The Upside of Winery Consolidation

In general, consolidation in the wine industry is viewed with trepidation. That assumption by many is that as one winery buys another, then another then another, unfortunate things happen. Many assume the wine quality of the purchased wineries will suffer. Some assume the character of the purchased wineries will suffer.

But, here is an interesting benefit that I, and I’d bet many others, have not considered.

Take  look at the Franciscan Wine Club. Franciscan is part of the Constellation empire, the largest wine company in the world…I believe. They have estates and wineries of varying size across the globe. There most visible transaction here in America came when they swallowed up Mondavi. The company is broken up into a number of divisions.

Franciscan was the creation of Agustin Huneeus, a man of great energy and optimism. Centered in Napa Valley Franciscan always produced, and still does, wines of terrific character mainly from Napa Valley grapes. The winery was an early bit of meat, an appetizer, for what became the Constellation consumption of quality estates.

I have no reason to believe the quality of Franciscan wines have suffered since the winery was sold years ago. However, their place in the Constellation fold gives them the opportunity to create a rather amazing wine club.

Consider that in addition to offering member of the "Expressions of Terroir" Wine club wines from Franciscan, they also offer wines from sister wineries inside the Constellation fold including: Ravenswood, Mondavi, Mt. Veeder, Simi, Estancia and Vermonte. Club members always get 20% off the wines that are shipped, and another 30% off on any additional wines you buy after the shipment. (They also give airline miles) But what’s really cool is the amazing selection of wines that can be used to create the regular club shipments.

You’ve got the array of Ravenswood single vineyard wines, Mondavi’s reserve and appellation wines, Quintessa, the Simi Reserve wines, Mt. Veeder’s mountain cabernets, and list goes on to include library wines from nearly all these wineries.

What you have is an example of the positive benefits of consolidation to the consumer. The lesson, I suppose, is that the upside of consolidation in the wine industry is not something that only the accountants and Wall Street traders can appreciate.

Posted In: Wine Business


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