Concentration in the US Wine Industry

by Jeff Miller of Artisan Family of Wines (Seven Artisans, Sly Dog Cellars, Red Côte)

jeff-smI would highly recommend reading this article, “Concentration in the U.S. Wine Industry”, that can be found at

Just a few of the interesting tidbits of information contained in the article:  Bronco Wine Company, maker of Two Buck Chuck, has 3.5% of the US market.  I’ve always thought of Bronco of being a pretty large wine company, and I guess it is.  But it’s puny compared with Gallo, which has the largest single share of the wine market at 22.8%.  Think of it—almost a quarter of the wine sold in America is sold by Gallo.  That’s mind-boggling.

The Wine Group isn’t that terribly far behind at 15.9% of the market, followed by Constellation at 12.8%.  Such large companies as Trinchero and Treasury are less than 5% each.

The interesting thing about these companies is that they each have a stable of brands that, on the surface, doesn’t betray their ownership.  Turning Leaf is a Gallo brand, for instance, Corbett Canyon a Wine Group brand.  So it’s very easy for a consumer to pick up bottle of wine at his local store and not have a clue he’s really buying a Gallo product.  That bottle of wine doesn’t come from some relatively small winery at all.  In fact, the name on the label isn’t even a winery, it’s just a name that Gallo or one of the other megawineries has fashioned as a vehicle for their millions of gallons of wine.  As the authors note: “Although choices remain abundant, particularly for those with access to non-chain retailers, it is increasingly difficult for consumers to recognize which companies they are supporting with their purchases.

When it comes of variety, there’s nothing like that—you pretty much know what variety you’re getting.  But once again, there’s a great deal of concentration when it comes to variety.  Chardonnay, Cabernet Sauvignon, and Merlot are the biggest sellers.  Zinfandel, which seems like a pretty common variety, is far down the list.  So Americans seem to like a few varieties of wine, and by and large ignore the rest.

But for most other consumer products, the degree of concentration is much greater.  As dominated as the wine business is by a few large firms, it’s even worse in the beer and soft drink businesses.  So, as hard as it is it start up a small winery and find distribution, microbreweries and small soda manufacturers have an even tougher time of it.

I find this all a bit depressing.  What may, at first glance, look like a wide range of choice, is really pseudo-choice.  Basically the same product by the same producer is peddled under a variety of brands, creating the illusion that there’s a plethora of different products, when that’s simply not the case.  And the illusion is even worse when someone who thinks he’s buying a wine from a small producer is really buying a Gallo or Wine Group product.  It’s as if Budweiser produced its beer but bottled it under any number of names to hide the fact that it was just Bud.  I’m not sure if that would be tolerated in the beer marketplace, but it certainly is when it comes to wine.

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2 Responses to “Concentration in the US Wine Industry”

  1. Jonny says:

    I think you may be a little offf on your comment about “the same product by the same producer “. The big producers target brands to different demographics and taste profiles so I would harldly call them the same product.

    The study is also highly focussed on grocery store chains with limited liquor store data. Lets also be honest, chain stores need to source from a limited set of suppliers, and the big boys can produce this. (just like Ben and Jery’s or Hagin Daz)

    If I’m buying wine for a wedding or party, I buy in bulk at the chains. If I want a bottle to share with my wife or Father, I’ll spend the time to go to a wine shop or the winery itself.

  2. Wine Mover says:

    While disappointing, wine consolidation has not only been happening for a long time, but should, if anything, accelerate. There are over 7,000 wineries in the USA, with the top 30 controlling 95+% of the volume. Instead of being depressed, one should accept the reality and look for more consolidation. Other industries have experienced the same–why shouldn’t the wine business?

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