Endeavour Group has signed an agreement with Moët Hennessy to acquire Cape Mentelle Winery in Western Australia’s Margaret River.
Moët Hennessy’s parent company LVMH had owned the winery for more than three decades. While Endeavour Group declined to reveal the sale price, industry sources suggested to the Australian Financial Review that it was between $18-20 million.
Globally renowned for producing award-winning wines, Endeavour Group said the acquisition of Cape Mentelle would bolster its fine wine portfolio, Paragon Wine Estates.
Endeavour Group CEO and Managing Director Steve Donohue said the acquisition of Cape Mentelle was an important next step in enhancing Paragon Wine Estate’s fine wine portfolio, giving the business a premium presence in Western Australia.
“Cape Mentelle founder David Hohnen once said ‘wine is a journey’. I’m excited for Cape Mentelle to join our Endeavour Group journey and help us create a more sociable future together,” Donohue said.
“Anyone who has tried a Cape Mentelle Cabernet or Chardonnay knows just how special this winery is. I’m absolutely delighted to welcome Cape Mentelle to the Endeavour Group and Paragon Wine Estates families and to see it continue to grow on a global scale, while giving more people across Australia access to its fantastic range of wines.”
Established in 1970 and one of the founding five wineries of the Margaret River, Cape Mentelle is a pioneer of many of the region’s renowned wine styles.
Donohue told The Australian that a winery in the Margaret River “was strategically the one piece missing” for Endeavour Group and said the company would hold off from making any additional purchases for now.
He added to the AFR that after a near 12-month sale process, bringing Cape Mentelle into its growing portfolio was like “striking gold”.
Cape Mentelle’s vineyards are home to diverse plantings and operate with many ingrained sustainability practices. Cape Mentelle is a member of Sustainable Winegrowing Australia and was the first winery in Western Australia to obtain the Entwine accreditation for its sustainability program.
Completion of the transaction will take place in due course, pending licensing approval. It will be business as usual for Cape Mentelle with key personnel to remain with the winery, including Estate Director Penny Dickeson, Viticulturist Dave Moulton and recently appointed Senior Winemaker Elois Jarvis.
Surging sales for owned brands
Paragon Wine Estates was established in 2019 following the acquisition of McLaren Vale’s Chapel Hill winery. Its brands include Chapel Hill Winery, Krondorf Wines, Riddoch of Coonawarra, Shingleback Wines, Oakridge Wines in Victoria, Isabel Estate in Marlborough New Zealand and Josef Chromy Wines in Tasmania.
Paragon is part of Endeavour’s owned and exclusive brands, which have seen a 30% sales growth for the company. Seven out of 10 of its retail customers in 2022 purchasing an owned beverage product – which includes wine, beer and seltzer.
The company’s Pinnacle Drinks arm creates and manages a broad portfolio of brands, which are sold through Endeavour’s hotels, stores and on-demand services, as well as to key strategic partners overseas.
Pinnacle Drinks also maintains a range of production and service assets from wineries and vineyards to wine brands and services.
These businesses operate three packaging facilities in the Barossa Valley, McLaren Vale and Gawler Belt, they also service the Paragon Wine Estate brands as well as Dorrien Estate and other third parties.
Endeavour Group’s FY22 results saw sales of $11.6 billion in its first financial year as an independently listed business.
The company said profit was driven by premiumisation, higher margin new products and demand for Pinnacle Drinks products.