On this week’s show, we thought it would be interesting to show you where some of your favorite wines are coming from. In reality, a small group of companies is responsible for producing the bulk of the wine we drink. The first company we would like to profile is The Wine Group.
Please note this is the first part of a four-part blog series. Here’s the scoop:
The Wine Group
The third largest producer in the US is The Wine Group. This is a truly “stealth” company, it doesn’t even have a website! Wine Group sells over 24,000,000 cases of California wine each year with brands like:
Foxhorn (Their version of Two-Buck Chuck)
Franzia (Their money machine)
Mogen David Kosher wine
They also have a few imports like:
Austin Vale (Australia)
In 2004 they bought Golden State Vintners, a production company that they acquired mostly to have excess production capacity. They paid over $100 million for a bulk wine supplier that produced over 12 million cases each year (for other people’s brands – see note below). This will continue to give them substantial access to continue to supply their products.
Once part of Coca Cola, (yes, Coke was once in the wine business – they even owned Sterling!) The Wine Group was formed to buy out Franzia Brothers. More interesting trivia – Franzia (as in the bag in the box) is not owned by Fred Franzia of Bronco wine Company, rather his namesake brand was sold to The Wine Group at its formation.
The Wine Group has continued to use its low-end high-volume products to produce lots of cash for additional acquisitions (Concannon, Golden State and Glen Ellen most recently). Now that Gallo is starting to pick up a few brands like Bridlewood and Barefoot, look for The Wine Group to make some purchases this year. My guess is that they will stay in the sub-$10 price category and that they will pick up some of the negociant** brands for themselves.
** (Negociant brands are brands made without a physical winery home. Golden State Vintners, for example, serviced a number of these. GSV sold the wine to them, bottled the wine, applied the labels and the Negociant company picked it up and handled the sales process. No investing in vineyards, tanks, etc. Nice, but with the oversupply ending, potentially a risky place to be in the coming months. Examples include Barefoot, Smoking Loon, Rex Goliath)
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