THE VINES OF MENDOZA
2013 OWNERS CONFERENCE
September 19, 2013
GOALS FOR OWNERS CONFERENCE
1.
Provide information to manage and enjoy your vineyard – and
make better wines
2.
Gather feedback to improve our CS, VM and WM
3.
Opportunity for sharing and friendships among owners
4.
Advance a framework for the commercialization of wines
5.
Drink some great wines and have some fun
AGENDA
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•
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Our Goals
About The Vines & the future
Private Vineyards
– About the Owners/Vineyards
– Farming & Winemaking Strategy
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•
•
•
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•
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The Vines Resort & Spa
Winemakers Village
Owner Benefits
Key Challenges
Expanded Client Services
Path to Commercialization
Questions & Answers
THE VINES – OUR PRIMARY GOAL
Make the best possible
quality wines with our owners
ADDITIONAL GOALS
•
Create amazing, personalized, wine experiences for our owners
•
Eliminate the headaches of vineyard ownership, winemaking and distribution
•
Create a learning environment where our owners can truly become winemakers
•
Create an efficient and cost-effective operation
•
Assist interested owners in selling their wines commercially
•
Create an excellent return for our investors
THE VINES
The Vines of Mendoza is more than
an extraordinary place. It’s a style of
living and being. Rooted in the
pleasures of making, drinking and
sharing wine, The Vines immerses
you in the delights of Argentine
culture, natural beauty, and warmhearted hospitality.
THE VINES TODAY
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•
•
•
•
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150 amazing staff
127 Private Vineyard owners
360 fermentations in 2013
1,500 acres – 670 planted
The Vines Resort & Spa opens on Dec 31
Winemakers Village opens in 2014
THE VINES – THE FUTURE
•
•
•
•
•
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Focus on efficiency, processes
95+ point wines
Greatest hotel in South America
Winemakers Village
Managed growth to 200 PV owners
Possible project in Europe
CORPORATE STRUCTURE
• 90 individual investors have contributed
$10.2M in equity to grow the company
• Board of Directors with 3 management
representatives and 4 investor reps (3 of
which are also PV owners)
PRIVATE
VINEYARDS
131
90
3.16acres 3.1acres 3acres 3acres 3acres 3acres 3acres
4 acres
4 acres
4 acres
4 acres 4 acres
4 acres
3acres
3.55acres 3acres
4 acres
3acres
5 acres
3acres
129a
3acres
3acres
3acres
2.46acres 3acres
3acres
3acres
64b
76b
54b
3acres
128a
64c
64d
3acres
3acres
4 acres
4.25 acres
4.34acres
1acre
1acre
3.1acres
3acres
126
3acres
4 acres
5 acres 3acres3acres
4 acres
3acres
5 acres
3acres
3acres
60
60a
1acre
128b
1acre
8 acres
5.6 acres
3acres
4 acres
3acres
3acres
60c
3acres
3acres 60b
3acres
4 acres
5acres
4 acres 5 acres
26b
185
8 acres
167
3acres
5 acres 5 acres
4 acres
5 acres
5acres
5 acres
170
8 acres
5 acres
4 acres
6 acres
3S
6.15 acres
7acres
4 acres
122
4 acres
199
1acre
207
3acres
209
113
103b
103a
105
4 acres
10 acres
3acres
107b
20.35 acres
3acres
114
208
6 acres
3acres
107c
106b
5.24 acres
8 acres
6.1acres
Revana 6
Winery
8.25 acres
MontañasdeUco
9
Winery
8
7.4 acres Pelleriti-Aznar
Winery
5.01acres
5S
200
7acres
2 acre
204
205
3acres
3.5acres
3acres
203
3acres
4.28acres
160
1acre
1
12 acres
12
Santiago 4.91acres 5
Achaval
4.05acres Michelini
Bros. Winery
6S
117
SERVICEAREA
7
13
5.48acres
3acres
202
3acres
116
3.7acres
156b
5.6 acres
201
206
3.35 acres
3acres
107a
3acres
5acres
2acres
3acres
6 acres
3acres
120
5 acres
112
8 acres
10 acres
121
4S
4.07acres
3acres
2acres
3.24acres
2S
3acres
6 acres
149
6.06 acres
7.7acres
165
6 acres
6 acres
10 acres
148
3.7acres 3.7acres
154
3acres4.5 acres
156a
3acres
146
3.7acres
7S
1S
SERVICEAREA
8 acres
123
155
153
3acres
3.7acres
147
152
187
145
144
7acres
5 acres 3acres
5 acres 5 acres
3acres
5 acres
124
3acres
151
6 acres
186
ac 1ac
1ac 11
188
89
1ac 1ac
192 193 1ac
1
a
c
1ac
190
191
5 acres
5 acres
6.5 acres
3.96acres
1acre
6 acres
1acres
1ac
3acres
143
3acres
169
3acres
10 acres
3acres
150
6 acres
3acres
142
4 acres
3acres
168
125
3acres
3acres
SERVICE
AREA
3acres
2.6acres
127
3acres
4 acres
141
3acres 3acres
5 acres
5 acres
5acres
3acres
64a
76a
129b
3acres 4 acres
4 acres
1.97acres
5 acres
4 acres
140
3acres
130
4
6.1acres
3
L&AWinery
9.8 acres
2
GimenezRiili
Pavi Winery Winery
7.2 acres
pr i v at e v i n eyar d est at es
win emaker s’ vil l ag e
MARKET&CAFE
TASTINGROOM
2007- 2012
AVAILABLE-PLANTED
700
SOLD- 2013 PLANTING
ARTGALLERY
PICNICAREA
WINERY
PINO
TG
RIG
IO
58%
14%
6%
7%
111
ABOUT OUR PRIVATE VINEYARD OWNERS
• 127 owners from 13 countries
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71% North America
17% Brazil
8% Europe
3% South & Central America
1% Australia
• Approximately 20 new PV owners per year
• Average vineyard size is 5 acres (smallest is 1 and largest is 19
acres)
OWNER GOALS
• 78% - Personal enjoyment (no
commercial intentions)
• 21% - Personal enjoyment and
limited commercial desires (at
least “break even)
• 6% - Commercial interest – PVs
as a business
THE VINEYARDS
• 670 acres planted through 2012
different varietals)
(18
• 100 additional acres will be planted in 2013 (including
3 new varietals - Carmenere, Sangiovese and
Teroldego)
• We have 190 acres available for future sale
VARIETALS PLANTED
C. Franc, 12.18%
Merlot,
7.34%
C. Sauvignon, 6.57%
Syrah, 6.20%
Malbec, 55.61%
Petit Verdot, 2.50%
Torrontes, 2.06%
Pinot Noir, 1.71%
Chardonnay, 1.42%
Tempranillo, 1.24%
Other, 3.17%
FARMING STRATEGY
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Production for maximum quality, maximum revenue or somewhere in between
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Super Premium (<2,000 kg/acre)
