Norton Safeweb

Saturday, January 26, 2013

Consolidation in the Wine Industry

Wineries get bought and sold like any other small business, but it seems most of the selling is being done by the smaller guys and the buying by the big guys.

When you look at wine on a store shelf you see lots of brands from lots of different places. So there are many independent American wine brands, right? Well, yes there are a lot of small independents--mostly folks you never heard of or at least will never see on a store shelf east of California.

The big boys own a huge share of the American wine market. Gallo has over 50 labels and you won't see the word "Gallo" on most. They have almost one quarter of the market with their different brands. Even locally here in Sonoma County in many stores or restaurants where wine isn't a key part of their business the majority of the wines are often Gallo brands. Gallo owns André, Barefoot, Tisdale, Turning Leaf, and many, many others.

The other big players are The Wine Group (Inglenook, Almaden, Franzia, others) and Constellation Brands (Mondavi, Woodbridge, Clos du Bois, others). Next in the market are Treasury Wine Estates (Beringer, etc), Trinchero (Sutter Home, etc), and Bronco (Charles Shaw, etc).
Yes, it's Gallo
Image from thewinebuyer.com

Gallo, The Wine Group, Constellation, Treasury, Trinchero, and Bronco together own about two-thirds of the market. And there are still other big names in that last third of the pie, like Kendall-Jackson and Diageo.

The question that arises when there is a concentration of owners in an type of business is, "Is this good for the consumer?"

If you wish to support the smaller, family-owned wineries then it may take some work to find out who these are. Gallo is a family-owned winery, just not a small one, as they make tens of millions of cases of wine per year. The majority of the wineries in Sonoma County produce less than ten thousand cases and many less than one thousand.

How do you find these small family producers? They don't have the power to distribute like Gallo so usually you buy directly from the winery. It takes more work compared to just picking up a bottle at the grocery store after work, but it's usually worth the effort.

No comments:

Post a Comment