Gallo buys Clos du Bois, Black Box, Estancia, Mark West, Wild Horse, Franciscan, Ravenswood + 23 more!

[Mel_Knox]

Brain,
I was born with a silver snark in my mouth…I ll try to get better. Notice that John Morris has accepted my snarkiness and now is at peace with the world.

Here are some reasons some people not ITB might find this interesting:
1/Somewhere along the line people drank wines from one of these wineries that was pretty good and they wonder what will happen. I can see this especially true for Ravenswood, CDB, Estancia and Wild Horse.
2/People are interested in the sheer size of the deal and have always wondered about ‘what’s behind the door’ of the wine trade.

3/Folks like to share their bits of wisdom about just about anything.

[Mel_Knox]

By the way, when Gallo about Louis Martini the Monte Rosso vineyard came with the deal. Gallo Sonoma has made some wines from this vineyard.

[John_Morris]

Brian,

It is completely useless info to 99.99% of this board. For the wine industry it’s a big move.

You are correct you shouldn’t care.

I don’t drink these wines, but it’s interesting to me, and plainly to more than .01% of this board.

[Eric_L]

I wonder how much of the US wine market share is Gallo.

20%?

The transaction will give Gallo about 22 percent market share by volume of the US wine market, estimated Jon Moramarco, managing partner at bw166 LLC and editor and partner at Gomberg & Fredrikson.

Gallo Acquires 30 Brands, Six Wineries from Constellation Brands in $1.7...

[T_Melloni]

I am not in the wine business (although my wife has said my wine ‘collection’ looks like I run a wine store). I find this interesting. It is not about the wine, but rather the transaction. The fact that I am interested in the general genre of products these two conglomerates sell makes this interesting to me, even if I dislike their products.

The sale is relevant to my work - mergers and acquisitions, corporate transactions, etc… I like the challenge and process of trying to select out what assets are sold, how they are separated from retained assets, and how you work through the various closing adjustments and true-ups.

The corporate spin/press release is interesting. Constellation’s 8-K and press release describe the sale as a step to “focus on a more premium set of wine and spirits brands” in order to “drive accelerated growth and shareholder value.” Gallo’s emphasis is on expansion of “its portfolio across all price points to meet growing consumer demand and evolving preferences.” To me, it shows two differing visions of where the money is in the corporate wine world.

The sale will likely create greater barriers to entry for low cost, volume producers as that market continues to consolidate.

We will likely see these wines being offered to us at all kinds of events - Chamber of Commerce, Bar Association, College reunions, weddings, Charitable benefits, etc. Friends will bring them to pot-luck dinners and parties. You may end up drinking (at least tasting) many of these wines.

[DougS]

Just wondering if Gallo wrote a check? I’ve been ITB for many many moons and in my experience no one can beat Gallo when it comes to marketing.
For $1.7B - IMHO Gallo made out like a bandit.

This. Have worked with Gallo for many years, they are patient and fanatical about quality. No, they are not trying to have one of their inexpensive wines upstage a 1st growth but every Gallo wine in every category, from jug wine on will beat their competition in sensory panels. That is where the patience (and marketing) pays off.

Tom

You touched on what I was going to point out: their skills include but go way beyond marketing, into fantastic market research, product development, quality control, etc etc. They’re probably the best in the entire wine business at some of these things. I’ll be interested to see what they’re able to do with these brands.

With the couple of brands Constellation has bought for huge money over the past couple of years, and then their recent $4B+ investment in cannabis, I suspect they needed cash. Of course, I don’t know if that’s really the case. Still, I think this is probably good for both companies. I have no idea if the price is good, but I’m very confident that Gallo made a good business decision here.

22% of the market by volume is almost incomprehensible.

[BenjaminL]

The old vine Zins from Ravenswood still have major relevance, despite the shine that’s been taken off since the high volume bottlings took precedence. The rest is just the same mouthful of mouthwash swishing to the other cheek.

+1

The highlight of the Constellation ‘Friends and Family’ Sale were the 65% off single vineyard Zins the marketing team at STARZ didn’t know what to do with. I’m glad I bought what few cases I did, which I had bought more.

