A merger involving the largest and fourth largest wine and spirits distributors in America could make things easier for big wine companies but even tougher for small wineries and those trying to break into the market.
The Federal Trade Commission last week announced that it had no objections to the merger.
According to Shanken Communications, Southern Wine & Spirits, the industry’s largest distributor with $11.8 billion in sales last year, and Glazer’s Inc. with $3.7 billion, according to Impact Newsletter, merged this week to create a wholesale network serving 41 U.S. states plus Washington, D.C., Canada and the Caribbean.
The combined annual sales was $15.5 billion, and the combination also just signed a deal with Bacardi that will bring in $1 billion more.
The new company, Southern Glazer’s Wine & Spirits LLC, will have 20,000 employees, including 12,000 sales representatives, and will sell more than 150 million cases of wine and spirits annually, and serve more than 350,000 retailers and restaurants.
Southern Glazer’s will have nearly a 30 percent share of the $52 billion U.S. spirits and wine market in dollar terms. It and the other three largest distributors, Wirtz/Charmer (which also recently merged), Republic and Young’s Market (the leader in California), will have more than 60 percent of the total market.
This could impact smaller wineries as distributors focus on their bigger accounts, leading many companies to try to increase direct sales to consumers. Others may turn to specialty distributors, brokers and marketing firms.
Still others will try direct sales to the trade where it’s allowed. That’s legal in California, but few other states.
Top winery and vineyard deals in 2015
I mentioned last year’s 10 biggest wine stories in the last Business End column Jan. 1, but it was also a busy year for winery and vineyard deals in Napa Valley. Here are some (the first two were also among the biggest overall wine stories):
Liquor and Guinness beer giant Diageo sold most of its wine brands to Treasury, the Australian-based owner of Beringer, Stags’ Leap Winery, Etude, Chateau St. Clement and other wineries, for $552 million. The deal didn’t include vineyards or wineries, as it had already sold them in a lease-back deal, letting Treasury acquire the Beaulieu, Sterling, Acacia, Provenance and other brands at a bargain price.
E&J Gallo Winery bought The Ranch Winery large custom-crush facility near St. Helena.
Gallo also bought 258 acres of Pope Valley vineyards from Flora Spring in May.
The Schmidheiny family, which owns Cuvaison Estate Wines, moved its winemaking to its Carneros winery and sold its property in Calistoga to St. Helena-based Criswell-Radovan. The new owners renamed the property Fairwinds Estate Winery.
Livermore Valley’s Auburn James Winery bought 100,000-case Hill Wine Co. winery at 1001 Silverado Trail for $11.2 million. Owner Jeff Hill had filed for bankruptcy. This is unrelated to Doug Hill’s reputable Hill Family Estate.
Joseph Wagner’s Copper Cane Wines sold the Meiomi brand to Constellation Brands for $315 million. Wagner is the son of Chuck Wagner, owner of Caymus Vineyards.
Chanel entered the U.S. wine business by buying Rutherford’s St. Supéry Estate Vineyards & Winery from the French Skalli family. It already owns vineyards in France.
Heitz Cellars bought Triere Estate vineyard from Burgess Cellars.
Duckhorn Vineyards sold its Howell Mountain Candlestick Vineyard to Robert Craig Winery.
GI Partners sold two properties owned by California Public Employees’ Retirement System (CalPERS) and once managed by Pacific Vineyard Partners. It sold Sugarloaf East Vineyard to Silverado Investment Management Co., and Circle S Vineyard to a private party.
Yao Family Wines bought the Bello Family Vineyards tasting room at 929 Main St. in St. Helena.
Rudy von Strasser, who sold his winery and property on Diamond Mountain and bought small Lava Vine Winery at 965 Silverado Trail in Calistoga.
Other unverified sales are the Garvey family (Flora Springs) and Araujo (now part of LaTour of Bordeaux) each buying part of Red Hen Vineyards, Trinchero buying a chardonnay vineyard on Salvador Road and Treasury/Beringer selling the 20-acre Abbotts Vineyard in Carneros to Caymus (they say it’s in escrow but won’t confirm the buyer yet).
Unified Wine & Grape Symposium
The Unified Wine & Grape Symposium will be held Jan. 26-28 at the Sacramento Convention Center.
Along with the largest exhibit of grapegrowing and winemaking equipment, products and services in North America, it will include an extensive educational program. Sure to be top draws are the keynote luncheon with Fred Franzia, the man behind Two-Buck Chuck and the Bronco Wine Co., and the state-of-the-industry session.
It’s a must event for business and technical managers in the wine business.
Get information and register at UnifiedSymposium.org.