Wineries Industry Overview

Excerpt from Wineries Report

Companies in this industry make wine and brandies either from grapes that they grow or that are grown elsewhere. Major companies include Constellation Brands, E&J Gallo, and Jackson Family Wines (all based in the US), Veuve Clicquot Ponsard (France), Distell Group (South Africa), Gruppo Italiano Vini (Italy), and Viña Concha y Toro (Chile).

Competitive Landscape

Demand for wine is driven by the restaurant and hotel industries, the level of business entertainment spending, and consumer income. A winery's profitability depends on production volume and sales price, both of which can vary from year to year. Large companies have stronger distribution channels and can enjoy significant economies of scale in production. Small wineries can compete with big-volume producers by making higher-quality wines that sell at a premium price. The industry is concentrated; the 50 largest companies account for more than 75 percent of revenue.

Products, Operations & Technology

Red and white wines, along with other varieties containing 14 percent or less alcohol, make up about 60 percent of the market. Leading varietals (wines named after the grape they are made from) are chardonnay, pinot noir, merlot, white zinfandel, cabernet sauvignon, pinot grigio, syrah, and sauvignon blanc. Brandy, brandy spirits, and other wines account for 15 percent of industry revenue; dessert wine, wine coolers, and effervescent products account for about 10 percent.