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Brands like Arbor Mist, Clos du Bois, and Manischewitz were included in one of the America's largest wine deals ever.

By Mike Pomranz
January 06, 2021
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E & J Gallo Winery and Constellation Brands are two of America's largest wine companies. In fact, they're so big, the companies themselves probably don't matter to most consumers: More likely, you know them by the many individual brands under their umbrellas: Gallo for names like Barefoot, Dark Horse, and Apothic; Constellation for Mondavi, Charles Smith, and Kim Crawford.

So what does it matter if Constellation sells over 30 of its brands to E & J Gallo—an $810 million move that was officially announced as finalized this week? As one of America's largest wine deals ever—taking nearly two years of wrangling with regulators to receive approval—the sale has historical significance and could potentially set off alarms about consolidation in the wine industry. But for consumers, in the short term, you probably won't notice many differences at all.

Customer reading label on red wine bottle in a supermarket, Munich, Bavaria, Germany
Credit: Dreet Production/Getty Images

The sale includes plenty of well-known wines—from standbys like Ravenswood and Mark West, to boxed wine specialist Black Box, to even the kosher wine king Manischewitz. Other brands Gallo mentions in the announcement are Arbor Mist, Clos du Bois, Estancia, Franciscan, Hogue, Taylor, Vendange, and Wild Horse. Already America's largest wine company, Gallo points out that this acquisition accelerates their growth and expands their wine portfolio "at every price point"—though all of the American-produced brands reportedly retail for just $11 or less.

"These are iconic brands within their categories that resonate with consumers," a Gallo spokesperson told me via email. "We are excited about the strong presence these brands have throughout the U.S. and around the world.  We plan to respect the legacy of these brands while devoting our efforts to revitalizing brands and continuing to make the highest quality wines."

The spokesperson also mentioned that Gallo "will be making packaging changes to select brands once integration is complete," so if you drink any of these wines regularly, you may notice them getting a facelift at some point. Additionally, those wines not already distributed outside of the U.S. could eventually get a larger rollout. "We are continuously looking for new opportunities to bring California wines to the world," they added.

Meanwhile, looking at the industry implications, the sale seems to solidify a shift by Constellation away from less expensive brands, something Gallo has continued to embrace. (As an interesting aside, The Press Democrat reports that this sale was so big, Constellation has dropped from America's third largest wine producer down to our fifth.) "Research shows that most consumers enter the wine category through the under $11 category," Gallo told the San Francisco Chronicle. "While we continue to invest in our premium and luxury wine businesses, we see a tremendous opportunity with this acquisition to bring new consumers into the wine category."

Gallo CEO Ernest J. Gallo had an even broader takeaway. "The closing of this transaction represents our company's long-term commitment to the wine industry," he stated in the announcement. They'd better be committed: According to the Press Democrat, Gallo is now behind about 30 percent of all bottles of wine produced in California.