[John_Glas]

Who cares about any of these brands. Unless you work in this industry it impacts me 0 percent. Brian agree with you 100%. When are you coming to Minneapolis again?

JG

[Brian_Tuite]

Who cares about any of these brands. Unless you work in this industry it impacts me 0 percent. Brian agree with you 100%. When are you coming to Minneapolis again?

JG

Um, this is a wine forum. This is the largest deal in the history of the wine business. We all get that you and Brian don’t care. I’m not ITB but my Step-Son works for Gallo so every deal they make may or may not affect his livelihood. Perhaps there is a more pertinent wine thread you could visit, like “Best 80s Ballad”?

[JDavisRoby]

Nice post from Morgan Twain-Peterson on this topic on his Instagram.

As far as care, not care. I care because as a business person and a wine lover I find the business side of wine to be fascinating.

[PeterJ]

The sale will likely create greater barriers to entry for low cost, volume producers as that market continues to consolidate.

We will likely see these wines being offered to us at all kinds of events - Chamber of Commerce, Bar Association, College reunions, weddings, Charitable benefits, etc. Friends will bring them to pot-luck dinners and parties. You may end up drinking (at least tasting) many of these wines.

My interest in this comes from having relatives and friends who work or have worked for Gallo AND Constellation, as well as having owned a wine shop. I’m curious as to why you think this sale will change who brings what wines to what events. It’s always seemed to me that consumers just know the labels and don’t have much (if any) knowledge as to owns them… especially at lower price levels.

[Kris_Patten]

Just wondering if Gallo wrote a check? I’ve been ITB for many many moons and in my experience no one can beat Gallo when it comes to marketing.
For $1.7B - IMHO Gallo made out like a bandit.

This. Have worked with Gallo for many years, they are patient and fanatical about quality. No, they are not trying to have one of their inexpensive wines upstage a 1st growth but every Gallo wine in every category, from jug wine on will beat their competition in sensory panels. That is where the patience (and marketing) pays off.

Tom

You touched on what I was going to point out: their skills include but go way beyond marketing, into fantastic market research, product development, quality control, etc etc. They’re probably the best in the entire wine business at some of these things. I’ll be interested to see what they’re able to do with these brands.

With the couple of brands Constellation has bought for huge money over the past couple of years, and then their recent $4B+ investment in cannabis, I suspect they needed cash. Of course, I don’t know if that’s really the case. Still, I think this is probably good for both companies. I have no idea if the price is good, but I’m very confident that Gallo made a good business decision here.

22% of the market by volume is almost incomprehensible.

What you don’t see as a consumer is the fact that Gallo has one of the best National Off and On teams, the best CatMan team and still writes the sets in most places. Add the skills above that you mention and this is a very big deal, expect to see a lot more of these in National restaurant and Grocery chains…I never saw Pieropan in those arenas til Gallo took it over.

They are an excellent company for a reason, none of which are luck.

[David_Glasser]

I hope it’s not too disruptive for the employees.

The story is interesting to me because of the history of Ravenswood and Joel Peterson. I drank a lot of Ravenswood zins back when I was new to wine and later while waiting for my Bordeaux and Cabs to mature. They were good honest zins, they were well priced, and by damn they weren’t wimpy! Zins became a minor part of my drinking routine as my palate matured along with my Bordeaux, but I’ll always have fond memories of learning about wine from the Three Rs of Zin (Ravenswood, Ridge, and Rosenblum).

As to the wines in the portfolio, I doubt anything will change that would encourage me to start drinking them.

[John_Glas]

Um, this is a wine forum. This is the largest deal in the history of the wine business. We all get that you and Brian don’t care. I’m not ITB but my Step-Son works for Gallo so every deal they make may or may not affect his livelihood. Perhaps there is a more pertinent wine thread you could visit, like “Best 80s Ballad”?

I sure it impacts your step son but I will not buy any so it does not impact me. There are so many good producers not in this deal that are reasonably priced like Sea Slopes (Fort Ross), Kevin White, Dierberg, Boedecker, etc. All good wines under $30. In case you didn’t know the 80s Ballad is not in the wine forum.

