Cosentino’s Strong Consumer Support Not Reflected In Financials

An hour or so at Cosentino Winery’s Yountville tasting room will show the most skeptical observer that the pricey vintner has a strong core of fans and supporters that would be a credit to anyone selling wine.

Unfortunately, that isn’t reflected in the overall company’s financial situation or stock price.

SHARE PRICE: BRIEF BOOM FOLLOWED BY LONG, STEADY DECLINE

Cosentino Signature Wines (MCOZ.L) which trades on the London Stock Exchange’s AIM small-cap board, closed at 3 pence on May 6, near its all time low of 2.65p. The company went public in late 2005 at 128p, climbed as high as 141.5p on Sept.  18, 2006 then dropped to 25p by the end of that year. The stock rallied to 46 p in October 2007 and has been in decline ever since thanks to a steady stream of bad news, and gloomy financials.

The company’s annual report for 2008 is due this month.

A TASTING ROOM OPERATION THAT MOST VINTNERS WOULD ENVY

While Cosentino Signature Wines’ impenetrable tangle of multiple Limited Liability Corporations (mostly in Delaware) leaves the observer asking “why the complexity?” and “where has all the money gone?”  the Yountville tasting room offers total transparency on the loyalty and enthusiasm that wine drinkers have for Mitch Cosentino’s vintages.

On a rainy Saturday just before 11 a.m.,  the parking lot was full and the south end a tangle of stretch limos. Inside, people packed the tasting room bar three deep, all to get a chance to pay $15 for a tasting.

EVERY DEMOGRAPHIC, BUT TRENDING TOWARD YOUNG AND HIP

At one end, a group of eight or ten stylishly dressed Millenials, obviously one of the limo parties. Net to them, GenX couple, he in a blazer, she in an obviously aged Cosentino sweatshirt. Two others proudly wore vintage Cosentino shirts as evidence of their veteran connoisseurship.

Boomers were abundant as expected and a few old enough to have given birth to them. But the presence of so many young, hip, enthusiastic people spoke of customers into the future. It is an accomplishment many other wineries wished they could achieve — especially those, like Consentino, who sell wines costing up to $160.

Next to me, when a spot finally opened up, a man and his wife from Silicon Valley. Members of the Connoiseur-level wine club for 10 years, they said. It cost them $800 to $2000 per year, but they had bought still more wine at the tasting room.

Clearly, whatever is plaguing Cosentino, it’s not a lack of enthusiastic fans willing to pay their ultra-premium prices.