The U.S. Wine Market: an Illusion of Choice?

The Wine Producers that Control Retail Shelves

Over the past few years, it feels like the wine industry has gone through a Renaissance. If you hadn't noticed, the choice in wines at the local supermarket has just exploded with more wine labels than ever. In 2018, there was a count of over 9,600 wineries in the US. That sounds like healthy competition, right?

Maybe not...

The truth is, there is an oligopoly in the U.S. wine industry. The wine retail market is dominated by a few large producers even though the retail shelves appear to be a cornucopia of choice. A mere 30 mega-size wine producers control as much as 95% of the bottles on grocery store shelves. This is something American consumers are ignorant about and the wine industry takes advantage of.

This wine shelf at a local Harris Teeter supermarket reveals how much Big Wine controls the retail market. Big Wine brands highlighted in purple.

Do Wine conglomerates give consumers a false sense of choice?

Short answer is.. maybe. Most of the time, mega-wine producers don't just relabel bottles; there is a real difference between wines. Expensive wine has much more attention paid to it during the production process; from the climate and geography to the vessel it's packaged in. Although the mega producers have multiple labels, wineries and vineyards, they are also conscientious about wine quality at market price points. Now, with that said, many brands do change in quality after a winery acquisition.

Take Imagery for example. They're known for using grape varietals (such as Viognier and Lagrein) infrequently featured by American wineries. Before it was purchased by The Wine Group (TWG), Imagery was far from the discount market. Now, TWG has created a new Imagery label, Imagery California, with those wines priced at what's called the premium level in the wine industry, $10-15 per bottle.

The Mega-Wine Companies own the vineyards, wineries and means of production

In 2011, researchers from the University of Michigan undertook a study to ascertain the marketshare of retail wine sales. This study revealed that although there are dozens of wine types and labels on retailer shelves, the wine brands were all owned by only a few companies. Labels that had the feel of an independent or family-owned winery we’re actually owned by the same big conglomerate.

A mere eight years after this study, there are more wine brand offerings than ever, all controlled by a few mega companies.

Who are these Wine Producers?

You may not know the top wine producers who control the retail wine market, but their labels are widely celebrated. With many hours of research under my belt, the following provides insight into a few of these mega- wine producers and their brands.

Go Straight to the List

E&J Gallo

E&J Gallo is the world's largest family-owned winery, but they’re also the world’s number one wine company. They produce 3% of all wine consumed in the world. E&J Gallo has dozens of subsidiaries that include Barefoot, Turning Leaf, Dark Horse, Ecco Domani, J Vineyards & Winery, and William Hill. They also own other non-wine brands such as The Dalmore, and Whyte & MacKay Whiskey. In 2016, Forbes ranked the Gallo family as the 25th wealthiest family in the U.S., right behind the Rockefeller family, with $10.7B in assets.

Constellation Brands, Inc.

Constellation Brands is a Fortune 500 company and publicly trade on the NYSE: STZ.
This company owns not only many familiar wine labels, such as Kim Crawford and Robert Mondavi, it also owns other non-wine brands such as Funky Buddha, Ballast Point Brewing, Modelo and SVEDKA Vodka. Its Black Box wine brand was first in the "Top Growth" category for box wine in Silicon Valley Bank's State of the Wine Industry 2018 report. The company is based in Victor, New York.

The Wine Group

Based in Livermore, California, The Wine Group is the 2nd-largest U.S. wine company. It owns many of the most recognizable brands: Benziger Family Wines, Cupcake Vineyards, Glen Ellen, and Franzia. In October 2018, TWG announced they purchased the 7 Deadly brand, the top Zinfandel brand in the U.S.

Terlato Group

Located in Napa, this family-run business owns and runs vineyards and wineries such as Chimney Rock and one of my favorites, Rutherford Hill. They also run a sales distribution and marketing company called Terlato Wines International (TWI) out of Chicago. TWI exclusively represents smaller independent wineries such as David Bruce, The Federalist and Greystone Cellars.

Delicato Family Vineyards

Based in Manteca, California, Delicato ownership includes Earth Wise, Gnarly Head and Irony brands. Their Bota Box brand was the second fastest growing box wine in Silicon Valley Bank's 2018 State of the Wine Industry report.

Trinchero Family Estates

In 1947, two brothers, John and Mario Trinchero, purchased Sutter Home Winery in Napa. By 1987, Sutter Home White Zinfandel became the top selling wine in the United States. Today, Trinchero Family Estates' wine brands include Mason Cellars, Ménage à Trois, Joel Gott, and of course, Sutter Home and Trinchero. The Trinchero Family Estates is the second largest family-owned winery in the world; and the fourth largest winery in the United States. In 2015, Forbes ranked the Trinchero family as the 134th wealthiest family in the U.S. with $1.9B in assets.

Accolade Wines (owned by the Carlisle Group)

Accolade claims to be the 5th largest wine company in the world. It was once known as Hardy Wine Company, then Constellation Wines Australia, under the larger umbrella of Constellation Brands, and then later renamed "Accolade Wines". After owned by a handful of investors, Accolade was sold to the Carlisle Group in 2018.

Treasury Wine Estates Ltd.

Formerly part of Foster's Group (yes, the Australian beer company), Treasury Wine Estates Ltd. (TWE.AX) spun off onto its own in 2011 to instantly become one of the world's largest wine producers. Some its most recognizable brands include Beaulieu Vineyard (BV), 19 Crimes, Beringer, Chateau St. Jean, Stag's Leap and Sterling Vineyards. Treasury Wine Estates' former owner, Foster's Group, is now owned by Anheuser-Busch InBev.

About the Wine Producers List

It seems that many of these wine producers go to great lengths to hide winery ownership. For example, nowhere on a bottle of William Hill will you find E&J Gallo, the brand owner. Finding these wine brand owners took many hours of research and cross-referencing. What's been compiled here is probably the most complete list one could find on the Internet.

Quick factoids about the Wine Producers List...

• Over 900 wine brands are listed, owned by a mere 30 mega-corporations.
• A handful of these businesses have exclusive rights to the retail distribution of independently owned wines (such as David Bruce and The Federalist), which further extends their authority over retailers.
• Several of these companies are diversified into other industries such as spirits and beer.

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