Next generation might be outsiders
By Dave BuchananA few weeks ago I ventured the guess that most of Colorado’s oldest wineries won’t be under the same ownership/management within 10 years because the current owners are nearing retirement age and there aren’t any family members coming up behind to take over. Now, a study reported on the Decanter Magazine Web site says “most American family wineries” aren’t making plans for an eventual transition and that leaves them “prey to corporate takeovers.” “Effective transition planning takes a minimum of five years, probably 10,” said Rob McMillan of Silicon Valley Bank and Scion Advisors to Decanter’s Panos Kakaviatos. “Although the survey shows that many people want a transition, only 10 percent are actually talking about it to the next generation.” McMillan was talking about wineries surveyed in California and Oregon but his words are just as true for Colorado. While it’s unlikely, given the current state of Colorado wines, that any major liquor conglomerates such as Constellation Brands will take a shot at a Colorado winery, what it does mean is without proper planning, the winery might go on the market simply to pay the estate taxes. The survey goes on to say most wineries were founded when the business was young and ‘cottage-based’ and the pace was slower. And while many wineries might consider themselves successful or at worst financially even, a change in generational ownership might cost 20 percent to 30 percent of the wineries’ total value, an amount most next generations won’t be able to afford.