The sale of Ste. Michelle Wine Estates in December was not surprising, but it raised more questions than answers.
Here’s what we know so far: While SMWE is Washington State’s oldest and largest winery, it has struggled to find its footing for years, going through a series of owners and leadership strategies. When New York-based private equity firm Sycamore Partners bought SMWE for $1.2 billion from tobacco giant Altria Group in 2021, things went from bad to worse. Finally, in December, Sycamore sold all of SMWE’s Washington wine holdings to the Wyckoff family, which owns a large agribusiness company in Yakima Valley.
No sale price was announced but the deal includes all of SMWE’s Washington brands, including the flagship Ste. Michelle label, Columbia Crest and 14 Hands. Also included was the 109-acre Woodinville property that’s home to the winery’s iconic chateau and visitors center, three production facilities (Columbia Crest and Canoe Ridge in Paterson and Northstar in Walla Walla) and 2,000 acres of vineyards, including Cold Creek and Canoe Ridge.
As Goes Ste. Michelle, So Goes Washington
The fate of SMWE has always weighed heavily on the Washington wine industry. Few regions depend more on a single winery. At one point SMWE accounted for two-thirds of the state’s total wine production. In its heyday, SMWE made 7 million cases a year, but now it’s closer to 4 million.
“Ste. Michelle’s growth was the growth of Washington wine,” says Erik McLaughlin, CEO of Metis, a leading mergers and acquisitions firm serving the wine industry and based in Washington. “It’s a complete anomaly. It doesn’t exist anywhere else in the world.”
I spoke with a cross section of winemakers and vintners to get a perspective on what the sale means to the future of Washington’s wine industry. While most hold off judgment until more details emerge, the general tone is optimistic.
“I haven’t talked to anyone who doesn’t think this is a good thing,” said Mike Januik, who was a winemaker at SMWE from 1990 to 1999, when he started Januik Winery. Bob Betz, a pioneering Washington winemaker who worked from SMWE from 1976 through 2003, agrees. “I’m thrilled to see Ste. Michelle ownership back in Washington.”
A third-generation family business, Wyckoff family is well-regarded among Columbia Valley growers, but is generally unknown to consumers. The family planted its first vineyard in 1978 and has supplied grapes and bulk wine to SMWE since the early 1980s.
[article-img-container][src=2026-01/ns_ste-michelle-wyckoff-120825_1600.jpg] [credit= (Andrea Johnson)] [alt= Chateau Ste. Michelle.] [end: article-img-container]
“The Wyckoffs are pretty ideal,” said McLaughlin. “It’s not private equity, and its grape growing and winemaking are almost entirely supporting Ste. Michelle. So, they have a more vested interest in ensuring the success of this company than most other buyers would.” (Metis has advised Wyckoff but was not involved in the transaction.)
Multiple knowledgeable sources told me that several large California wineries were in talks with Sycamore to potentially buy SMWE. Names like Gallo and Bronco were mentioned, but Wyckoff was the preferred buyer. Sycamore was already in considerable debt to Wyckoff, sources said, and the Wyckoffs were interested in the entire business, not just cherry-picking specific brands.
That distinction is important when you understand what Sycamore wanted from the deal. SMWE’s debt was significant. As one winery executive told me, “Sycamore really took it on the chin with Ste. Michelle. They’ve been looking to exit this investment for a while.” Sycamore recently acquired Walgreens, and there was undoubtedly new urgency to rid itself of SMWE’s debt. “My guess is that their bankers were squeezing them on all of their other obligations in order to finance the Walgreens deal,” the executive said.
According to McLaughlin, Sycamore’s debt exceeded the sale price. “The seller’s not walking away with any cash, but that doesn’t mean the buyer didn’t have to show up with some cash,” he said. “The buyer paid a certain amount of cash to creditors or else the creditors would have just taken their chances in bankruptcy, and a certain amount of cash went to growers to pay off debt.”
Media reports suggest that Wyckoff might have partners in the acquisition, but CEO Court Wyckoff denied that. “The Wyckoff family is the owner of Ste. Michelle Wine Estates,” he said.
A Major Reset
Wyckoff is one of several growers with a custom-crush facility that quietly, almost invisibly, supply SMWE. The family’s Coventry Vale is a large production facility in Grandview. “That’s Ste. Michelle’s business model,” said McLaughlin. “Ste. Michelle produced roughly half the wine that they sell, and the other half is all custom production.”
That business model was established decades ago by previous owners that were public companies. Wine is a long-term, capital intensive business. It takes a lot of money to build wineries and plant vineyards, so it looks better on the balance sheet and tax return to pay someone else to do that.
The sale allows SMWE to reset the company financially without debt and leverage, which puts it in a better position to move forward, but challenges remain. “Wyckoff is not a brand builder,” Betz said. “You can make all the great wine you want, but you have to sell it. That’s sort of uncharted territory, it would seem, for Wyckoff.”
Indeed, Wyckoff has no experience in sales and marketing and will need to rely on the winery’s current management team: CEO David Bowman and CFO Anna Mosier. “Ste. Michelle has strong sales and marketing capabilities, and we’re excited to build on that expertise,” Court Wyckoff said.
From all indications, sales have continued to decline under Bowman and Mosier’s team, and as one former SMWE executive said, “If they can’t stabilize that, it’s going to put increasing pressure to continue cutting grape contracts and selling off facilities.” Since 2023, Sycamore had been dropping growers, with a plan to reduce grape contracts by 40 percent, but Court said there are no plans to continue that.
A New Chapter For Washington
As it stands, thousands of acres of vineyards already have been ripped out since 2023. At its peak in 2019, Washington had 60,000 acres under vine. “We’re quickly on our way towards 40,000,” McLaughlin said. “It’s inevitable that some of the capacity that was built in the industry, whether that be vineyards or production facilities, is going to have to be removed or idled. That’s already largely happened, but we’re still not all the way there. We’re going to have an excess amount of production capacity in Washington for a long time.”
But the Wyckoffs are optimistic about the future. “Coventry Vale has been an integral supply/partner of unfinished wine to Ste. Michelle for over 40 years and will continue to act in this capacity,” said Court. “Ste. Michelle facilities are critical to ongoing operations. We are going to spend the next few months getting to know the business and will be focused on making the right long-term decisions for Ste. Michelle and for the Washington wine and grape-growing industry.”
The mood among vintners and winemakers is more positive than it has been in years. Ryan Pennington, the COO of L’Ecole No. 41 who formerly worked for the Washington State Wine Commission and SMWE, said, “This is great opportunity for Washington to redefine itself more along the lines of Oregon, where you have smaller, largely family-owned, largely more premium and estate driven wineries.”
Jason Gorski, director of winemaking for DeLille Cellars, a midsized winery based near Ste. Michelle’s popular visitor’s center in Woodinville, agreed. “We’ve known that there needs to be new standard bearers. The Washington wine industry really leaned on Ste. Michelle to do the work for us. We need to be those standard bearers for Washington.”
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