E&J Gallo winery in Modesto CA purchases Constellation wine brands


The main entrance to the new Dry Creek office building at the E&J Gallo Winery in Modesto, Calif. On Tuesday, August 30, 2016.

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E. & J. Gallo Winery has 34 new wine and spirits brands to its credit after reaching a $ 1.7 billion deal to buy properties from rival Constellation Brands.

The Modesto-based company has struck a deal with Constellation, known for producing beers like Corona, Modelo and Pacifico, to acquire several well-known wine brands including Northern California labels Clos du Bois, Black Box and Ravenswood, in addition to making sparkling wine. and spirits.

The purchase included wine brands: Clos du Bois, Black Box, Ravenswood, Estancia, Mark West, Franciscan, Toasted Head, Hogue Cellars, Wild Horse, Blackstone, Vendange, Rex Goliath, Diseno, Hidden Crush, Taylor Country Cellars, Blufeld, Manischewitz, Wild Irish Rose, Arbor Mist, Milestone, La Terre, Taylor Dessert, Paul Masson Dessert, Capri, Cribari Dessert, Primal Roots, Taylor NY Table, Paul Masson Table, Simply Naked, Cribari Table and V.NO.

The deal also included Cook’s and J. Roget sparkling wine brands and Paul Masson brandy. The deal adds approximately 700 employees to Gallo’s existing 6,500 worldwide and six winemaking facilities. These are Mission Bell in Madera, Turner Road Vintners in Lodi, Clos du Bois in Geyserville and Wild Horse in Templeton, as well as Hogue Cellars in Washington State and Canandaigua in New York.

Most newly acquired wines are around the $ 11 price point. Constellation, based in New York, retains all of its beer brands, SVEDKA Vodka and several other wine labels, including the famous Robert Mondavi family of brands. At the end of last year, Constellation invested $ 4 billion in Canopy Growth, a cannabis company based in Canada.

Earlier this year, Wine Business Monthly named Gallo # 1 and Constellation # 3 of America’s largest wineries by volume. Livermore’s Wine group (with a large production facility near Ripon) came in at # 2.

Gallo has a long history of selling wine at various prices and should do well with the labels he buys from Constellation, said Cyril Penn, editor of Wine Business Monthly, speaking by phone from his Sonoma office.

“I wouldn’t expect them to belittle these brands,” he said. “If anything, it will make them younger. ”

Gallo has succeeded through “vertical integration” that brings together grape growing, bottle making, distribution and other functions under one ownership, Penn said.

Brothers Ernest and Julio Gallo founded the winery in Modesto in 1933. It focused on low-cost wines from the San Joaquin Valley for most of its history, but branched out in the 1980s into upscale vineyards near the California coast. Gallo later added Washington state and also imports wine and spirits from several countries.

Growth came from Gallo’s own start-up wineries and purchases from established brands. Usually the acquisition costs are disclosed because the companies are not publicly traded. The constellation is.

For Gallo, the addition brings a few well-known brands into its portfolio.

“We are committed to remaining a family business focused on growing the wine industry,” Gallo CEO Joseph E. Gallo said in a press release on the acquisition. “As we continue to invest in our premium and luxury businesses, we see a tremendous opportunity with this acquisition to attract new consumers to the wine category. We will continue to provide our customers and consumers with quality products at all prices. “

The Gallo portfolio includes over 100 brands, including the Gallo Family Vineyards, Barefoot Cellars, Dark Horse, Apothic and Ecco Domani wine labels. Its list of spirits includes New Amsterdam vodka and gin, E&J brandy and Familia Camarena tequila.

The deal is one of the most significant acquisitions for a Central Valley-based company in recent history. In 2002, Save Mart Supermarkets purchased Food 4 Less for $ 165 million. In 2007, 5.11 Tactical owner, founder of Modesto, Dan Costa, sold his company’s controlling stake for $ 305 million.

“It’s a big deal; this is a significant acquisition for the central valley, ”said Jeff Michael, director of the Business Forecasting Center at the University of the Pacific at Stockton. “This makes Gallo a bigger player in the wine industry here, where they are already important and dominant.”

This story was originally published April 3, 2019 2:40 p.m.

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