For the Love of Wine

By Gary Hewitt, DipWSET, CWE, FWS, Sommelier & Mike Muirhead, Sommelier, ISG, CMS

Today’s world has more well-made wine than ever. Advances in agriculture, winemaking, transportation, and storage logistics have largely overcome historical obstacles, such as vineyard disease, fouled fermentations, and mishandled wines. The diversity of available selections from all major wine regions and from legions of producers is mind-boggling. Wine education and service training have expanding outreach that includes non-traditional markets such as Asia.

We live in a golden age of wine—but will it last? It depends.

On the positive side, winemakers have unprecedented knowledge and tools for controlling fermentation and maturation so that processes run smoothly and reliably to give clean, predictable products. In fact, surveys of consumers’ tastes are often the starting point for big-brand wines, and their wines are designed to please the average consumer palate. Such wines are clean, fruity, soft, and off-dry, and can be, but are not always, produced on a huge scale. The market is literally gobbling them up. This is great news for the typical consumer. But when we look more closely, what does this mean for wine diversity and small producers?

Big Wine

Today’s global wine industry—and the wines it offers— is incredibly diverse, but strong forces of consolidation are at work. In mid-August, E&J Gallo bought Rombauer. If you are a Chardonnay lover, you know that Rombauer is one of the most recognizable names in California Chardonnay—but aren’t E&J Gallo most popularly known for that sweet child of the 80s and 90s, White Zinfandel? In fact, Gallo is the fourth largest wine producer globally and the largest privately owned wine producer (they produce 3% of all wine globally)— but you may not know their myriad brands with a covert reach across the market. Among the over 100 brands they produce, you will find everything from value brands such as Barefoot, Apothic, and Dancing Bull to premium brands like Louis Martini, Clos du Bois, and Orin Swift.

They are not alone: brands like Veuve Clicquot, Oyster Bay, and Dom Perignon are all owned by the most powerful luxury brand in the world, Moët Hennessy Louis Vuitton. Australian heavyweights Penfolds, Lindemans, Wolf Blass, Wynn’s, and 19 Crimes—plus many others—are owned by Treasury Wine Estates. And, while most of these premium wine brands originated within a long family history of winemaking, the multinationals who acquired them can see these established names from a marketing angle rather than as continuing legacies.

Big Wine’s Top Three

When we talk about Big Wine, we are talking about companies that own and control significant swaths of the commercial wine market share. Below are the case sales of the top three in the United States in 2022.

E&J Gallo

100 million cases

3% global market share

Over 90 brands, including Alamos, Apothic, Barefoot Cellars, Copper Ridge, Dark Horse, Manischewitz

The Wine Group

50 million cases

1.5% global market share

Over 60 brands, including 7 Deadly, Big House Wine Co., Cupcake Vineyards, Franzia

Trinchero Family Estates

20 million cases

Over 50 brands, including Echo Bay, Ménage à Trois, Sutter Home, Trinchero Napa Valley

Source: Based on Wine Business Monthly, February 2023 Review of the Industry. Note that these numbers are wine sales in the US only, and do not represent global revenue or revenue from non-wine products.

The Industry

What is the effect of this type of brand consolidation on the wine industry? There are effects all the way from the vineyard to the consumer experience, including the diversity of the range of products available on the market. Acquisitions and growth mean that companies can cut costs on supplies, production, and distribution. Such cost savings afford the huge companies bigger budgets for marketing and advertising, which allow them to grab a bigger market share.

Our local market presents unique challenges. Manitoba is a highly regulated, high-tax market with a provincial

“monopoly.” The Manitoba Liquor & Lotteries (MBLL) retail operation is based on a grocery or department store model where suppliers compete for shelf placement, pay for promotional programs such as Air Miles and limited-time offers, and subsidize advertising. Currently, prospective wine selections in the MBLL are screened on the basis of how well they sell in other markets. They judge wines based on published reviews; in fact, the screening process does not even include tasting! Such a market plays to the strengths of the big players in the drinks business, reduces our selection, and challenges overall diversity in wine.