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Wine focused Venture Capital Fund Bacchus Capital Management invests in Madrigal Family Winery

Bacchus Capital Management has announced making “a significant infusion of equity growth capital” in Madrigal Family Winery in Napa Valley and that winemaker Ed Sbragia will become Madrigal’s consulting winemaster while Steve Cousins of Sbragia Family Vineyards assumes the role of COO.

The growth capital from Bacchus provides resources to build the Madrigal brand and business, winery president Chris Madrigal (right) said.

The announcement represents the sixth winery to join the Bacchus portfolio. Bacchus co-founder and managing partner Peter Kaufman said announcements about investments in two additional wineries will likely come soon, one of them is in Washington State.

“When my Grandfather came from Mexico to the Napa Valley in the 1930’s, he instilled a dream in his children that one day, in this beautiful place, we would have a business of our own while still working with the amazing fruit that grows here,” Chris Madrigal said in making the announcement. “My father, Jess, created a vineyard management company as well as this winery. Now, we’re at a point where we need external resources and proven expertise. A partnership with Bacchus will enable us to realize my Grandfather’s vision.”

“With our agricultural roots we could get wine all the way to the bottle but we really needed to expand inventory and our knowledge of sales,” Chris Madrigal told winebusiness.com. “These are key pieces that Bacchus is bringing to the table for us.”

“We live the American dream every day,” Madrigal said. “We’ve been able to see the dream in terms of what my grandfather was trying to build for our family. As a third-generation agricultural family, I’m continuing to live the dream that my grandfather had.”

Located on Highway 29, halfway between Calistoga and St. Helena, Madrigal Family Winery owns 40 acres of estate vineyards, selling grapes to wineries such Duckhorn, Cakebread, Shafer, and Joel Gott. The winery will continue to sell grapes but expects to transition fruit to Madrigal Family Wines over time.

Madrigal Family Vineyards produces about 6,000 cases each year, with half going through three-tier distribution and half sold direct-to-consumer. Its permit allows for 18,000 cases annually.

A separate venture, the Madrigal Vineyard Management Company, farms about 300 acres for well-known wineries – twelve clients.

“We are excited to have this winery and Chris as our partner in this string of pearls of wineries that we have investments in around the state and in the Northwest,” Sam Bronfman, Bacchus Co-founder and Managing Partner said.

Bacchus portfolio companies include: Sbragia Family Vineyards; Andretti Winery; Maritime Wine Trading Collective, a boutique wine import, production, and distribution company; Qupé on California’s Central Coast; and Wine by Joe in Oregon.

Bronfman said that with the two soon-to-be announced transactions and some money set aside, the current Bacchus fund will be fully invested. The company in the past has said that its investments would be in a range of $40 to $50 million.

Kaufman confirmed that Bacchus plans to raise money for an additional fund. “That’s absolutely on our radar screen,” he said. “We hope it’s between 100 and 200 (million dollars).”

“We continue to take a family-equity partnership approach,” Kaufman said. “We’re freeing up the owners to focus on what they are best at. We don’t have a one size fits all approach – each of the wineries get a tailored game plan depending on the needs, opportunities, and the team. … We think all of our brands have room to grow.”

Source: Wine Business

http://www.winebusiness.com/news/?go=getArticle&dataid=115089