E.&J. Gallo Winery has agreed to acquire The Ranch Winery, a custom-crush winery in St. Helena, Calif., located between Highway 29 and the Silverado Trail. The facility spans more than 70 acres and has a grape-crush capacity of 30,000 tons. It also has 4.6 million cases of bottling capacity and 8 million gallons of storage space.
The Ranch is one of the biggest facilities of its kind in Napa Valley. With land-use laws making it virtually impossible to build new wineries in Napa, this deal represents a major coup for Gallo.
“This is really a once-in-a-lifetime opportunity,” said Roger Nabedian, senior vice president and general manager of E.&J. Gallo’s premium wine division. “To have a property in the Napa Valley with 30,000 tons of crushing capacity come on the market is extremely rare.”
Gallo’s existing Napa Valley wineries—Louis M. Martini and William Hill—have a combined capacity of 15,000 tons. This deal now brings Gallo’s total Napa presence to 45,000 tons. “With this acquisition, our capacity in Napa will now triple,” Nabedian noted.
The Ranch was originally a Trinchero winery used largely for production of white Zinfandel during the 1980s. The facility was acquired by an investor group led by Napa winemaker Joel Gott in 2007, and it has since been used as a custom-crush facility for boutique winemakers, including Gott himself, who’s been both a stakeholder and client.
Gallo will honor all existing production contracts at The Ranch. The facility will continue to serve as a custom-crush facility in addition to handling some Gallo capacity, but it’s clear that the longer-term objective is to utilize The Ranch for Gallo’s own expansion plans in Napa, which will occur through organic growth and possible future acquisitions.
With this deal, Gallo will now own 15 wineries throughout California and Washington.
This report was published in collaboration with Shanken News Daily.