[Kris_Patten]

Um, this is a wine forum. This is the largest deal in the history of the wine business. We all get that you and Brian don’t care. I’m not ITB but my Step-Son works for Gallo so every deal they make may or may not affect his livelihood. Perhaps there is a more pertinent wine thread you could visit, like “Best 80s Ballad”?

I sure it impacts your step son but I will not buy any so it does not impact me. There are so many good producers not in this deal that are reasonably priced like Sea Slopes (Fort Ross), Kevin White, Dierberg, Boedecker, etc. All good wines under $30. In case you didn’t know the 80s Ballad is not in the wine forum.

Very myopic view.

I’d guess your “private clients” would be thrilled to taste the 97 point Parker Louis Martini Cabernet…with the holdings they have I’d assume it is short sighted to assume they can’t make some great Ravenswood Zins or Franciscan wines. Be patient.

Congratulations.

[Brian_Tuite]

In case you didn’t know the 80s Ballad is not in the wine forum.

You’re right, and it’s so much more relevant to the topic of wine than anything to do with Gallo. What was I thinking.

Mods can you delete the Gallo thread? It has no place here at Wineberserkers. While you’re at it can you merge and stickie the 80s Ballad threads?

[John_Davis]

A Gallo - Constilation deal is a big deal in the wine world. No, they may not make the wines you drink but the ripples deals like this can send affect a lot of the wine world. As pointed out before some of these wines are wines many of us cut our teeth on when discovering wine. And we can remember and appreciate a time and the wines before we “knew it all”.

JD

[Cris_Whetstone]

It would be quite bizarre to not discuss a deal like this on a wine board.

[R_Frankel]

What you don’t see as a consumer is the fact that Gallo has one of the best National Off and On teams, the best CatMan team and still writes the sets in most places. Add the skills above that you mention and this is a very big deal, expect to see a lot more of these in National restaurant and Grocery chains…I never saw Pieropan in those arenas til Gallo took it over.

They are an excellent company for a reason, none of which are luck.

Kris - I’m not ITB. Can you explain these terms (see my bold above)? I’m curious if you and others ITB see this as a positive or negative for wine options in major restaurants/chains? Mostly what I see in restaurants is depressing, over-priced, and amazingly the same, especially within regions. I assumed this was due to list control/influence by those up the food chain (ummm liquid chain?). How does that work? Will it get better or worse?

Btw I don’t care as much about supermarket wine selections, as I almost never buy wine there.

[Jim_Brennan]

More than 30 brands will join the Gallo portfolio, including Clos du Bois, Black Box, Estancia, Mark West, Wild Horse, Franciscan, and Ravenswood.

E. & J. Gallo Winery Announces Deal With Constellation Brands

$1.7 Billion.

Included in the purchase were wine brands: Clos du Bois, Black Box, Ravenswood, Estancia, Mark West, Franciscan, Toasted Head, Hogue Cellars, Wild Horse, Blackstone, Vendange, Rex Goliath, Diseno, Hidden Crush, Taylor Country Cellars, Blufeld, Manischewitz, Wild Irish Rose, Arbor Mist, Milestone, La Terre, Taylor Dessert Paul, Masson Dessert, Capri Cribari Dessert, Primal Roots, Taylor NY Table, Paul Masson Table, Simply Naked, Cribari Table, and V.NO.

Also included in the deal were sparking wine brands Cook’s and J. Roget and Paul Masson brandy. The deal adds about 700 employees to the company, and six wine-making facilities. The included wineries are Mission Bell, Turner Road Vintners, Clos du Bois and Wild Horse in California, Hogue Cellars in Washington, and Canandaigua in New York.

Most of the newly-acquired wines are around the $11 price point. Constellation retains all of its beer brands, SVEDKA Vodka, and several other wine labels including the high-profile Robert Mondavi brand family.

The wine and spirits brands to be sold, such as Clos du Bois, Black Box and Mark West, are principally priced at $11 retail and below, and do not include its Robert Mondavi, Prisoner Wine, Kim Crawford, Ruffino, Meiomi and SVEDKA Vodka brands.

Whoa.

These brands already suck, so no loss.