Tuesday, February 22, 2005

The biggest wine company you've never heard of

Trivia time - You can probably name the first (Gallo) and second (Constellation) largest wine companies (by volume) in the US, but can you name the third largest?

Bronco Wine Company, maker of Two-Buck Chuck? no
Diageo, the largest alcohol-producing company in the world? no
Sutter Home, kings of White Zin? no
Kendall-Jackson, with dozens of brands and millions of cases of Chardonnay? no
Robert Mondavi? no, and not even before the buyout
Beringer? no
Allied-Domecq with huge brands like Clos du Bois, Buena Vista, etc? no
Korbel, a dark horse with huge sparkling volumes? no

Out of guesses?

The third largest producer in the US is The Wine Group. This is a truly "stealth" company, it doesn't even have a website! Wine Group sells over 24,000,000 cases of California wine each year with brands like:

Corbett Canyon Canyon Canyon Canyon*
Glen Ellen
Concannon
Foxhorn (Their version of Two-Buck Chuck)
Franzia (Their money machine)
Mogen David Kosher wine
Tribuno Vermouth


They also have a few imports like:
Austin Vale (Australia)
Casarsa (Italy)
Morasutti (Italy)

In 2004 they bought Golden State Vintners, a production company that they acquired mostly to have excess production capacity. They paid over $100 million for a bulk wine supplier that produced over 12 million cases each year (for other people's brands - see note below). This will continue to give them substantial access to continue to supply their products.

Once part of Coca Cola, (yes, Coke was once in the wine business - they even owned Sterling!) The Wine Grop was formed to buy out Franzia Brothers. More interesting trivia - Franzia (as in the bag in the box) is not owned by Fred Franzia of Bronco wine Company, rather his namesake brand was sold to The Wine Group at its formation.

The Wine Group has continued to use its low-end high-volume products to produce lots of cash for additional acquisitions (Concannon, Golden State and Glen Ellen most recently). Now that Gallo is starting to pick up a few brands like Bridlewood and Barefoot, look for The Wine Group to make some purchases this year. My guess is that they will stay in the sub-$10 price category and that they will pick up some of the negociant** brands for themselves.

* (One of the few truly memorable bits of wine marketing. Probably 6-7 years ago, their commercials were running on the radio and everytime they said "Canyon" it would echo.....I still remember it. Simple, effective, and unfortunately, unusual).

** (Negociant brands are brands made without a physical winery home. Golden State Vintners, for example, serviced a number of these. GSV sold the wine to them, bottled the wine, applied the labels and the Negociant company picked it up and handled the sales process. No investing in vineyards, tanks, etc. Nice, but with the oversupply ending, potentially a risky place to be in the coming months. Examples include Barefoot, Smoking Loon, Rex Goliath)

4 Comments:

Anonymous Susan said...

Can you tell me where in Michigan I can buy Tribuno Vermouth? s.yunker@comcast.net

August 29, 2006 4:26 PM  
Anonymous GENE YOUNG said...

Can you tell me where (if)I can purchase MORASUTTI MERLOT and PINOT GRIGIO? My wife and I enjoy these two wines and would like to introduce them to our friends.
Thank you.
geno284@frontiernet.net

September 19, 2007 1:32 PM  
Anonymous GENE YOUNG said...

REGARDING MY INQUIRY (MORASUTTI MERLOT and PINOT GRIGIO)I FORGOT TO TELL YOU WHEREI LIVE. I LIVE IN ROCHESTER, NY.
GENE YOUNG

September 19, 2007 1:35 PM  
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