The power of Big Wine 2018

Big Wine 2018
Three out five bottles on the grocery store Great Wall of Wine could come from just three companies.

Big Wine 2018 accounts for nine out 10 of bottles made in the U.S. How can that be healthy for the long-term growth of wine?

This is the first of two parts looking at Big Wine 2018. Part I, the numbers. Part II, what that dominance means for wine drinkers.

Nothing illustrates the power of Big Wine 2018 more than the half a pallet of Meiomi pinot noir sitting on the floor in the wine department at a Central Market in Dallas. Meiomi, owned by Constellation Brands, is mass market wine, not exactly what you’d expect to see by the case at Central Market, which positions itself as Whole Foods with a Texas twist.

But there it was. And why not? Big Wine is so big, as noted in Wine Business News’ annual ranking of the U.S. largest producers, that it can make almost any retailer an offer that it can’t afford to refuse.

In 2017, Big Wine continued to dominate what we drink, according to the Wine Business numbers. The 10 biggest companies accounted for 81 percent of the wine made in the U.S. In addition:

• The three biggest producers, E&J Gallo, The Wine Group, and Constellation, kept their market share from last year – almost 60 percent. In other words, they make three out of every five bottles of U.S. wine.

• The share of the top 10 companies actually declined from 2016, from 84 percent to 81. That’s not because they’re less powerful, but because the next 20 brands took business away. The Josh Cellars label, owned by Deutsch Family, was little known a couple of years ago. Today, though, it is the 12th biggest “winery” on the list, with 2.2 million cases. Stop and consider what that means: Two years ago, hardly anyone had heard of Josh Cellars. Today, it accounts for close to one percent of all the wine made in the U.S.

• The top 50 companies on the list represent 90 percent of U.S. wine production. Given that there are almost 10,000 wineries in this country, this means the other 9,950 make only 10 percent. Is that healthy for the wine business over the long term?

• In the first Wine Business list in 2003, a winery had to produce 350,000 cases to make the top 30. This year, that threshold had doubled. So yes, the big are getting bigger; given that wine consumption is flat, how long until that starts hurting the other 9,950 wineries?

• The 10 best-selling grocery store wines in the country are owned by Big Wine; Gallo owns No. 1 Barefoot, and No. 10 Apothic. These 10 account for almost one-quarter of sales as measured by dollars. That’s depressing enough, but measuring by dollars probably under-represents their dominance. These are cheap wines, most costing less than $10 a bottle, so they could account for as much as 40 percent if measured by cases sold.

More on Big Wine:
Big Wine takes over
Big Wine growth 2016
Big Wine to become one company

4 thoughts on “The power of Big Wine 2018

  • By Wineguy999 -

    Slightly off topic, but Whole Foods is a Texas corporation as well, and predates Central Market by 15 years.

  • By Jim Lapsley -

    Hey Wine Curmudgeon

    I think the first Wine business list (at least that I could find) was in Feb. 2005. It showed that there were 4500 wineries (approximately) in the U.S. So, in the last 13 years, the number of U.S. wineries has doubled. And, my analysis is that the volume amount sold (produced + imported) by the big 3 has declined.

    The “average” bottle of wine sells for about $7 in the U.S. Given the required economies of scale in production, marketing and distribution, it seems to me that the largest 50 companies will always have about 90% of volume–but much less in value.

  • By Jim Lapsley -

    should have written “‘percent volume amount”. Actual volumes have, of course, increased.

    • By Wine Curmudgeon -

      I don’t argue with your math. The key is consolidation, particularly among the top 10 and top 20 wineries. Fewer producers make more of our wine. Talk to the Wine Business Monthly people, and that’s their biggest surprise — that the size of a top 30 winery has doubled since the first list.

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