He considers himself a sophisticated financial analyst, but Bill Price struggles with how to value a vineyard, he says in an article in the New York Times. Price is a founder of a large private equity firm who now owns a number of vineyards and wineries. While price is a key measure of value, it all comes down to the owner’s purpose, the article indicates. Some owners see it as a serious business, others as a hobby or trophy property. The purpose will drive the type of land that’s purchased, and the cost of the land will depend on the price of grapes, which range from $500 per ton to $10,000 per ton. Buying land and creating a vineyard could take up to five years before it bears fruit at an average annual return of 4% to 5% on the sale of grapes, the article states.
If you’re one of those struggling with winery valuation, take a look at What It’s Worth: Winery Value, which includes advice from top experts who work directly with wineries and study valuation issues associated with these entities.
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