A while back I posted about a bunch of the wine industry acquisitions that surged earlier this year. There hasn’t been much of a slow down and after a few events and tastings the following questions keep popping up:
How is this going to effect small producers? Are they in trouble?
Wine industry consolidation by larger companies is nothing new. As the California wine business exploded in the 1990s we saw a TON of purchasing being done by large companies. Many Napa staples were purchased up and assimilated. Small wine producers suddenly got smaller. Wines that used to be hard to find became everyday productions. As an industry we responded (for better or for worse) with the cult wine movement. All of a sudden there were these micro-producers popping up in the mid to late 90s that focused on being exclusive and being hard to find. The ratings and press followed.
Today we are seeing the same trend. Brands like Orin Swift, The Prisoner, and Meomi are changing hands. Patz & Hall, Swanson, Nickle & Nickle, Duckhorn all saw investment groups come in and were purchased outright. Even on the distributor level we saw the massive combination of Southern Wine & Spirits and Glazers.
It is easy to see all of this and have the Star Wars Imperial March theme kick off in your head.
The good, nay great, news is landing right in the lap of us small producers: more and more people are going to start seeking out what they can’t find in grocery stores. For every action there is an equal and opposite reaction whether it be in physics or in business. For the wine world this top-level consolidation means that more segmentation down below is bound to happen. There is going to be (and already are) more small producers sticking to their guns to create something special that cannot be found in every retail store or restaurant.
Anecdotally, in meetings with wine buyers, distributors and other wine consumers I am already seeing more people start to seek out those small productions. Sure some of those big names will remain staples. They will never be forgotten or ignored but there is always going to be an undercurrent of craft wine producers that seek to stand out.
Let’s be honest, it is hard to build a relationship with a grocery store shelf. When you can get to know the owner, the winemaker, the vineyards and build an honest and awesome relationship with the products you buy, it makes them that much better. That is something that many large companies try to to do. Some of them do a decent job, for others it is nonexistent. For us small guys that relationship means everything
So let the consolidation happen. Let the big guys fight for shelf space and case stacks. We’ll be here doing what we do best: chewing bubble gum and making kick ass wine… and we’re all outta gum.