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Who owns what? – global wine corporations

Who owns what? – global wine corporations – related article: Test Your Corporate Smarts

Larry Walker

The corporate chart of the global wine industry has changed so quickly and so profoundly over the past decade–or five years, really–that even those of us in the trade sometimes have to stop and think about who owns what. Or, whatever happened to Paul Masson or Almaden or Cribari? (Of course, you can usually find the answer in the Wines & Vines Annual Directory.)

In an effort to provide some clues to the global game of wine Monopoly, we have created a chart for the curious. You could pin it up on your bulletin board and follow the changes over the next year. There are sure to be plenty.

What Lies Ahead?

Most agree that the pace of consolidations, mergers and takeovers is not going to slow over the next few years and might, indeed, pick up, although the focus might shift to Europe and Australia. With the exception of Fosters (Beringer Blass) there is no major Australian investment in California. BRL Hardy does own Blackstone, which is a significant entry and there is the Mondavi joint venture with Rosemount.

The Southcorp-Rosemount merger has raised questions about what direction Southcorp will move. There have been a series of rumors about Southcorp’s plans to buy into California. Sometimes it was said to be Kendall-Jackson, sometimes Robert Mondavi. Southcorp is, itself, a possible takeover candidate, perhaps by one of the “Big Three” wine and spirits giants, Diageo, Allied Domecq or Pernod-Ricard, all European-based.

Europe is also a likely merger battleground, although with its wildly fragmented market, it would be difficult to buy much market share. South America also has a number of likely takeover targets and at least one company, Concha y Toro, with the clout to go on a shopping spree as well.

The Most important Moves

The breakup of the Seagram wine portfolio, with Diageo and PernodRicard getting most of the goodies, certainly has to rank as one of the major moves of the past decade. Perhaps equally important if not as immediately spectacular was the decision by Constellation (Canandaigua) to move into the premium wine market.

Canandaigua (a division of Constellation Brands) is the second largest wine company in the world and has done an effective job to this point in consolidating the premium wine business into its structure.

E. & J. Gallo’s purchase of Louis M. Martini and Mirassou wines late last year may turn out to be very significant if it signals Gallo’s intention to begin buying brands, rather than building from within as it had in the past.

The Spirits Card

Spirits companies have come into the wine business before, although traditionally with little success. The new spirits and wine conglomerates represent a very different approach than the tentative moves of the past–and a much more serious commitment.

Diageo, the world’s largest spirits and wine company, did not even exist until 1997, when it was formed by the merger of Grand Met and Guinness. Diageo now has annual sales in the range of $12 billion dollars, and a major stake in California wines.

Allied Domecq and Pernod-Ricard, the No. 2 and No. 3 spirits and wine conglomerates, have also made serious forays into wine, although at this point Pernod-Ricard has no holdings in California. Pernod-Ricard does have strong holdings in Australia, with Orlando, Jacob’s Creek and Wyndham. Jim Beam’s purchase of Geyser Peak gave it an entry into the wine business as well.

The Players

In any accounting of the major players in the global wine market, Gallo towers above the competition. Gallo’s annual production is in the range of 60 to 65 million cases. Gallo export sales of 9 to 10 million cases annually are several million cases more than all of Diageo and Allied Domecq’s California wine sales combined, more than total global sales of Rosemount and Penfolds combined. Gallo now has holdings in Italy and Australia as well.

Constellation, the No. 2 brand, is still far behind Gallo but is reportedly shopping for additional brands. The Wine Group continues to grow, having recently acquired Glen Ellen and M.G. Vallejo from Diageo. Beringer Blass (Fosters) is showing steady gains. Robert Mondavi, Trinchero Family Estates, JFJ Bronco, Fetzer (Brown-Forman), Kendall-Jackson and Golden State round out the top 10.

Keep an Eye On Kendall-Jackson: Jess Jackson seemed eager at one time to take K-J public or sell it. It’s not a good time to be going public but one of the Australian giants may very well be looking at K-J.

Robert Mondavi: Mondavi could be a takeover target (the Australians strike again) or go for a major expansion. It’s not clear that Mondavi’s various joint-ventures (Australia, Chile, Italy) have been very useful from a corporate standpoint.

Vincor: The Canadian corporation has come from zero to a major contender in a few years. Its acquisition of Hogue Cellars was a major step. The company is reportedly ready to buy more.

(We drew on several industry sources for this feature, but we would particularly like to thank Mike Fisher of Motto Kryla & Fisher, Jon Fredrikson of Gomberg, Fredrikson & Associates and Robert Nicholson of International Wine Associates for their invaluable insights and suggestions.)

Chief Wineries/Brands: Annual Case Production *

Canandaigua

Canandoigua was founded in 1945. It had sales of $863 million for its

most recent fiscal year. Total annual wines sales are about 45 million

cases.

