Buying a Piece of the Action
Winery ownership at a reduced price
Lynne Marshall is intrigued by Argentina.
The Calgary wine lover plans to visit Argentina’s Mendoza wine region in the near future. A big fan of the nation’s wines, she’s been to the South American nation before.
But her next visit will be special. She’ll be going as an owner, not just as a wine lover.
Marshall is part-owner of Zorzal Vineyards and Winery, a venture that saw about 40 Canadian investors join forces with three Argentine brothers who had an option to buy 68 hectares of prime land in Mendoza’s Uco Valley.
Marshall first dreamed of winery ownership a few years ago while visiting Mendoza with a friend. Their imaginations were stirred by a piece of land in the shadow of the Andes mountains. But the expensive reality of starting a winery quickly snuffed the dream. Until the summer of 2011, that is. That’s when she learned Zorzal, launched in 2008, was looking for more partners.
She was surprised to learn the winery was located on the very piece of land she fell in love with years before. “It was meant to be,” says Marshall.
Zorzal is one of a handful of wineries built on the foundation of a large group of investors. The business model lets individuals get a taste of winery ownership at a reduced price. It usually takes at least $25,000 to join the action.
Wineries in Canada that follow a similar ownership structure include Black Hills Estate Winery and Therapy Vineyards, both in the Okanagan Valley.
Black Hills was already an operating winery with a cult following when a group led by Calgary businessman Glenn Fawcett bought the Black Sage Bench property in 2007. Therapy was started in 2004 when the ownership group, also gathered by Fawcett, purchased the old Red Rooster site on the Naramata Bench.
John Houghton, a Calgary lawyer and businessman, bought into Black Hills at the start. He says the experience has exceeded his expectations. A close bond has been built between the 456 investors, who each receive a share of the winery’s pre-tax profits, a case of Nota Bene, the winery’s flagship red blend, and first-in-line privileges to buy more.
“There’s a camaraderie around the investor group, there’s a camaraderie among the other vineyards and wineries out in the Okanagan and there’s a camaraderie around the management group,” says Houghton.
And the financial results have been as enjoyable as the wine. “I originally characterized it as a lifestyle investment, as opposed to purely a financial investment. That said, it is a very good business . . . our financial performance has been good,” adds Houghton.
For Marshall, winery ownership isn’t as much about money as it is about passion.
“It brings you together with a group of people where everyone shares a passion for wine,” Marshall explains. “I almost feel like I’m a member of a club now. We have this club where we all have something in common and it’s a nice thing to have in common.”
Bruce Murray, who bought into Zorzal after selling a couple of oil and gas companies, has enjoyed the benefits.
“First of all, you get a discount on the wine, which I guess, in a way, you can drink your profits. That’s the fun part, being able to say it’s your wine and your winery.
“It’s a great conversation piece,” adds Murray, Zorzal’s president. “As soon as you mention you’re involved in a winery, people just can’t get enough, because everyone kind of likes that. That’s kind of a dream of a lot of people.”