(This column appeared originally in the 2/4 issue of Dan's Papers)
Don’t Worry About Winery Consolidation
HP and Compaq have merged, AT&T recently acquired Cingular Wireless and Verizon is buying WorldCom. Mergers and acquisitions are a part of every day life in the business world. And, no matter how romantic an image it might have, wine is a business. Big business.
So, it should come as no shock that the big fish in the wine pond are gulping up smaller fish all the time, including many producers of the wines you see at your local wine shop every day.
Fairly recently, Constellation Brands, already owners of the ubiquitous Franciscan Estates, Ravenswood, Simi and Estancia brands, acquired Robert Mondavi. Similarly, Diageo Chateau & Estates Wines, which is responsible for Beaulieu and Sterling wines, gobbled up Chalone Wine Group.
But what does this all mean for you, the wine lover? That really depends.
As fewer, larger corporate wine producers start to make more of the wines we see every day, some worry about the “watering down” of these once-proud brands. They worry that quality is going to suffer as the “art” of winemaking is lost and replaced by dollar-driven efficiency and techniques.
Should we worry?
Heck no. I think this consolidation is a fact of life, and it only has positives in the wine world. Here’s why:
For the average wine drinker – someone who drinks wine regularly but doesn’t want think too much about what goes in his or her glass – consolidation is actually a good thing. Because of the vast quantities of wine and brands involved, there is increased competitive pressure on these large producers. Increased competition means better prices and better values for the consumer. Sounds like a good thing to me.
How will consolidation affect the people who do want to think about the wine they drink, the real hard-core oenophiles who drink fine wine? I don’t think we’re going to be affected much at all. Sure, Constellation runs Mondavi, Franciscan Estates, Ravenswood, Simi and Estancia – all solid, sometimes good producers – but these aren’t the wines wine geeks drink anyway. These were, for the most part, large producers even pre-Constellation, not the artisans crafting the most interesting wines Serious wine drinkers probably aren’t cellaring cases of Ravenswood’s 12-dollar Zinfandel, are they?
Wine will always be a diverse industry. For every huge conglomerate, there are hundreds of small chateaux in Bordeaux. On Long Island, we’re lucky enough to be surrounded by several producers that are committed to crafting fine, delicious wines. Sure, some are better than others, but that’s true anywhere. The best Long Island pours are interesting and take full advantage of our unique microclimate.
And, as our region matures and grows into an even more important winemaking area, we’ll reap the benefits, regardless of who buys what winery in California.
So, relax doomsayers. Consolidation is a good thing at best and a non-issue at worst. Have a glass of wine, whatever you enjoy, and think about more important, perhaps truly threatening, things.
Lenn Thomson is a contributing wine writer for Dan’s North Fork. Email him at email@example.com