A new study came out from a bunch of advisors and bankers saying that 51 percent of Western U.S. wineries will transition to new ownership in the next 10 years. Because of retirement, increasing competition for sales, and demand on marketing, it seems that founders are starting to turn over the reigns to larger companies that can handle the difficult business aspects of winemaking for them.
This says a lot - both about the wine industry and the state of the world. Most of the California, Oregon, and Washington wineries started after 1975 and the majority of them are still owned by the original founders. With that in mind, this transition makes sense considering their age and maturity. Older winemakers want to move away from a business owner lifestyle and pass their business on to the hands of someone with a sure-fire way of meeting the needs of the industry.
However, this also means that with the larger companies owning more and more of the smaller brands, the industry will become a lot less diverse in terms of who's charge. Who is to say that the quality standards and traditions will stay in tact once larger management is in control? Will this trend lead to the Barnes-And-Noble-ing of the wine industry?
There are many large companies that run smaller brands now and we just don't know it. Would the wine really taste any different if your neighbor's grandfather's cousin's friend wasn't calling the shots? Or, will this transition allow you guys in Virginia to buy wine at your local store from wineries that have never been able to ship to the east coast?
I guess for me, I don't want to think of those small wineries I've visited in Mendocino, where the tasting is in the old barn and the family dog sits at your feet, being run by a company who's got a banner up in their office that says "is This Good For The Company" (a la Office Space).
Bye Bye Mom and Pop Wineries
- Reply by Philip James, Feb 14, 2008.
I think this is sad (in the poetic kind of way). As you say, this really is part of the globalization of...well, everything. Its the same force that means there's no more corner stores, no hand made cheese to be found in my local store, no quaint book stores with a gnarled owner who knows the inventory by hand. But its good for currently underserved users. Big brands can distribute the product more efficiently, prices fall, people have, on average, better access to goods.
Its 'the world is flat' all over again...
- Reply by Mark Angelillo, Feb 15, 2008.
Interesting post, Annie. Perhaps if the wineries are in the hands of big business there might be more money put into lobbying for the change of some of those arcane liquor laws we all know and love. But it's not something to bet on. Small farmers are really downtrodden these days.
- Reply by winoMD87, Feb 11, 2009.
So sad, so true.
- Reply by John Andrews, Feb 11, 2009.
Hmmm ... I'm torn on this. I believe there will always be a place for the small, garage wineries. From what I have seen in Sonoma there are basically steps in size of wineries (I'm sure Dan can validate this on the Napa side). For purposes of what I'm talking about let me give some numbers:
Small winery > 5000 cases - No distribution - direct sales, wine club, local restaurants
Medium winery ~ 20,000 cases - some distribution, mostly local some national
Medium-Large winery ~ 50,000 cases - national distribution
Large winery 100,000+ cases
The consolidation of wineries seems to be happening at the mid-level size winery (medium / medium large). In a lot of cases these wineries have already gone corporate so you are not really losing the family feel.
The small wineries will continue to exist because there are newer, cheaper ways to compete and market (i.e. internet and internet sales companies like Wine Spies).
While it is sad to see wineries getting gobbled up, I think that the small guy will still survive.
- Reply by ChipDWood, Feb 12, 2009.
Re: akops41: "Will this trend lead to the Barnes-And-Noble-ing of the wine industry?"
Maybe on the west coast ;). As far as how this relates to the claim that "wine is dead" (re: "Mondo Vino") it's not hard to imagine wines becoming 'more of the same' on the west coast or in any prominent growing region that's got boatloads of money being poured into it, striving for "consistency" in brand, profile, & general appeal.
To me, the investment is just a symptom of the wine world beginning to stretch its muscles again and portends as many good things as things perceived to be "bad". New regions the world-round are benefiting from the investment in technology and wine making methods. New varietal experimentation is beginning to yield some truly unique characters in wines from regions not even on the MAP just ten years ago in the wine world.
Once we get some of these shipping oddities and stoooopidities out of the way; I think this level of investment into wineries in this Country could play a big role in the national economy in the coming decade- finally recovering from the atomic bomb that went off, known as prohibition, that stunted its growth for at LEAST fifty years.
It's potentially the best present we've ever gotten as American wine lovers, disguised in what could be considered as some butt-ugly wrapping paper.
Yo dos pesos.
- Reply by likeswine812ny, Feb 18, 2009.
great post, where is the article? perhaps my link isn't working..