The Top Reasons to Invest in Fine Wine in 2023
Investors may want to pay close attention to the fine wine market. For one, the market could be worth nearly $1.2 trillion by 2028, according to Market Research Future. Two,“Internet users have significantly increased, and internet usage is rising. The majority of major participants in the market for premium wines and spirits plan to advertise their goods on social media channels.” Three,“there is a higher level of health awareness, followed by a sharp increase in disposable income, increasing people’s purchasing power. These are some reasons that are creating potential opportunities for the industry.” That’s all beneficial for companies like Gaucho Group Holdings Inc. (NASDAQ: VINO), LVMH Moet Hennessy Louis Vuitton (OTC: LVMUY), Vintage Wine Estates (NASDAQ: VWE), Constellation Brands (NYSE: STZ), and Brown-Forman Corp. (NYSE: BFB).
Also, according to Forbes.com,“Depending on whose stats you wish to believe, the US wine industry looks positively rosy: According to Research and Markets’ 2022 U.S. Wine Market Size, Share & Trends Analysis Report by Project, sales of wine (domestic and imported) topped $66.97 billion, with table wines dominating, followed by sparkling wines (most domestic), whose projected sales will rise 7.7% from 2022 to 2030.”
Look at Gaucho Group Holdings Inc. (NASDAQ: VINO) , For Example
gaucho group holdings, inc. (nasdaq: vino ), a company that includes a growing collection of e-commerce platforms with a concentration on fine wines, luxury real estate, and leather goods and accessories, announced today its growth strategy leveraging its previously announced $44 million ELOC. With this funding now in place, the Company believes it can lay the foundation for growth of its assets in lodging, hospitality, wine & spirits, retail, and e-commerce.
With an approved $44 million equity line of credit, the Company states it now has a funding mechanism for its growth plans in 2023 and beyond. This includes infrastructure expansion for its luxury vineyard estate development, Algodon Wine Estates, such as the build out of residential villas and commercial elements associated with the estate’s sports and hospitality sector, as well as marketing efforts targeting its lot sales program. The Company previously announced that it anticipates its lot sales program can potentially generate $5 Million or more in sales in 2023 alone, and its planned 60-room hotel and spa (which is also slated to include 30-50 residences, and for which the Company seeks to co-brand with a luxury hotel brand) could generate an additional $25 million per year of revenue once complete. With the Masterplan’s addition of 200 more lots, ranging in size from 2.47 acres to 6 acres, the Company anticipates the potential to generate more than $100 million in revenue.
Plans also target the Company’s high end wine products, Algodon Fine Wines, which includes marketing efforts to further increase distribution channels, e-commerce sales and international markets, such as Argentina’s neighbor Brazil, which is the world’s 3rd largest market for online wine sales.
The Company intends to continue efforts to scale the growth of its leather goods and accessories brand, Gaucho – Buenos Aires, which celebrated its flagship opening last year at the Miami Design District, located among the likes of widely recognized luxury retail brands such as Off White, Bottega Veneta, Gucci, and Chanel, and many others. The Company intends to target e-commerce revenue growth with an aggressive marketing campaign, as well the anticipated forthcoming launch of its Resort Collection and a luggage + travel accessories collection, later this year.
Scott Mathis, CEO & Chairman of Gaucho Holdings commented;“Being on the Nasdaq is very important for our company’s loyal shareholders, future growth, and for maximizing exposure. As we grow and scale, we can leverage our stock as currency to accomplish a“rollup” strategy for accretive acquisitions such as additional luxury brands synergistic with our own. This $44 million ELOC can also go a long way for growth. In the next 24 to 36 months our extraordinary real estate project is expected to have a new destination spa, world class gym facilities, an 18-hole golf course expansion, and more vineyard casitas as well. Anticipated for q4 2023, the restaurant renovation and final touches on the upgrade to the winery will allow them to now accommodate weddings and corporate events, and other large gatherings. In addition, the San Rafael airport is being expanded and the runway improved for larger aircraft and more traffic.
These can positively impact our ADRs and occupancy rates, as well as the value of our residential lots. Of our two hospitality properties, one of them currently generates positive cash flow through lease revenues and will be accretive to the company, and we expect the other to have substantial development opportunities. We believe both are in prime areas ripe for development, and we believe the valuation of the real estate is positioned to allow for substantial appreciation in the years ahead. Across all of our companies, we now have the means to up our game and get our story out to the world as we continue to grow.”
Other related developments from around the markets include:
LVMH Moet Hennessy Louis Vuitton, the world’s leading luxury goods group, recorded revenue of €79.2 billion in 2022 and profit from recurring operations of €21.1 billion, both up 23%. All business groups achieved significant organic revenue growth over the year (see table on page 3). Fashion & Leather Goods notably reached record levels, with organic revenue growth of 20%. Profit from recurring operations stood at €21.1 billion for 2022, up 23%. Operating margin remained at the same level as 2021. Group share of net profit was €14.1 billion, up 17% compared to 2021. Operating free cash flow surpassed €10 billion. Europe, the United States and Japan rose sharply, benefiting from strong demand from local customers and the recovery of international travel. Asia was stable over the year due to developments in the health situation in China.
Vintage Wine Estates, one of the fastest-growing wine producers in the U.S. with an industry leading direct-to-customer platform, reported its financial results for its first quarter ended September 30, 2022. Results include Vinesse, LLC acquired on October 4, 2021, ACE Cider, acquired on November 16, 2021, and Meier’s Wine Cellars, Inc. acquired on January 18, 2022. Pat Roney, Founder and Chief Executive Officer, commented, ‘Our first quarter results represent a solid start to the year as we continue to execute on our growth strategy. We delivered double digit sales growth for each of our business segments and strengthened operations while making critical investments to support our key strategic objectives. We made progress in a number of areas to improve operational efficiencies against headwinds from ongoing cost pressures and supply chain constraints. We still have some work to do and will continue to develop our infrastructure as we scale the Company. We have invested in talent, building strength in our leadership and finance teams and we are effectively integrating and growing our recently acquired brands. Overall, we are driving consumer demand for our excellent portfolio of diversified products while making smart investments to fuel growth.’
Constellation Brands , a leading beverage alcohol company, reported its third quarter fiscal 2023 financial results, which can be found here . For the quarter, the company reported basis EPS of $2.52, and comparable basis EPS of $2.83. Its wine and spirits business delivered strong relative performance across high-end wine and craft spirits portions of the portfolio outpacing corresponding segments of the U.S. and spirits categories. And, according to President and CEO, Bill Newlands, ‘Our Beer Business continued to outperform the market as the top share gainer for the sixth consecutive quarter. Our Wine and Spirits Business further advanced its strategy with our largest higher-end brands delivering growth significantly above the category segments. Looking ahead, we remain confident that we can continue to build on our strong track-record of solid growth and value creation.’
Brown-Forman Corp. announced that its Board of Directors declared a regular quarterly cash dividend of $0.2055 per share on its Class A and Class B Common Stock. The dividend is payable on April 3, 2023, to stockholders of record on March 8, 2023. Brown-Forman, a member of the prestigious S&P 500 Dividend Aristocrats index, has paid regular quarterly cash dividends for 79 years and has increased the cash dividend for 39 consecutive years.
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