(Bloomberg) -- Vintage Wine Estates Inc., one of the largest wine producers in the United States, filed for bankruptcy, citing a decline in demand for wine following the end of pandemic lockdowns.
The firm, which went public in 2021 in a combination with a special purpose acquisition company, listed roughly $475 million in assets and $400 million in debt in its bankruptcy petition filed in Delaware. Vintage Wine Estates said it intends to use the bankruptcy process to sell its assets.
The company, headquartered in Santa Rosa, California, was founded in 2000 with the acquisition of Girard Winery, according to court papers. In the years afterward, the company made an additional 28 acquisitions, giving it a foothold in other vineyards, production centers and brands, according to court papers.
Pandemic lockdowns buoyed wine demand as the company was preparing to go public. But the surge didn’t last. By 2023, consumers sought 377 million cases from the US wine industry, down from a peak of 445 million. The changes in drinking habits left California growers including the company with a surplus of wine grapes.
“The decreased demand resulted in a surplus of winegrape production in California vineyards, with 375,000 tons of winegrapes going unpicked,” Chief Executive Officer Seth Kaufman said in court papers. “Grape growers have torn out or burned acres of vineyards to avoid maintaining unprofitable idle land.”
Vintage Wine Estates also had trouble integrating companies following its acquisition spree and was forced to take writedowns on inventory, according to court papers. It also discovered accounting errors and was forced to restate certain financial statements. To turn around operations, the company cut staff and planned asset sales as part of a shift to prioritize more premium wine brands.
The company’s shares, which once traded for as high as $12, dropped on Wednesday to about 8 cents. Vintage Wine Estates is the latest former SPAC to succumb to Chapter 11, following at least 21 such bankruptcies last year.
The case is Meier’s Wine Cellars Acquisition LLC, 24-11575, US Bankruptcy Court for the District of Delaware.
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