Tag Archives: Riunite

Big Wine is dumping cheap wine brands – first Ruinite and Constellation; is a Yellow Tail sale next?

yellow tail sale

Will the roo have to find a new job if there is a Yellow Tail sale?

What does a Yellow Tail sale say about the future of cheap wine in the U.S.?

This year’s unprecedented cheap wine sell-off might include an even bigger shocker — a Yellow Tail sale. The $7 Australian supermarket wine is the biggest imported wine in the U.S., but the company acknowledged last week that it had been approached by several prospective buyers. This came after an Aussie financial newspaper reported that the Casellas, the family that owns Yellow Tail, had hired an investment bank to help them sort through the offers.

The Yellow Tail sale news comes on the heels of Banfi ending its 52-year partnership in March with Riunite, the $5 Italian sweet red, plus the Constellation Brands fire sale in April. That’s when it sent most of its $10 wines to E&J Gallo.

Know that almost all of the wine brands in these deals are profitable, and some immensely so. In fact, Yellow Tail is the fifth best-selling brand in the U.S., while Banfi’s marketing agreement with Ruinite helped it sell 2 million cases a year. And Constellation was so eager to rid itself of its cheap wines that it sold them at a tremendous discount and included Black Box, the sixth best seller in the U.S.

Does any of this make any sense? Not really, if this was 1999. But it’s 2019, and the wine business is obsessed with premiumization, and that trumps all. There was an odd and meandering story on wine-searcher.com last week, which asked if popular wine brands could be successful. This seemed, at first glance, like asking if rain was wet. How could something like the 20-million case Barefoot not be successful?

Because, said the article, size doesn’t matter. And, given the perspective of premiumization, that makes perfect financial sense. Whether it’s good business is a post for another day.

Hence, it’s not enough to sell millions of cases of wine anymore, like Yellow Tail, Ruinite, and Black Box. In this, Yellow Tail seems to be a private equity takeover target, just like any other business with cash flow and a well-known brand. The new owners would buy the company with cheap borrowed company, cut costs, strip Yellow Tail of its least profitable assets, goose up the bottom line, and then re-sell it.

Banfi’s CEO admitted it was too difficult to sell cheap wine given premiumization, and that the company would focus on its “premium and luxury offerings.”  In other words, wine for the one percent. What a terrifying thought for those of us love wine and who are part of the 99 percent.

Winebits 239: Sweet red wine, grape shortage, wine blogging

? Riunite goes sweet: Because, as it was once explained to me, the flagship Ruinite Lambrusco, the pure and natural wine, can ?t be called sweet, only soft. Hence two new wines from Banfi, which makes Riunite — Sweet Red and Sweet White for $6 a bottle, reports Shanken News Daily. The target audience is women 25 and older, and Banfi is spending $2 million for a digital ad campaign to promote the new wines. Which, for those who wonder if there really is anything to this sweet red thing, this probably means yes. One has to try to spend $2 million digitally, and Banfi is well known as a good marketer.

? Whither the grape shortageRob McMillan at Silicon Valley Bank, perhaps the leading U.S. wine business analyst, was one of the first to sound the alarm about an impending California grape shortage. He even left a comment on the blog. Now, McMillan isn ?t so sure. He writes: ?The distinct possibility that the supply that we said was ?trending to shortage ? early this year, might just be equalized for another season. ? He cites good weather that could turn into a possible record crop in California, as well as cheaper imported wine that is holding down the price of bulk wine. And, because he has a sense of humor, McMillan also offers wine business investing advice. He tells the story of one wise guy who is buying California grape land figuring to make a killing from the grape shortage that may not be a shortage.

? Win blogging award finalists: And, once again, the Wine Curmudgeon is not among them. But that's OK. The Italian Wine Guy, in one of his other blogging voices, explained that I'm not a wine writer, but someone who writes about wine, which is a significant difference in this business. And you know what? I'd rather be someone who writes about wine. That said, I'm rooting for Randal Grahm, Blake Gray, and the Italian Wine Guy in their respective categories.

Riunite on ice — so nice

The Wine Curmudgeon’s recent foray into sweet red wine brought Riunite to mind, which those of us of a certain age will remember (how fondly depends, of course, on how much Riunite one drank in those days). Riunite was one of the first sweet reds, but even then, it wasn’t polite to call the wine sweet — it was “soft.”

YouTube has a surprising number of vintage Riunite commercials, as well as a bunch that re-do the brand for more modern sensibilities (part of a program called Riunite Reinvented that the producer held several years ago). The older commercials, most from the early 1980s, sport a bouncy, Gloria Gaynor beat; some incredible late 1970s clothing styles; and the infamous jingle, which worms its way into your head like a computer virus.

I chose this commercial (courtesy of DrMagic) mostly because it was a bit different — wine and food pairings were not exactly common back then. Wine with tacos? But if you want to see any of the others, in all their well-scrubbed, hard-smiling model glory, do a YouTube search for “Riunite commercial.” Because it is so nice.