Napa Valley's Duckhorn Acquires Sonoma-Cutrer In $400M Deal

ST. HELENA, CA — Napa Valley-based Duckhorn Portfolio announced Thursday it has entered an agreement to acquire luxury Chardonnay producer Sonoma-Cutrer Vineyards from Brown-Forman — a 150-year-old company that owns Jack Daniel's products — for approximately $400 million to be paid in a combination of company stock and cash.

Sonoma-Cutrer Vineyards was founded in 1973 by famed vintner Brice Cutrer Jones and was one of the first, and most influential, pioneers in the Chardonnay boom that rapidly reshaped the American wine landscape. Over the next quarter century, Sonoma-Cutrer established more than 1,000 acres of Chardonnay vineyards and built Sonoma-Cutrer into one of America’s best-known wineries—helping to establish Sonoma County’s reputation as one of the world’s premium wine regions.

In 1999, Brown-Forman acquired Sonoma-Cutrer. Under Brown-Forman’s leadership, Sonoma-Cutrer continued to build on the legacy of excellence established by Brice Cutrer Jones, with investments in vineyard plantings and a state-of-the-art winemaking facility, as well as the addition of pinot noir to the Sonoma-Cutrer portfolio.

Brown-Forman’s leadership played a pivotal role in introducing Sonoma-Cutrer to new generations of wine drinkers, with the winery consistently dominating the “Most Popular Chardonnay” category in the Wine & Spirits Annual Restaurant Poll over the course of three decades. Today, guided by acclaimed director of winemaking, Cara Morrison, Sonoma-Cutrer is widely recognized as one of the new world’s greatest producers of chardonnay and is considered a Sonoma County benchmark.

Today, Sonoma-Cutrer owns six estate vineyards spanning 1,121 acres in both the Russian River Valley and Sonoma Coast appellations. It sells its luxury wine across the United States in the wholesale channel through distributors and in the direct-to-consumer channel. It is one of the largest U.S. luxury chardonnay brands by retail sales and among the fastest-growing major brands in the category.

Sonoma-Cutrer's highly acclaimed Chardonnay primarily sells for a retail price of $20-$50 per bottle. For the 12-month period ended July 31, Sonoma-Cutrer had approximately $84 million of net sales, unaudited.

This acquisition will enhance The Duckhorn Portfolio as a leading luxury —$15+ per bottle— wine company in the United States while rounding out its portfolio by significantly elevating the company’s position within Chardonnay, the No. 1 domestic white varietal, in which The Duckhorn Portfolio currently lacks a meaningful presence. Sonoma-Cutrer’s track record of strong growth and reputation for delivering renowned wines is an excellent fit with The Duckhorn Portfolio’s own uncompromising focus on excellence in winemaking, the company stated in a Nov. 16 news release.

"We are delighted to welcome Sonoma-Cutrer Vineyards into The Duckhorn Portfolio," said Deirdre Mahlan, the company’s interim president, chief executive officer and chairperson. "Sonoma-Cutrer is an iconic, highly acclaimed winery brand with a long history of crafting exceptional wines in a timeless style and is a perfect addition to our thoughtfully curated portfolio of luxury wines. Sonoma-Cutrer is among the fastest-growing major brands in the luxury Chardonnay category. We see opportunity to further accelerate that growth and enhance operating margins of the combined business. This transaction expands our presence and visibility, diversifies our portfolio of luxury American winery brands, and dramatically increases our position in the luxury Chardonnay category."

The transaction is anticipated to be completed in the third quarter of fiscal year 2024. Under the terms of the agreement, Brown-Forman will receive 31.5 million shares of the company’s common stock, valued at approximately $350 million based on a 60-day volume-weighted average price as of Nov. 1, 2023 — representing an ownership percentage of approximately 21.5 percent of the company post-closing. Brown-Forman will also receive cash consideration of approximately $50 million, subject to certain adjustments.

Pursuant to the agreement, Brown-Forman is entitled to nominate two directors to The Duckhorn Portfolio’s Board of Directors.

"We believe The Duckhorn Portfolio provides the capabilities, expertise and focus to take the Sonoma-Cutrer wines to the next level," said Lawson Whiting, president and CEO of Brown-Forman. "The Duckhorn Portfolio has some of the world’s most-respected luxury wine brands and Brown-Forman looks forward to participating in their future growth through a minority equity stake and board membership."

About The Duckhorn Portfolio

The Duckhorn Portfolio is made up of 10 wineries, nine state-of-the-art winemaking facilities, seven tasting rooms and over 1,100 coveted acres of vineyards spanning 32 estate properties. The Duckhorn Portfolio was established in 1976 when vintners Dan and Margaret Duckhorn founded Napa Valley’s Duckhorn Vineyards. Today, the portfolio also includes Decoy, Paraduxx, Goldeneye, Migration, Canvasback, Calera, Kosta Browne, Greenwing and Postmark. Sourcing grapes from its own estate vineyards and fine growers in Napa Valley, Sonoma County, Anderson Valley, California’s North and Central coasts, Oregon and Washington State, Duckhorn offers a curated and comprehensive portfolio of acclaimed luxury wines with price points ranging $20-$230 across more than 15 varietals and 39 appellations. Its wines are available throughout the United States, on five continents, and in more than 50 countries around the world.

About Sonoma-Cutrer Vineyards

Sonoma-Cutrer has been crafting wines since 1981 in the esteemed Russian River Valley growing region of Sonoma County, California. Its flagship wine, Russian River Ranches, was built on-premises and for over 30 years has dominated the Most Popular Chardonnay Wine & Spirits Annual Restaurant Poll. Its winemaking process, led by a female-driven team, is designed specifically to preserve the highest quality grapes, and the wines are aged in barrels made of specific French oak trees that are selected to fit the winemakers’ needs. Sonoma County is the first wine region in the world to be 99 percent sustainable. As a leader in this initiative, Sonoma-Cutrer prioritizes protecting the environment in all viticultural and winemaking processes. All Sonoma-Cutrer wines can be purchased at the Sonoma-Cutrer winery, as well as, through the wine club, Club Cutrer.

About Brown-Forman Corporation

For more than 150 years, Brown-Forman Corporation has enriched the experience of life by responsibly building fine-quality beverage alcohol brands, including Jack Daniel's Tennessee Whiskey, Jack Daniel's Ready-to-Drinks, Jack Daniel's Tennessee Honey, Jack Daniel's Tennessee Fire, Jack Daniel's Tennessee Apple, Gentleman Jack, Jack Daniel's Single Barrel, Woodford Reserve, Old Forester, Coopers’ Craft, The GlenDronach, Benriach, Glenglassaugh, Slane, Herradura, el Jimador, New Mix, Korbel, Sonoma-Cutrer, Chambord, Fords Gin, Gin Mare, and Diplomático Rum. Brown-Forman’s brands are supported by approximately 5,600 employees globally and sold in more than 170 countries worldwide.