Big Wine 2022

E&J Gallo may have accounted for almost one of every three bottles of U.S.-made wine sold in this country last year

Big Wine didn’t necessarily become any more dominant in the United States in 2021, but the biggest of the big grabbed a near stranglehold on the market.

That’s one of the most revealing items from Wine Business Monthly’s 18th annual wine industry survey, which tracks the ups and downs of the U.S. wine business and ranks the 50 biggest producers in this country.

It’s not news that the top 50 producers accounted for 90 percent of domestic wine sales, even though there are some 11,000 wineries in the U.S. That’s been true for years. And it’s not news that the 10 biggest sold about three-quarters of wine made in the U.S., something else that has been true for years.

What is news is that E&J Gallo, the world’s biggest wine company, got even bigger – the study estimates that it sold 100 million cases in 2021, which works out to just a little less than one out of every three bottles of U.S.-made wine sold in 2021.

Which, frankly, is staggering. By comparison, General Motors and Toyota each control a bit less than 15 percent of the U.S. car market, while Amazon and Walmart are just less than 10 percent each of U.S. retail. So one company with close to 33 percent? Almost unprecedented.

How did Gallo get to this spot? It’s well-run, certainly; the company owns best-sellers Apothic and Barefoot. It benefited from others’ misfortune, as No. 6 Treasury Wine Estates lost 4 million cases and No. 7 Bronco dropped 1 million cases from last year

Most importantly, Gallo bought a good chunk of Constellation Brand’s wine portfolio a couple of years ago in a deal that was mostly approved by U.S. regulators despite the implications that Gallo would dominate U.S. wine. Which is, of course, what happened.

Among the report’s other highlights:

• It notes wine’s continuing sales woes, quoting one analyst: “This could indicate the entry on-ramp to wine is fading. If the trend continues, the industry could be in trouble at all price points except above $25, which is where wine is popular with Boomers with money.”

• It notes that many producers seem unconcerned with wine’s sales struggles, quoting several as saying the industry’s focus is on taking market share from competitors and not necessarily selling more wine.

• Two of the most interesting Top 50 companies are Josh Cellars with 5 million cases at No. 10 and Cooper’s Hawk at No. 25 with 1 million cases. Josh Cellars didn’t show up on the list until 2015, at 1 million cases, and Cooper’s Hawk is a restaurant chain.

• In addition, says Cyril Penn, the magazine’s editor, three wineries made the list, including first-timer First Leaf, that don’t really have traditional retail outlets. They sell almost exclusively directly to the consumer.

• In this, e-commerce is not just about buying directly from a favorite winery, which is how most of us still think of it. Rather, “major wineries have focused efforts on being part of online grocery purchasing, whether through traditional grocers, like Kroger and Safeway, or online-based shopping, including Instacart baskets.” This is something that the recent SVB report also found, showing that Big Wine is using the Internet to get bigger.

More about Big Wine:
• Big Wine 2021
• Big Wine 2020
• Big Wine 2019