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Consolidation in Wine

A study conducted at the University of Michigan has revealed that three companies account for more than half the wine sold A range of Gallo winesin the U.S.

 

This is sobering news, although not particularly surprising. There has been enormous consolidation within the wine business over the past five years, as dozens of family wineries have been swallowed up by multinational beverage conglomerates. In most cases these wineries were operated by people who hit retirement age without any children interested in or capable of taking over their operations, and who gladly accepted substantial payouts for their efforts.

 

The largest of the three companies is Gallo, which has over 60 separate wine labels. Next in line is The Wine Group, which owns nearly 20 wineries including Big House, Corbett Canyon, Cupcake and the ever-popular Mogen David. The “smallest” of the three firms is Constellation, comprised of dozens of wine brands along with a sizable portfolio of beer and spirits. The three biggest companies don’t even include giants such as Treasury Wine Estates, Diageo, Bronco and Kendall-Jackson---add those in, and you have two-thirds of U.S. wine sales. Quickly crunch the numbers, and you come up with seven companies controlling roughly 200 million cases of wine.

 

What’s the effect of all this? On a philosophical level, it’s the equivalent of Henry Ford’s declaration that a customer could have a Model T painted any color he wanted, as long as the color was black. In practical terms, most of us are being sentenced to a lifetime of inoffensive plonk. If your daily quaff sells for $10 to $15---which is the case for most of us these days---you’ll be hard pressed to distinguish one bottle from another.

 

The interesting thing about this situation is that we probably wouldn’t put up with it in any other area of consumer goods. The bakery industry is dominated by large companies, yet bread---even at the commercial level---has a wide range of tastes and textures. Some of the brands churned out by the beverage conglomerates (such as Fish Eye) are not even drinkable, while others (such as Clos du Bois) are barely distinguishable from soda pop, yet people keep buying them in enormous quantities.

 

Yes, there are still any number of interesting wines made in this country that sell for reasonable prices. The problem is that it takes some time, effort and research to find them. One of the best solutions is to form your own tasting group. Assemble a bunch of like-minded people, meet regularly, set a theme and a price range, and explore what’s available in the wine shops. Within six months you’ll have a much better grasp of the market, and you’ll be far less likely to be sentenced to a life without distinction.


 

Mark Spivak is the author of Iconic Spirits: An Intoxicating History, published by Lyons Press (Globe Pequot); for more information, go to iconicspirits.net.


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