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.