Luxury Brands Buy Supply Chains to Ensure Meeting Demand

In the last six years, David Duncan has been on a buying spree. This Napa Valley-based winemaker and owner of Silver Oak Cellars hasn’t been splurging on fast cars or vacation homes, though.

He’s been buying up vines — close to 500 acres in Northern California and Oregon. It’s been a tough process, at times: He almost lost one site to a wealthy Chinese bidder. It was only when he raised his offer by $1 million that he clinched the sale at the last moment.

At the same time, Mr. Duncan also took full control of A&K Cooperage, now the Oak Cooperage, the barrel maker in Higbee, Mo., in which his family had long held a stake. These hefty acquisitions are central to his 50-year plan to future-proof the family business against a changing luxury marketplace.

As Mr. Duncan realized, this market faces what might seem an enviable problem: a surfeit of demand for its limited supply. The challenge the winery will face over the next decade is not marketing, or finding customers, but finding enough high-quality raw materials to sate the looming boom in demand.

Read entire article Luxury Brands Buy Supply Chains to Ensure Meeting Demand | Mark Ellwood | The New York Times
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