Wine Consolidation in the U.S. is a Non-Story

I don’t’ buy it. What’s all this talk of "consolidation" of America’s wineries?

While the total cases produced by the various wineries and labels owned and marketed by corporate wineries is huge, the number of brands (and partcularly the number of quality-oriented brands) controlled by corporate interests is miniscule compared to the number of American wineries from which you can buy great wine.

Wine Business Monthly
recently announced, "an overriding theme in the wine industry in 2004 was consolidation."

I’m not so sure it was a theme as much as consolidation was the word used to describe a couple high profile purchases in 2004. Constellat Brands got the Mondavi (the Icon), The Wine Group got Golden State Vintners (suppliers of bulk wine) and Diageo got the Chalone Wine Group (a collection of fine, medium-sized wineries). There you go…that’s the "consolidation".

Consider the observation of Ste. Michelle Wine Estates President and CEO Ted Baseler: "We’re still such a phenomenally fragmented business category. Most categories are tremendously consolidated. I don’t think we’re ever going to have that inn the wine business, but having a few large companies that drive the category is probably not unhealthy at all."

He’s right. Large wine companies create economies of scale, resulting in more competition among large producers, all leading to better value for those who just want to drink wine and not think about it. For those who do want to think about wine while they are drinking it, there are more choices of true artisan wineries than ever before.

Consolidation, in the overall scheme of things, is of very little consequence for the hard core wine lover. But, let’s look at it.

Who owns wineries that were once independent, quality producers before being purchased?

E&J Gallo Winery
Louis Martini Winery
Briddlewood Estate

Constellation Brands
Robert Mondavi
Franciscan Estates
Mt. Veeder

The Wine Group
Concannon Vineyards

Beringer Blass Wine Estates
Stags’ Leap
St. Clement
Chateau St. Jean
Chateau Souverain

Brown-Forman Wines
Sonoma Cutrer

Matanzas Creek

U.S. Tobacco
Conn Creek
Villa Mt. Eden

Diageo Chateau & Estates Wines

Allied Domecq
Clos du Bois
Buena Vista
Haywood Estate
William Hill
Atlas Peak
Gary Farrell

Heck Estates
Kenwood Vineyards
Valley of the Moon Winery

Jim Beam Brands
Geyser Peak
Wild Horse Winery

For those of us who prefer to delve into fine, artisan wines made by committed winemakers, consolidation is a non-issue. The only winery on this list that you have to be concerned about, and hope and pray it remains what it always was, is Gary Farrell.

Posted In: Wine Business


One Response

  1. Red Wine - Cabernet Sauvignon Chianti Pinot Noir - July 12, 2005

    Concannon, Central Coast, Petite Sirah 2003

    Producer: Concannon
    Wine: Petite Sirah
    Vintage: 2003
    Country: USA
    Appellation: Central Coast, CA
    Wine Type: Red
    Primary Varietal: Petite Sirah
    Grade: B+
    Designation: Good and Cheap
    Price: $13
    I was just thinking about how if I were to intro…

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