Batavia Wine Cellars 1,800,000

Canandaigua Winery 7,000,000

(Inc. Richards, Arbor Mist,

Taylor, J. Roget)

Columbia Winery 160,000

Covey Run Winery 300,000

Dunnewood Vineyards 250,000

Franciscan Vineyards 130,000

Mission Bell winery 18,900,000

(Inc. Almanden, Cook’s, Cribari,

Inglenook, Paul Masson, Taylor

Taylor California Cellars, Le

Domaine)

Ravenswood 525,000

Ste. Chapelle Winery 130,000

Paul Thomas Winery 60,000

Turner Road Vintners 7,300,000

(Inc. Talus, Nathanson Creek,

Vendange, Heritage, La Terre)

Widmer Wine Cellars 2,500,000

Other brands of note include: Chateau La Salle, Deer Valley, Mystic

Cliffs, Vina Santa Carolina Marcus James, Alice White, Great Western,

Chase Limogere, Jacques Bonet, Wild Irish Rose and a range of fortified

wines. Case totals for these brands are included in the total case

production for Canandaigua.

Diageo

Diageo, with headquarters in London is the world’s largest spirits and

wine company, with annual sales in the range of $12 billion. Most of

that is in spirits and beer.

Bartan & Guestier 750,000

(U.S. sales ony)

Beaulieu Vineyards 400,000

BV Coastal 1,100,000

Blossom Hill 4,000,000

The Monterey Vineyard 300,000

Painted Hills 50,000

Sterling Vineyards 380,000

E. & J. Gallo

Gallo’s annual production is estimated at 65 million cases. (Number for

Thunderbird are not included in this estimate.) Of that total, an

estimatd 2 million cases is in the premium wine category. Case

production for individual brands is not revealed, except for two recent

acquisitions:

Louis M. Martini 150,000

Mirassou Vineyards 105,000

Premium Wines:

Gallo of Sonoma Estate Series, Gallo of Sonoma Single Vineyard Series,

Gallo of Sonoma County Series, Rancho Zabaco, Frei Brothers Reserve,

MacMurray Ranch, Anapamu Cellars, Marcelina Vineyards, Turning Leaf

Coastal Reserve, Indigo Hills

Mid-Priced Varietals:

Turning Leaf, Redwood Creek

Popularly Priced Wines:

Gossamer Bay, Ernest & Julio Gallo Twin Valley Vineyards, Livingston

Cellars, Carlo Rossi, Peter Vella, Wild Vines

Restaurant and Hotel Wines:

Burlwood, Copperridge, Liberty Creek, William Wycliff

Sparkling Wines:

Indigo Hills Blanc de Blancs, Tott’s, Ballatore Spumante, Andre

Imported Varietal Wines:

Ecco Domani, Bella Sera, McWilliams

Southcorp

Southcorp, the Australian wine giant, has four important global brands,

all from Australia, with total sales of 13.9 million cases. Southcorp

identifies them as their Core Premium Brands

Lindemans 6,000,000

Penfolds 2,800,000

Rosemount 5,000,000

Wynns Coonawarra Estate 100,000

Vincor

Vincor International, based in Canada, is a fast-growing company with

annual production in the range of 8 million caes, including Vincor

Quebec and its Washington and California holdings. They have recently

added the Groundrey brand from Australia.

Hawthorne Mountain 36,000

Hogue Cellars 450,000

Inniskillin Wines 130,000

Jackson-Triggs Niagara Estate 100,000

R.H. Phillips 600,000

Sumac Ridge Estate Winery 55,000

Other Canadian brands make up the bulk of Vincor production.

The Wine Group

The Wine Group is based in San Francisco. Total production for its

California wineries is estimated at 20-22 million cases. Information on

individual brand sales is unavailable, with the exception of Concannon.

Colony *

Concannon 80,000

Corbett Canyon *

Franzia *

Glen Ellen *

Lejon *

M.G. Vallejo *

Mogen David *

Summit *

Key Wineries/Brands outside the U.S.:

Argentina–Altamonte

Australia–Austin Vale

Italy–Casarsa, Morassutti

WHO OWNS WHAT?

Allied Domecq PLC

Allied Domecq PLC is based in London. Allied Domecq Wines USA is based

in California and handles sales and distribution in the U.S. for Allied

Domecq’s global wine brands. Worldwide annual production is about 24

million cases.

Atlas Peak 40,000

Callaway Coastal Vineyards 340,000

Clos dv Bois 1,600,000

William Hill 115,000

Mumm Napa 200,000

Key Wineries/Brands outside the U.S.:

Argentina–Bodegas Balbi, Graffigna

France–Perrier Jouet, Champagne Mumm

New Zealand–Brancott Vineyards, Montana Wines

Portugal–Cockburn’s Port

Spain–Marques de Arienzo, Bodegas y Bebidas, Harveys Bristol Cream

Sherry

Beringer Blass

Operating as Beringer Blass, Foster’s is an Australian brewer with huge

holdings in the wine business. Worldwide production is 17 million cases.

