We are adding The Duckhorn Portfolio (NAPA) to our short list. 2022 favors different channels than the prior year as pandemic restrictions are lapped. Tasting rooms and on-premise are positioned to have the strongest growth while the off-premise channel pulls back further as consumers pour glasses of wine outside of their homes. The slowdown in off-premise, inflationary headwinds, and the challenges to new distribution while raising prices will challenge NAPA's performance in the coming quarters. NAPA is a trade duration short in Quad 4 as we think the company will have a significant role in the future consolidation of the luxury wine sector.
Our investment themes for The Duckhorn Portfolio:
We are hosting a Wine Industry Black Book today at 12:30 PM ET. We will present more detail on our investment thesis for NAPA and the future of the wine industry.
