The World's Biggest Wine Company Expands

Vino101

Constellation Brands executives must be elated to finally complete their sale of over 32 wine brands and five wineries to E. J. Gallo Winery. The $810 million deal was less than half of the $1.7 billion initially proposed in April of 2019, as the Federal Trade Commission insisted Constellations exclude their sparkling wine, brandy, dessert wine and concentrate business lines as a condition of approval. Constellation sheds all their $11 and under products in a bid to go upscale and Gallo picks up a bevy of bottom shelf labels and more production capacity.

Who comes out on top in this deal? For now primarily the grape growers who no longer have to deal with the uncertainty of who will be buying their grapes. As the details of the mega-deal were being worked out many farmers have been in limbo. What will this deal mean for wine lovers? It’s certainly promising on this front as E. J. Gallo has a history of improving the wine operations they acquire. Look no further than the wonderful work they’ve done at Louis M. Martini, Pahlmeyer Winery, J Vineyards and Winery and MacMurray Estate Vineyards. Once Gallo integrates the newly acquired brands into their operations the consumer will likely benefit as Gallo is so much better at running a wine business than Constellation. Better quality wine at the $11 and under price point is a win for the consumer. Having not had any of the following brands for years as they have become so banal I’m looking forward to the prospect of Gallo reviving and improving the quality of the future offerings at Ravenswood, Blackstone and Clos du Bois.

E. J. Gallo is a private company that now represents almost 30% of all bottles of wine produced in the U.S. Not bad for a couple of brothers that switched from growing grapes to squishing them to make wine in 1933. One could easily make the argument that Gallo is too big and controls too much of the U.S. market. After all it took almost two years for them to get approval from federal regulators. That a lot of sifting through the fine print to ensure consumers don’t get hosed on the deal. Based on current market conditions I’d speculate that we can expect more consolidation in the coming years in the wine industry. A post pandemic euphoria will undoubtedly lift revenues for travel, hospitality, retailers and restaurants, but the relief may not come quickly enough for some winemakers. Gallo will almost certainly be a player in future acquisitions.

Kwame Onwuachi and Alice Waters pen a nice piece for The Washington Post theorizing that once president elect Joe Biden is sworn in he can take immediate steps to save mom and pop American restauranteurs by taking executive action. Oh if it were that easy.

Bill and I discuss these items and more in this week's addition of VinoWeek. Thanks to everyone for listening. Cheers!

Our wine recommendations this week are Bellavista Alma Gran Cuvée Franciacorta. The region of Franciacorta is roughly 50 miles east of Milano in northern Italy.A blend of 77% Chardonnay, 22% Pinot Nero and 1% Pinot Bianco. Bright and zesty apple and lemon flavors on a full bodied frame. A real crowd pleaser. You can wow your friends with this one as they remark “Hey this is great Champagne”. Then you can gently remind them, it’s not Champagne it’s Franciacorta. $23 Buy it here.

Domaine Allimant-Laugner Crémant D’Alsace Brut Rosé - 100% Pinot Noir this sparkling wine has a beautiful light salmon color. Clean and crisp red fruits on the nose. Strawberries and cranberries with good depth of flavor on the palate. $16 Buy it here.

Marcel Cabelier Cremant Du Jura - This wine hails from Jura France a region sandwiched between the Burgundy wine region and the Swiss border. It’s 90% Chardonnay, the remainder Pinot Noir and Poulsard. A light straw yellow color in the glass, the green apple and biscuit aromas and flavors could easily fool you into thinking it’s Champagne. This is our new house bubbly. Why spend all your money on a luxury Champagne brand when you can get this level of quality and complexity for a third of the cost? $20 Buy it here.

2018 La Bastide Saint Dominique Cotes du Rhone Villages - 50% Grenache, 20% Syrah and 15% Mourvèdre 15% Carignan. Fermented and aged in stainless steel the nose is quite shy on first impression. Decant it and leave it alone for an hour and you will be welcomed to a wonderful black and blue fruit nose. It’s full bodied with a good punch and spiciness on the palate. A nice mid length savory finish. La Bastide wines age extremely well so you can lose a few of these in storage and not have to worry. $17 Buy it here.

2018 Crous St. Martin Les Espaliers Gigondas - 80% Grenache, 10% Syrah, 10% Mourvèdre. This relatively new label is a collaboration between wine agent Harry Bosmans and wine grower Eric Bonnet of Domaine Bastide Saint Dominique. A deep ruby color in the glass the nose shows deep red fruit and spice. On the palate it’s refreshing, savory and beautifully balanced. A wonderful new discovery. $25 Buy it here.

2017 Juan Gil Monastrell Silver Label - Crafted from 100% Monastrell from the region of Jumilla in southeastern Spain. The 40 year old Monastrell vines are dry farmed on limestone soils. The wine is aged for 12 months in French oak barrels. Deep black and purple in the glass, aromas of blackberries, blueberries, black cherries, licorice and sweet oak accompany a mineral rich and concentrated palate. It’s full bodied with just enough acidity to ward off a slightly sweet sensation on the finish. Ages ago I consumed a lot of this wine and it’s exactly as I remembered it. I’m glad I ‘ve rediscovered it again. $15 Buy it here.

2015 Blue Gray Priorat - 50% Garnacha, 30% Mazuelo (Carignane), 25% Cabernet Sauvignon. Another Label from the Gil Family Estates this wine is packed with juicy black fruit and savory spice. It’s rich and concentrated but not jammy. Very approachable, its balance and well integrated tannins have made it our house red. $18 Buy it here.