Premium (Plus) (2,000-3,000 kg/acre)
Commercial (4,000+ kg/acre - max quantity and revenue)
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Malbec grapes are worth 20-50% more than other varietals on the open market
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The Vines is building a brand around our grapes, which should create premium prices
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Regrafting is an option to change varietals
THE WINERY
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360 fermentations in 2013!
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Capacity is 290,000 liters plus the Gimenez Rilli
winery for Recuerdo
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We added a new building for barrel storage,
bottling, blending sessions and admin
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New bottling machine to enable greater QC,
flexibility and cost control
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New fermentation building as capacity is needed
(2015)
QUANTITY PRODUCED PER OWNER
301-999 Bottles,
16%
1000-5000 Bottles,
29%
<300 Bottles, 50%
5000-10000 Bottles, 4%
>10000 Bottles, 2%
WINE LEVELS PRODUCED (2013)
SUPER PREMIUM,
42%
PREMIUM, 47%
PREMIUM PLUS, 6%
BARREL FERMENTATION,
5%
WINES PRODUCED BY OWNERS
80.0%
70.0%
60.0%
50.0%
40.0%
30.0%
20.0%
10.0%
0.0%
WINEMAKING STRATEGY
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Overall quality is exceeding expectations and improving each year
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Blending pool provides flexibility
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Winemaking opportunities from neighboring vineyards
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Barrel fermentations are creating very interesting wines
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Shared fermentations available to decrease costs
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We are evaluating sparkling and late harvest options
THE VINES RESORT & SPA
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22 one & two bedroom villas to open for New Years Eve!
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70,000 square feet of construction
U$15M investment
Flying gym and massive spa (10,000 square feet)
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Running and biking trails through vineyard (2.5, 5 & 10k)
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Siete Fuegos with Francis Mallmann to open on October 14
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Rack rates from $400 to $1,700, based on season and villa size
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8 villas have been sold to PV owners
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50% off for PVE owners in 2014*
WINEMAKERS VILLAGE
• 12 boutique wineries at the entrance to the Private Vineyards
• Personal projects of Santiago Achaval, Marcelo Pelleriti & Pedro
Aznar of Clos De Los Siete, the Michelini Brothers, Gimenez Riili
and Alejandro Vigil of Catena
• PV owners Revana, Rob Lawson and the Neelands (Solo Contigo)
• The Vines market will offer picnic supplies, wine tasting, artisanal
beers and fresh ice cream
OWNER BENEFITS
• 50% off Resort rates in 2014
• 25% off Siete Fuegos & the Spa
• 50% off tastings & flights
• 33% off all wines in the online store
KEY CHALLENGES
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Politics – Cristina
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Argentine economy & inflation
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Import restrictions – paper for labels, capsules, etc.
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Utilities – access to power and water in Uco Valley
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Byzantine liquor distribution laws
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Security Zone Commission
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Ley de Tierras
INFLATION & COSTS
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Farming is a cyclical business
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Real inflation of 15% or more since 2009
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As a result, many wineries are making less wine, depressing the market for grapes
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The Vines has raised farming prices by 7% and winemaking by 6%
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Devaluation of the Peso is accelerating and inevitable (Blue dollar)
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Devaluation create opportunities for owners
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Vineyard management can decrease your risk
EXPANDED CLIENT SERVICES
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Document repository in the cloud
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Regional meetings, tastings, blendings, etc.
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More self service educational materials FAQs (wiki)
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Opportunities to connect/communicate with other owners
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Shared distribution and commercialization services
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Shared storage (NY)
PATHS TO COMMERCIALIZATION
• Online stores for owners (collective or custom)
• Assistance with brand launching, marketing, getting into restaurants
and retailers, etc.
• Sell wine in our Tasting Rooms
• MHW vs. setting up distributorships (regional?)
• Competitions/ratings
MISCELLANEOUS
• Advice on tax and estate planning
• Legal issues if selling wines?
• Pay bills in Pesos?
Q&A
NEXT OWNERS CONFERENCE
• 2014 in Rio de Janiero!
THANK YOU TO ALL OF OUR AMAZING
OWNERS AND FRIENDS FOR MAKING
THESE DREAMS COME TRUE