If Chapel Down sold up, it would make sense

Darling of the burgeoning English wine industry Chapel Down is a British booze success story like few others. Yet to grow further, there’s a chance ownership of that tale could leave these fair isles.

Today, Chapel Down announced it was undertaking a “strategic review” in a bid to bolster growth. Within its previously outlined strategy are plans to invest in new vineyards and build a new winery in time for the 2026 harvest. To achieve this aim, it appears to be mulling a sale. 

“Considering the timelines of these investments, the board believes that it is now appropriate to review the full range of long-term funding options that support this plan,” a statement to the markets today read.

If a sale is the aim, then it wouldn’t be difficult to execute. British wine is an increasingly big business, with over 940 vineyards across Britain accounting for nearly 4,000 hectares in 2023 and producing well in excess of 12.2 million bottles in 2022.

Is Chapel Down for sale? 

Defra states UK wine was worth over £10bn in 2022, with off-trade sales of still, sparkling and fortified totting up to £7.6bn. It is very much a market ripe for acquisition and scale.

Chapel Down is a giant in the sector, leasing and sourcing from 1,023 acres of vineyards in the south east of England, making it the largest UK wine producer with 1.41 million bottles sold in 2022.

If a sale was to occur, then Chapel Down CEO Andrew Carter, who took up position in 2021, is likely the right person to make that happen. After all, he does have previous and has spent the past four or so years building the wine brand into “the sector’s most valuable player”.

This vision is not too distant from his strategy for Chase. Carter headed the craft gin brand in 2017 and, after leading it through an extraordinary period of growth, brokered a sale to Diageo for an undisclosed sum in 2021.

As recently as September, however, Carter has denied there was intention to sell Chapel Down. But that’s now hard to swallow, since – just like with Chase – he’s made good on turning it into a bigger player than when he joined. Not only that, but Chapel Down is also one of the most marketable brands through tie-ups with the likes of Royal Ascot and England Cricket.

Who would buy Chapel Down? 

Its brand has become so strong that, when it listed on AIM in December 2023, shares shot up by over 15%. In its most recent accounts, pre-tax profits were up 87% to £2.3m and revenues up 15% due to a strong wine harvest. It is a very attractive proposition to would-be buyers. 

So, if a sale were to materialise, who could make the list of likely buyers?

Due to the category’s rising success, and the impact of rising global temperatures on traditional wine growing regions, English and UK wine is increasingly the target of foreign investment. US and continental wine houses including Jackson Family Wines in the US, France’s Taittinger and Pommery, and Freixenet in Spain have all snapped up vineyards in recent years. 

It’s therefore unlikely the brand will be short on interest, should it decide to sell up.