Patience Urged in Winery Financing

Bankers, vintners, growers, distributors to mingle at Sept. 14-15 wine industry symposium
 
Napa, Calif. -- "One thing I've learned is that the wine business cycle is unique. Typically, it goes in 7- or 8-year circles or cycles. But there is no typical: What we're in right now is not where we'll be next year or in two years," according to David Freed, who'll give the opening remarks on the second day of the 18th annual Wine Industry Financial Symposium (WIFS).

Freed, chairman of the UCC Group, which owns premium vineyards, began acquiring vineyards in 1982, and he was a co-founder of WIFS in 1992. In addition to his presentation, "Thoughts on the Wine Industry," at 8:10 a.m. on Sept. 15, he'll take part in a panel on the afternoon of Sept. 14, "Equity & Debt Markets: Current Trends & Future Outlook," with William Bishop of BMO Capital, Peter Sitov, Union Bank and Hal Forcey, American Ag Appraisal.

Given his long involvement in the industry, it's not surprising that he says, "My take is perspective." His message will be, he says, mostly positive. "Give yourself a break. You've been here before. Have the patience to make it through the cycle. We have a product that's been around for thousands of years." The keywords, he emphasizes again, are "perspective and patience."

Freed says the concept of WIFS was born during another stressful financial period. "This whole symposium got its start over a very public, heated antagonism between bankers and the wine community back in 1991-92. Coming off the savings and loan mess, all the examiners came running to the banks." The examiners demanded explanations for many types of traditional loan agreements, he recalls. "The primary half-dozen lenders to the industry would not renew (longstanding) credit facilities."

When asked to address distressed winery owners who suddenly found themselves with reduced access to credit, Freed remembers, the bankers' horrified response was: "Are you kidding?" WIFS was conceived specifically to create an environment where bankers could explain what they were going through, and winery owners could begin to understand that a budget scrawled on the back of an envelope would not earn them financing.

Freed was pleased to observe that, over the years, "Many financial professionals have made WIFS their annual meeting with the wine industry." Organizers intentionally mix financiers and wine people at lunch and dinner tables, he notes. He hopes people from all segments of the industry and its allies will "make some friends, impart some knowledge."

Kathy Archer, president of the Wine Industry Symposium Group, which organizes WIFS and other annual events, says that this year marks the first in which major distributors will participate on a panel.

"Trends in the Wine Distribution System: How Do I Get Time and Attention as the World Around Me Consolidates?" will be the final session prior to Tuesday's wine tasting reception. The panel will include Bruce Herman, Foster's Wine Estates; Ted Jansen, Inertia Beverage Group; Dan Leese, 585 Wine Partners; Chris Underwood, Young's Market Co.; and Bill Cascio, Glazers. "It's a good sign of the times," Archer remarks.

Last year, WIFs drew attendance of about 250; this year, sign-ups are "slow but solid," according to Archer. There is still time to take advantage of the substantial early-sign up discount. Archer says that, because of the Labor Day holiday, any registrations that arrive online through Sept. 7 can take advantage of the early-registration discount: $775 per person rather than $950 per person for the full Monday/Tuesday package. For details and registration, visit winesymposium.com.