Big Three companies dominate the wine market
If you ever feel overwhelmed while walking the aisles in your favorite wine store, here’s why:
Wine Business Monthly reports in its February edition that in 2013, the TTB approved 96,539 Certificates of Label Approval, which a winery needs prior to bottling a wine.
In 2012, that number was even higher, at 105,828.
That’s a boatload of potential new wines to crowd the shelves and daze the casual (or not so casual) wine drinker looking for something for dinner.
Some of these labels are short-timers conceived several years ago when wineries were making what WBM writer Cyril Penn termed “lifestyle brands.”
Stacks of barrels in an E&J Gallo store room hold some of the 80 million cases of wine the company produces each year.
Penn quotes Ted Baseler, president and CEO of St. Michelle Wine Estates, as saying wineries have started to pull-back from the “silly, goofy double entendre stuff.”
“It seems like there’s a return to more traditional packages and names,” Baseler said. “That’s stunning in 12 months. It’s gone from the latest catchy gimmick to more of the traditional quality, thoughtful brands.”
The same issue reveals what we already know: Large wine companies dominate the consumer market.
According to the figures in WBM, of the 7,762 wineries in the U.S., 30 companies sell nearly 90 percent of the wine produced in the U.S.
Three companies – E&J Gallo, The Wine Group and Constellation Brands – accounted for more than half (187.5 million cases) out of the 370 million cases (4.4 billion bottles, at the typical 12 bottles per case) of domestic wine produced last year.
And, the top six – add to the above three Bronco Wine Co., Trinchero Family Estates and Treasury – and you have almost 2/3 of the wine produced.
Some gleanings from the Wine Business Monthly report:
– Gallo, at No. 1 with 80 million cases, sold more than the bottom 26 wineries combined.
– I million cases ain’t so big. Precept Wine, which you might not recognize unless you’re reading the backs of bottles, made 1.1 million cases and ranked only 18th in the top 30.
– Purple Wine Co. of Graton, Cal., was the smallest of the top 30 at only 400,000 cases last year. But the company also produces another 400,000 cases of private and control label wines (wines under a certain name or label bought by a store or restaurant in large enough quantities that retailer can control the entire allotment of wine).
In comparison, in 2013 Colorado produced 140,900 cases, according to the Colorado Wine Industry Development Board.
While some industry followers have expressed concern about the iron clutch of Big Wine around the pocketbook of the American consumer, the wine industry is keyed to scale.
Which means Big Wine can make wine affordable, which leads to one more statistic – Last year, the U.S. reached 100 million wine drinkers.
Which is good for all wine, big and small.
Wine Openers 