Tag Archives: Constellation

Winebits 588: Constellation sells 30 wine brands, drunk shopping, drinking at home

constellationThis weeks’ news: Constellation Brands sells 30 wine and spirits labels to Gallo, plus drunk shoppers prefer Amazon and more younger people are staying home to drink

Constellation sale: The third-biggest wine company in the U.S. is washing its hands of cheap wine after selling a gaggle of less than $10 wines to No. 1 E&J Gallo last week. The brands include Black Box, Clos du Bois, Ravenswood, and Rex Goliath. Originally, Constellation asked for $3 billion and only wanted to sell some brands. But the analysts I talked to said there was so little interest in the sale from potential buyers that Constellation had to sweeten the pot and cut the price to get the deal done.

• Good old Amazon: Where do drunk shoppers go when they’re ready to spend but not remember what they did? Amazon, of course. Almost 90 percent of drunk shopping took place on the Internet retail giant last year, and shoppers spent an average of $444. Yes, that’s an impressive total, but Imagine how much more it might be if Amazon could sell wine the way it sells clothing and shoes (the top two drunk buying items).

Not in a restaurant or bar: Wine Industry Insight reports that more young consumers are staying home to drink. The reason, which will surprise no one except those in the restaurant business: “Drinking at home is cheaper.”

Winebits 356: Big Wine edition

wine news big wineBecause it’s always worth knowing what the six companies that control 60 percent of the U.S. wine business, plus their biggest competitors, are up to:

? The biggest producer you’ve never heard of: Delicato Family Vineyards makes 5 million cases of wine a year, almost all of it Great Wall of Grocery store stuff, and almost all of it in anonymity. You might have heard of some of its brands, like Bota Box and Gnarly Head, but the winery itself is perfectly happy to be little known. That’s why this two-part interview (here and here) with Delicato president and CEO Chris Indelicato, conducted by the Shanken News Service is worthwhile. Indelicato talked about wine prices and that another big harvest in California this year will mean lower margins for producers, if not lower prices for consumers; that we’ll see more cheap pinot noir that doesn’t exactly taste like pinot noir because consumers want it; and that consumers are smarter than they used to be. Which doesn’t exactly jibe with doing Bota Box pinot noir and what Indelicato calls the consumer’s demand for soft — i.e., sweet — red, but who am I to argue with a 5 million case producer?

?Big companies, big results: Each year, the Impact trade magazine names its Blue Chip Brands, which have to meet growth and profit targets. Not surprisingly (at least for those of us paying attention), one of the Big Six, Constellation Brands, and Diageo, in the top 15, account for nearly one-third of the 2014 of Blue Chip Brands for beer, spirits, and wine. Constellation’s wines included Woodbridge, Black Box, Estancia, Ruffino, Kim Crawford, and Simi, though Diageo ?s brands were all beer and spirits. I’d also mention that all but one of the Constellation wines cost $10 or less, but that would probably be preaching to the choir.

? Big and getting bigger: The news release itself is close to useless, full of jargon and terms most of us don’t understand. But the gist is what matters: That Chile’s Concha y Toro, the biggest Latin American wine producer with $950 million in sales, is growing at a rate of 18 percent a year. That makes it one of the 15 biggest wine companies in the U.S. market, with more market share here than Diageo. Again, this is a company that most wine drinkers don’t know (though they have likely heard of Fetzer, which Concha bought in 2011). In this, it’s another example of how the biggest companies continue to tighten their grip on the market.