The wine industry is experiencing tremendous merger and acquisition activity. The amount the “giants” of the industry like Constellation Brands, Gallo and others are spending right now to acquire wine assets is truly staggering. Interestingly much of what is being spent on wine assets is on brands more so than wineries and vineyards. This is an important distinction as the industry hurtles forward. What does it mean for consumers?
To be honest, we would prefer the money chase brands versus the small, cool wineries and producers that we are so fond of consuming. Large marketing driven wine companies continue to invent new brands, and branded products. For areas where they can’t invent and build, they buy. Frankly though, many of those they are starting up right now are too much focused on the brand and too little focused on the wine.
Early in this cycle, brands like The Prisoner and the line of wines including Butter, Jam and Toast, were brilliant concepts with great consumer packaging, well made wine (albeit in a style that would not be one of our favorites), well positioned in the marketplace both in pricing and markets. They made sense and have enjoyed success that attracted attention. Perhaps too much attention.
The knockoffs are now showing up, the brand marketing commands attention, and like lemmings over the cliff, M&A dollars are chasing them. This is where the cycle has become frustrating as the wine no longer matters — it has become all about the brand. The names now are a little too precious, the wine is way too uninteresting and the prices are, in short, unreasonable for what resides in the bottle. Since the folks at JAM Cellars, the aforementioned makers of Butter Chardonnay, nailed down that brilliant, consumer friendly name and wine, we now are forced to endure Butternut, Buttercup, Butter-kissed, Butter-this and Butter-that. All equally silly names and “why bother” wines.
The good news in all this, is that as long as all the energy is focused on them from a merger and acquisition perspective, the large acquiring organizations are ignoring “real” wineries. While these mega-brands and mega-wine companies have a place in serving the masses, we have always preferred to carry the wines produced by the most talented winemakers — folks we know and have personal relationships with, and where we can know what goes into each of their bottles. The strategy for our close friends like this is different and the wines are genuine in their quality.
Independent winemakers who are producing quality wine still pay attention to marketing. They would be foolish to ignore all of those factors. They also focus their energy on having really delicious wines for the appropriate price. Labels, the gauge of the glass, the quality of closure whether it is cork or Stelvin and even the foil that covers the cork are all carefully evaluated to see how they fit into the overall message they are trying to convey. This is the big difference for consumers. When too much time and capital is spent on the package rather than what it contains, the purpose is lost and the quality of the real product (which is the wine and not the brand or package) is diminished. As wine professionals we will pass — and would encourage consumers to do the same.
As consumers, the brands are hard to miss versus wine from real wineries. Just look for the all too cute packaging and silly names, or as always, check with your favorite wine professional. They will point you in the right direction.
If there is a topic you would like to read about or questions on wine you can email George@thedinnerpartyshop.com or make suggestions by contacting the Healthy Community section at the Coeur d’Alene Press.
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George Balling is co-owner with his wife, Mary Lancaster, of the dinner party — a wine and gift shop in Coeur d’Alene by Costco. The dinner party has won the award for best wine shop in North Idaho twice, including for 2018. George is also published in several other publications around the country. After working in wineries in California and judging many wine competitions, he moved to Coeur d’Alene with Mary more than 10 years ago to open the shop. You can also follow us on Facebook at http://www.facebook.com/#!/dinnerpartyshop.