Big Consolidations Are Happening

As the predicted a couple of weeks ago, the wine industry is consolidating. The article estimated that over $1 billion worth of mergers and acquisitions would happen in the next couple of years. Well it happened in less than two weeks when two giants joined.

SF Gate reports in the article, New global wine giant even bigger than Gallo , that Constellation's acquisition of Australian's BRL Hardy will make it world's largest wine company. The merged company's wine revenue of $1.7 billion will eclipse Gallo's $1.4 billion. Their goal is to become the world. A couple years ago, when people had more discretionary income, Constellation acquired premier brands like Ravenswood, Simi, Franciscan Estates. Now, their business strategy appears to be globalization.

This merger reinforces how quickly the New World wines are gaining market share. As the article reports, "The new Constellation aspires to be a global powerhouse in "New World wines" from the United States, Australia, New Zealand, Chile and South Africa. A key strategy is to market more Australian wines in the United States, particularly in the $7-to-$12 price range, officials said Friday.

Their goal is clear. "There isn't a Coca-Cola or a Microsoft or a Nestle in our industry " said BRL Hardy managing director Steve Millar. "We certainly intend to be that. "

Well hopefully there's room for us small guys. To put things in perspective, I make 0.00018% of what the new Constellation or Gallo makes.

Their world wide distribution can expose people to all sorts of new and exciting wines. I just hope it doesn't homogenize the world of wine. Even though Bonny Doon makes 300,000 cases per year, they have fun with their eccentric wine labels or the unusual wine club DEWN. I'm happy making miniscule batches of wine, telling the story behind each one, and taking things farther.