Large and Small, the Two Wine Industries

Looking at the differences in large vs. small wineries we'll focus on what's typical for each. Large ones are usually owned by corporations or at least have corporate-like structures. Small are family owned and operated. They are different in many ways.

 

 

Less than one percent of American wineries make 500,000 cases of wine a year or more. These are the wineries you always hear about in the news. These are familiar names like Gallo and Kendall Jackson plus less familiar corporations that own many wineries such as Constellation Brands, Treasury Wine Estates, and The Wine Group.

The vast majority of wineries make less than 10,000 cases and are family owned.

When statistics are published on the health of the wine business they are often broken down by the size of the wineries as you can find one size doing really well while others are not. That is what's happening now as the under 5,000 case high-end wineries are showing increases in sales and wine club signups, but in the news you see the focus on the big ones that have their own PR people. Not all small operations are doing well. There are plenty where the foot traffic has dried up.

 

One of Gallo's wineries/production centers
This one is in Fresno

Large Wineries

Gallo and Kendall Jackson call themselves family wineries, but will be staffed like and act like a corporation. Corporations are about quarterly results and aren't against closing sites, changing management, or laying people off in any downturn.

They funnel most of their wine through the retail sales channel. Getting retail shelf space, and getting the best shelf space at eye level, is key to selling retail. The large guys are good at muscling out the small ones. It can be the same with restaurant wine lists. There's a local mid-range Italian restaurant near me, in Sonoma County, where the wine list was handled by their Gallo rep. The restaurant didn't have the knowledge or the time to put it together themselves.

 

The aptly named Little Vineyards in Sonoma Valley
Run by Rich and Joan Little
Producing a couple thousand cases of wine a year

 

Small Wineries

Small wineries are owned and operated by the family, often with extra staff hired to perform various functions. Those could be working the tasting room or doing the accounting. Some will hire outside companies to take care of things like finance, IT, and landscaping. The tiny ones are often part of a co-op sharing expensive equipment with other winemakers. Some of these winemakers are part-time and still have their "real" job. For others this is their livelihood.

The family might farm grapes on their property, make the wine, and sell the wine direct-to-consumer if you stop in to taste and purchase or through their online website. They may outsource the compliance part of shipping wine as the many different and changing state alcohol shipping regulations are nearly impossible to keep up with. 

The small ones likely don't sell much through the wholesaler channel to retailers as that eats too deeply into their operating profit. They have to sell direct to stay in business. If you are a fan of some small winery, consider buying a case of wine if it fits in your budget. You'd be doing them a favor and you get twelve bottles of wine!