partners have utilized this same playbook in building their vineyard portfolio: buy small, capital-light vineyards with a long history of loyal customers. The team pushes the brands to find out everything they can about their customers, and create amazing experiences to deepen relationships with customers. Price and team have invested heavily into renovating the Trenton Roadhouse for Kistler, as well as restoring a 170-year old adobe for Three Sticks. It’s all part of the plan to create “intimacy” with customers.
Through this strategy, the brands have maintained strong relationships with their fan-bases, and can therefore charge full retail prices while completely cutting out distributors. Even at these high prices, Price claims that several of his brands enjoy 50%+ margins. Recent estimates for Price’s aggregate vineyard holdings value the portfolio in the mid-hundreds of millions of dollars.
To me, the most interesting aspect of Price’s strategy is how it contrasts with the strategies of some of the other brand acquisition houses like Duckhorn, Lawrence Wine Estates, or Constellation Brands. While some of these other shops appears to be focusing on rolling up large brands in the Napa region and using scale to consolidate operating costs, Price and team have focused on acquiring small, Sonoma-based vineyards, and operating each vineyard as a standalone company, each laser-focused on its own customer base. The amalgamation is something to be admired.
Resources
1. https://www.winespectator.com/articles/buy-small-think-big-46026
2. https://www.forbes.com/sites/richardnalley/2013/10/17/tpg-co-founder-bill-price-makes-great-wine-you-cant-buy/?sh=6c4c2747622c
3. https://digitalcommons.pace.edu/cgi/viewcontent.cgi?article=1007&context=business_cases
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