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benzingerOne of my favorite wineries in Sonoma, Benzinger Family Winery, has been sold to The Wine Group, a large conglomerate of value wines. This continues the trend of industry consolidation with small and medium-sized wineries being swallowed by the three largest global brands (one of which is The Wine Group) that now control 1/2 of the wine sales in the U.S.

Benzinger makes fresh, delicious wines using bio-dynamically farmed grapes. What are the chances The Wine Group will maintain that commitment to quality? Here is a list of The Wine Group’s brands. None of them are impressive; not a premium brand among them. Apparently, The Wine Group wants to enter the premium market and they see Benzinger as the vehicle.

While until recently TWG has concentrated on low-end wines, the new management is looking to acquire high-end brands and sortie into the premium wine business. Benziger’s wines sell for $20 to $80 a bottle and are a step in that direction.
“Their mission is to take a powerful low end wine company and take it upscale,” Mike [Benzinger] said. “I think we can have an impact on a huge wine company and show them the way to become more environmentally responsible in farming and more socially aware.”

I’m skeptical. Although there are smaller wineries that make bad wine and large wine corporations that make good wine, there are many reasons why the big corporations often fail to maintain quality. In a large corporation, the decisions that influence the taste of the wine are made by many people. Every department head has input, especially the sales department that has to listen to customer complaints. There is no vision; just a product that will avoid offending anyone. By contrast, the smaller winemakers making wines for a dedicated following can stick to their unique vision, if they have one,  because their regular customers are already on board an they don’t need a broad customer base.

But perhaps more importantly, large wineries and conglomerates have no incentive to maintain quality. Success is measured by how much you sell, and large companies have a big advantage on the distribution side of the business. They already have relationships with distributors that guarantee their products get placed in supermarkets and wine shops. Distributors can’t say no to a large winery that brings them a lot of business when the winery wants to launch a new product.  Furthermore their customers tend to buy the brand they’re familiar with and often lack the ability to make subtle distinctions in quality. They look for consistency for a good price.

So where is the incentive to produce great wine for large industrial wineries and conglomerates? Even if the intention is to produce quality, the incentive structure of the business doesn’t support it.

Don’t get me wrong. There are excellent large-production wineries. Clos du Bois, Beringer, and Mondavi all make good wines at the reserve level; Bogle, McManis, and La Crema among others in the $20 and under range are consistently good. But there is nothing special about them. They appeal to generic customers with generic tastes. And for good reason. They are giving their customers what they want—which is not uniqueness or an extraordinary experience.

So it is an occasion for some sadness and concern when an original like Benzinger goes corporate.