UNDERPOTENTIALIZED: Opportunity for Serious Investor
With Knowledge of Wine Export Market
VINEYARD:
The vineyards have about 50 acres of certified organic vines, including merlot, malbec,
semillion, syrah, chenin and ugni blanc.
There is an additional 16 acres of vineyard in common table wine -- muscatel and pedro
jimenez, and another 2.5 acres of syrah.
Grape production on the organic vinyards are averaging about 4,000 kilos per acre,
in part because organic vineyards produce lower yields. The organic vineyards are
sufficient to produce 200,000 of white wine and 100,000 bottles of red wine annually.
There is another 50 acres off site which includes about 45 acres of grapes in cabernet,
syrah, chenin blanc, chardonnay, pink muscatel and pedro jimenez. This property includes
a worker's house with water and electric.
The fourth vineyard property is 33 acres with 27 acres in malbec.
WINERY:
The winery operation is certified organic, and actually consists of
two wineries that sit side by side. Capacity of about 1.2 million liters
.
In 2007 they turned 1.15 million kilos of grapes into wine -- some from the extra vineyards
described below, and 500,000 kilos from third-parties. Most of the wine was sold in bulk
to other wine operations, and they only bottle about 50,000 to 60,000 bottles a year with
their own labels.
The bottled wine was mostly sold on the domestic market, with negligible exports to
Italy and Costa Rica. Wine was also sold in bulk to China and Russia.
The winery is fully equipped with a bottling and labeling line, refrigeration equipment
to cool wine during fermentation, pumps and storage tanks, wine presses, a forklift
and crates, and all the other miscellaneous equipment necessary for elaboration.
HOTEL & RESTAURANT (POSADA):
A hotel with eight rooms has been completed and is marketed as a "Posada" stay
offering extra activities like horse-back riding, tours, winery experiences, etc.
They've done a great job of creating character by renovating the old house where the
hotel is located. The designer incorporated old oak barrels into wood floors, has created
an underground brick tunnel between the restaurant and the wine tasting rooms (which
also serve as a wine cave), and created an environment that would serve nicely as a
wine retreat resort for upscale clients. Simply beautiful, there is also new small
pool right next to the hotel.
The restaurant is now in operation, offering set-menus of about US$20 per person
with wine from the winery included. Business is very brisk on weekends with locals.
Hotel room rates range between US$65 and US$95 per night. LOCATION:
The winery and vineyards are situated on Provincial Route 143, the
highway to Buenos Aires, in the county of San Rafael. It is located approximately 15 miles
north of the city of General Alvear, and 40 miles south of San Rafael.
VALUE: At current vineyard installation costs, installing 135 acres of vineyard would
run in the neighborhood of US$550,000 with an additional cost about equal to that to maintain
the vineyard for five years before full production.
EXPENSES:
They are claiming US$60,000 in labor and administration costs for
12 workers -- 3 full time in the winery, and 9 workers in the vineyards. Harvest costs
for picking the grapes (using additional labor) were averaged about US 4 cents per kilo
harvested. Costs to elaborate the wine is running about US 2 cents per liter, and bottling
costs with label, cork, labels, etc., run about US 65 cents per bottle packed in boxes of six.
PROS and CONS:
Forget this property as currently run as a cash cow. They're
and with some profit, but are not tapping into the potential. Most of the wine that they
produce is sold in bulk at a minimal profit. Costs are offset by wine they
produce for third parties, but I am guessing income is not great.
Potential is vast, but the current owners are not marketing correctly, or tapping into that
potential. Their ideas are good, but their budget to do so, and dedication to making
that happen are lacking.
At 50 percent occupancy, the hotel done right as a wine-tour destination should do
something in the neighborhood of $180K gross per year alone.
The winery has a capacity to do, from its own vineyards, 200,000 bottles a year in
organic wine -- the fastest growing market in wine sales at the moment -- and a wine that
generally gets premium prices. |
