How E&J Gallo Captured the #1 On-Premise Ranking from Constellation Brands*

November 5, 2018 § Leave a comment

In 2013, Constellation Brands (CBrands) had a commanding lead among suppliers on-premise, based on Winemetrics On-Premise Wine Distribution Reports with a 40% lead in combined By-the-Glass (BTG) and By-the-Bottle (BTB) listings over 2nd place E&J Gallo.  By 2017, the same survey placed E&J Gallo (E&JG) in 1st place, with a 12% lead over now #2 CBrands. So what happened to CBrands in 4 short years to have them lose such a commanding lead in wine distribution?

  1. Most of CBrands top 15 brands lost distribution during the 2013-2017 period while a majority of E&JG’s brands gained share.
    During this period, among the top 15 CBrands producers, 11 lost share while just 4 gained distribution share. In contrast, E&JG had 11 brands gain share with only 4 falling in distribution. If we remove the recent CBrands acquisitions (Meiomi, The Prisoner Wine Co.), the top 15 CBrands distribution, would have dropped by nearly 1/3.  
  2. CBrands, with the exception of Pinot Noir, did not invest in varieties that produced significant growth during this period.
    In 2013, CBrands had the number #1 Zinfandel brand, Ravenswood, which was the #2 brand in the CBrands portfolio. It fell to the 14th ranked the brand in the CBrands’ group, having fallen -85% over this period. Likewise, Blackstone, the 4th ranked brand in CBrands’ portfolio in 2013, and the leading Merlot brand at the time, lost -71% of distribution by 2017, and now ranks 12th.

    Of E&JG’s 3 leading brands in 2013, Ecco Domani #1 brand,(Pinot Grigio) grew +7%, while 2013’s #2 (Mirassou) and #3 (Macmurray Ranch) both predominantly Pinot Noir producers, lost double digit share by 2017. E&JG was able to offset these losses with growth by  La Marca (Prosecco), up +147% and Apothic (Red Blend) +465%.

    It could be fortuitous that E&JG invested in varieties that experienced robust growth during this period and CBrands’ misfortune to be heavily invested in varieties (Zinfandel, Merlot) that experienced sharp declines during this period. However, Pinot Grigio, Prosecco and Red Blends, E&JG’s major source of growth,  had been growing for a number of years. However, with 2 robust Pinot Noir brands in 2013 (Mirassou and MacMurray Ranch) it is curious how these brands could not take advantage of this variety’s growth during this period.  It also seems inexplicable that a pre-eminent supplier like CBrands could not effectively promote a brand in these expanding Prosecco, Red Blend and Pinot Grigio segments.  It is interesting to note that the 3 top brands of E&JG were ‘home-grown’ while nearly all of CBrands leading producers were purchased from existing suppliers.

  3. Winemetrics Data Tables
    2013 2017 2107
    Rank #BTG #BTB BTG+BTB % CHG Rank
    Constellation Brands 2416 3211 5627 -21%
    1 Ruffino 198 283 481 -29% 4
    2 Ravenswood 35 68 103 -85% 14
    3 Mondavi Priv. Select. 176 179 355 -42% 6
    4 Blackstone 84 89 173 -71% 12
    5 Woodbridge 90 90 180 -69% 11
    6 Clos du Bois 167 195 362 -35% 5
    7 Estancia 120 181 301 -36% 8
    8 Franciscan 41 264 305 -19% 7
    9 Mark West 305 313 618 83% 9
    10 Crawford, Kim 253 287 540 76% 3
    11 Simi 41 63 104 -62% 13
    12 Hogue 40 49 89 -67% 15
    13 Nobilo 111 120 231 160% 10
    14 Meiomi 286 329 615 ++ 2
    15 The Prisoner Wine Co. 46 203 249 ++ 9
    2013 2017 2017
    Rank #BTG #BTB BTG+BTB % CHG Rank
    E&J Gallo 3078 3241 6319 24%
    1 Ecco Domani 553 552 1105 7% 1
    8 La Marca 362 204 566 147% 2
    11 Apothic 266 265 531 465% 3
    5 Canyon Road 269 253 522 62% 4
    2 Mirassou 211 217 428 -26% 5
    9 Martini, Louis M. 151 195 346 56% 6
    7 Barefoot 152 152 304 24% 7
    4 Alamos 125 134 259 -21% 8
    NA Starborough 108 108 216 ++ 9
    NA The Naked Grape 107 107 214 3467% 10
    12 Dark Horse 82 116 198 161% 11
    10 William Hill 89 104 193 89% 12
    3 MacMurray Ranch 55 100 155 -65% 13
    NA Carnivor 63 65 128 ++ 14
    6 Red Rock 57 60 117 -53% 15
*Based on Winemetrics On-Premise Wine Distribution Reports 2013, 2017 which survey wine distribution in 170 chains and restaurant groups. Only wine distribution is measured in this report, but the assumption incumbent in our report is that chain beverage managers retain brands that provide the most revenue so greater distribution is congruent with greater revenue. Our observations pertain strictly to on-premise analysis based on Winemetrics restaurant database.

 

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