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Summer is creeping up on us, and that means drinks on a patio and summer weddings every single weekend - which both have something in common… wine! This is peak season for wineries, making it the best time to explore the booming winery industry in Canada.

Whether you’re interested in the allure of owning a vineyard or looking for a picturesque wedding venue, the Canadian wine industry is ripe with opportunities. 

This is a long one - so kick back and pour yourself a glass while we uncork the details of this industry! 🍷

INDUSTRY BREAKDOWN

The Canadian Wineries Industry: Pouring Opportunities

Canada's wine industry is not just growing; it's flourishing. With over 700 wineries spread across the country, this sector offers a blend of tradition and innovation. From the well-established vineyards in British Columbia’s Okanagan Valley to the blossoming wine regions in Nova Scotia, each area brings its own unique flavour and high-quality wines to the table. But it’s not just about the wine. Canadian wineries are becoming hubs for tourism and events, leveraging their beautiful landscapes for wine tours, tastings, and over 1,000 weddings annually​.

Industry Trends

When you think of “wine” or “wineries” I am sure you don’t think of the Great White North… Most people think of the rolling hills of Tuscany. But Canada produces over 65,357 tonnes of wine per year (which compared to Italy, is not that much, but for a country known for its cold climate, it’s pretty good!) Canada has four major wine-growing regions: 

Now let’s get technical for a second - Canada’s wine growing regions are situated within the recognized growing zones of 30 and 50 degrees latitude north. These climates are similar to those found in cool climate wine regions of Europe (see Canada does have something in common with the rolling hills of Italy!). Although small in scale by world standards, wine is a growing business in Canada, with wineries sprouting up wherever soil and climate permit the growing of productive vines. 

To navigate competition, many wineries are diversifying their revenue streams. Wine tours, tastings, and events like weddings have become essential. In fact, wineries have become popular wedding destinations, with thousands of weddings held annually at Canadian wineries, contributing significantly to their revenue.

The Finances

The Canadian wine industry isn't just about grape expectations; it's a robust economic player, contributing approximately $9 billion annually to the economy​​. This financial health is bolstered by the Wine Sector Support Program, which recently received an additional $177 million to help wineries stay competitive and innovative amidst challenges like climate change and market shifts.

Revenue streams for wineries are as diverse as the wine varieties they produce. Beyond just selling bottles, many wineries have expanded into offering wine tours, tastings, and hosting events such as weddings. These activities have become vital for financial health, with over 1,000 weddings held annually at Canadian wineries, adding a significant boost to their bottom line​​. This multi-faceted approach not only helps in spreading brand awareness but also ensures a steady flow of income throughout the year, not just during peak wine-selling seasons. Cheers to that! 🍷

Buy or Bust?

While challenges like climate change and market saturation (especially in British Columbia) exist, the industry's adaptability through diversified revenue streams such as wine tours, tastings, and events makes it a promising investment. With the summer season in full swing and the demand for “Instagram-worthy” wedding venues on the rise, now is the perfect time to invest in a Canadian winery. 🍇📈

Check out these Wineries for sale:

1. Turnkey Commercial Winery in New Westminster, BC - $425,000

2. Award Winning Winery and Tasting Room in Elkton, Oregon - $2,400,000

3. Wedding Venue, Winery, and Distillery with Real Estate in Abbotsford, BC - $8,990,000

Interested in a particular industry? Reply to this email with the industry you are curious about and keep your eyes peeled in upcoming issues. 👀 

DEAL REVIEW

State-Of-The-Art Winery

This week’s deal is a Nearly 10 Acre Award-Winning Winery located in the Fraser Valley, British Columbia.

Deal Facts 🔥

Green Flags 🟢

• Award-Winning Reputation: The business has a strong reputation for producing high-quality, award-winning wines, which is a significant competitive advantage.

• High Production Capacity: With a state-of-the-art production facility capable of producing up to 25,000 cases per year, there is substantial room for growth and scalability.

• Prime Location: Located in Langley’s “wine trail” and close to major highways, the winery has access to a large potential customer base from Vancouver and surrounding areas.

• Secure Long-Term Lease: The lease on the property is secured until 2036, providing stability and long-term operational security.

• Experienced Staff: The winery is not owner-operated, and the experienced staff will remain, ensuring continuity and a smooth transition for new ownership.

Red Flags 🔴

• Inventory Not Included: The asking price does not include inventory, which means an additional investment of $2,500,000 is required, significantly increasing the total cost.

• High Competition: The wine market, especially in regions like Fraser Valley and Okanagan, is highly competitive, which requires continuous marketing and innovation to maintain market share.

• Dependence on Leased Property: Since the property is leased, there is always a risk associated with lease renewals or potential changes in lease terms after 2036.

• Financing Requirements: The buyer must secure their own financing, which could be a barrier for potential buyers without ready access to significant capital.

Watch Our Video Breakdown 

For a more in-depth analysis, check out this video deep dive of the deal by our Founder, Morgan Tate:

Possible Deal Structure: This deal will require careful analysis and understanding of the inventory value. Given that many financial institutions will not finance the value of inventory - seller financing and/or a consignment agreement with the seller is your best bet (unless you have $3.9M cash at your disposal). 

This is a common issue with high-inventory businesses. A common solution is a seller financing note equal to the value of the inventory, paid down as inventory sells through post-sale. This isn’t the ideal situation for the seller, however, is the best way to manage risk as a buyer.

The results are in, and last time, you were super interested in this Auto Repair Shop! Although it would be nice to have all afford a Tesla, it looks like gas vehicles aren’t going anywhere and that means neither are auto repair shops.

Want to learn more about this deal? Reply to this email with a “send me more details” and we will connect you with the broker!

ADVERTISE

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TWEET HIGHLIGHT

Do you remember the show “8 Simple Rules”? Well think of this as “14 Simple Practices (to get your business to $100 Million)”. Like he said, there is no shortcut or quick fix to having a successful (potentially $100M) business. But nailing down the basics is pretty much as close as you can get to any sort of “guarantee”.

GOOD READS

Recommended Resources 📚

Below is a list of articles, books, and other resource we recommend for buyers or operators of small businesses!

1. You know we love sharing entrepreneur success stories - so here is one for the books! This guy went from working in software to running his own business in 15 days.

2. Just like everything else in this world, buying and selling businesses ebbs and flows with the tends. Check out the predicted trends of buying businesses for 2024.

THANK YOU

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See you next time!