Beringer Vineyards 3,500,000

Carmenet, Sonoma in transition

Chateau St. Jean 300,000

Chateau Souverain 150,000

Etude Wines 9,000

Meridian Vineyards 1,250,000

Stags’ Leap Winery 60,000

St. Clement 30,000

Windsor 300,000

Key Wineries/Brands outside the U.S.:

Australia–Greg Norman Estates, Wolf Blass, Yellow Glen

Italy–Castello di Gabbiano, Travaglini

Brown-Forman

Brown-Forman is a global wine and spirits company based in Louisville,

KY. The company’s global production is estimated at between 9 and 10

million cases annually.

Fetzer 3,600,000

(Inc. Bel Arbor and Bonterra)

Jekel Vineyards 150,000

Sonoma-Cutrer 95,000

Key Wineries/Brands outside the U.S.:

Australia–Chateau Tahbilk, Geoff Merrill, Owens Estate

France–Michel Picard

Italy–Bolla, Fontana Candida

JFJ Bronco

JFJ Bronco, based in Ceres, has a number of popularly priced brands.

Annual sales are estimated at between 4 and 5 million case. Information

on individual brand sales is unavailable.

CC Vineyard *

Coastal Ridge *

Forest Glen *

Hacienda *

JFJ Winery *

Napa Ridge 300,000

Napa Creek 300,000

Rutherford Vintners 300,000

Charles Shaw *

Kendall-Jackson

Kendall-Jackson is based in California and is still family owned. Its

growth has surged with a number of popularly priced wines and from

wineries outside the U.S.

Kendall-Jackson Vineyards & Winery 4,000,000

La Crema 150,000

Cardinale Estate *

Edmeades 12,000

Key Wineries/Brands outside the U.S.:

Argentina–Tapiz

Australia–Yangarra Park

Chile–Calina

Italy–Villa Arceno

Robert Mondavi

Robert Mondavi is based in California. Most of Mondavi’s volume comes

from the Mondavi Woodbridge operation, which by itself adds considerable

distribution clout.

Arrowood 30,000

Byron Vineyards & Winery 28,200

Robert Mondavi Napa 268,000

Robert Mondavi Private Selection 1,400,000

Opus One 30,000

Woodbridge 7,100,000

Key Wineries/Brands outside the U.S.:

Chile–Caliterra

Italy–Luce, Danzante

RELATED ARTICLE: Test Your Corporate Smarts

The following quiz is a test of your knowledge of the corporate global wine industry. Answers are at the end of the quiz. No peeking! if you score 10, change your initials to C.E.O. A score of nine gives you a title on the door. Eight points keeps you in contention. A score of seven will send you directly to Paraguay to oversee vineyard development. Below seven? Turn in your suit and tie as you leave.

1. Blueberry Hill is: a) A budget wine produced by Diageo with good sales in the UK market; b) A rock and roll classic by Fats Domino; c) A malternative being tested by Gallo; d) An AVA proposed by Kendall-Jackson.

2. After the breakup of Seagram’s, its Chateau & Estates division was gobbled up by: a) Walt Disney, Inc.; b) Chalone Wine Group; c) Diageo; d) Jim Beam Brands.

3. Turner Road is: a) The name of the highway leading to Ted Turner’s Montana ranch headquarters; b) A wine-producing facility in Lodi sold by Sebastiani to Canandaigua; c) An album by the Beatles; d) A joint-venture winery in Ontario by Vincor and Pernod-Ricard.

4. Australia owes much of its global success to careful planning. The blueprint for their national and international development was drawn up in the 1 990s. it is called: a) World Brand Australia; b) G’Day, Mate; c) The 2020 Plan; d) Operation Waltzing Maltida.

5. Rock goddess Janis Joplin was known to have a drink now and again. Her favorite tipple was: a) Canandaigua’s Wild Irish Rose; b) Lindeman’s Bin 65 Chardonnoy; c) Gallo Hearty Burgundy; d) Brown-Forman’s Southern Comfort.

6. Paul Masson, now owned by Canadaigua, was well known for a series of advertisements promising to “sell no wine before its time.” Who was the actor who made that line famous? a) Marlon Brando; b) Ronald Reagan; c) Orson Wells; d) Fred Astaire.

7. Diageo has had a huge success with its Captain Morgan Spiced Rum. There are rumors that they have a spiced wine in development designed to eliminate the surplus of Chardonnay. The product is called: a) Sergeant Pepper; b) General Ginger Rogers; c) Private Paprika; d) The rumor is unfounded.

8. In corporate speak, there is something called a “bolt on.” What is it? a) A sale of stock following an initial offering that is therefore “bolted on” to the first offering; b) A successful brand or operation that can be bought and “bolted on” to the corporate structure to immediately produce a profit; c) Names and titles mounted on brass plaques that can be quickly “bolted on” to corporate office doors in case of rapid executive turnover; d) There is no such phrase in corporate speak.

9. Allied Domecq owns a fast food chain called: a) In-and-Out Burger; b) Dunkin’ Donuts; c) Burger King; d) Baskin-Robbins.

10. Jon Moramarco is: a) shortstop for the Cleveland Indians; b) president and CEO of Canandaigua; c) global wine director for Foster’s; d) none of the above.

Answers: 1-b; 2-c; 3-b; 4-c; 5-c; 6-c; 7-d; 8-b; 9-b and d; 10-b.

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