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Revenues At Three Wine Distributors Equal Almost Half Of The U.S. Wine Market Value

This article is more than 6 years old.

The trade magazine Wines & Vines recently released a list of the top 10 wine distributors in the United States. The list was compiled by the magazine’s data research arm, Wine Vines Analytics.

Some of the news on wine distributors is startling; some is not. 

For instance, in another article, using data from the Chicago-based market research firm IRI Worldwide, Wines & Vines reports the U.S. wine market was worth about $62 billion in 2016. Of the top 10 distributors on this latest listing, the top three startlingly account for nearly $30 billion in wholesale wine movements; that’s big, and it clearly reflects the move toward consolidation in the distribution industry over the past two decades.

At No. 1 on the list, Southern Glazer's Wine & Spirits alone accounts for about $16.5 billion in revenue — which Jim Gordon of Wines & Vines points out exceeds the revenue of the giant Constellation Brands, with its winery ownership throughout the world. The massive distribution company has been in legal trouble lately across the country

Another startling data set concerns the number of domestic wineries being distributed by the top 10. In a recent report, Wines & Vines has the number of U.S. wineries at 9,217. In the top 10 list, the number of domestic wineries represented by eight of the distributors totaled 3,769. The two distributors for which no number of wineries was provided are Johnson Brothers Liquor Company (No. 5) and Martignetti Companies (No. 8), but based on the number of wines represented at the eight other distributors, it appears less than half the number of domestic wineries are in the books of the top 10 distributors; the vast majority of those wines are produced on the West Coast. 

Not to digress, but it would be informative if Wine Vines Analytics — or any other data gatherer — could enlighten as to how many domestic wineries are handled by smaller distributors, and how many small distributors operate in the U.S. It would also be enlightening to know how many domestic wineries don’t use or can’t find a distributor. Adding these stats to the top 10 distributor stats and then comparing how much wine goes through Direct-to-Consumer sales channels could provide the clearest picture yet concerning the future of wine retailing. 

Most of the top 10 distributors on the list can claim roots either before Prohibition or as the result of repeal. These businesses have been protected by legislation favoring tight controls over who gets to handle and sell wine. Until very recently, they have had little incentive to change their way of doing business; consolidation has been a way of growing revenue, not to mention growing influence. Although individual state laws still favor the producer-to-distributor-to-retailer three-tier system, and the laws often favor large distribution companies, the internet is already the cause of rules changes. The threat to complacency is real in wine distribution. It will be interesting to watch how the top ten companies face that challenge and which ones rise and fall in the list.

For now, here’s the list. To find out which wineries the companies represent you have to either go to their websites or get a copy of their product book.

  1. Southern Glazer’s Wine & Spirits — 36 states

  2. Republic National Distributing Co. (RNDC) — 22 states 

  3. Breakthru Beverage — 15 states 

  4. Young’s Market Co. — 11 western states 

  5. Johnson Brothers Liquor Co. — 22 states (Midwest, Southwest, NY & W. Virginia)

  6. Heidelberg Distributing — Ohio and Kentucky 

  7. Wine Warehouse — California 

  8. The Martignetti Cos. — New England 

  9. Empire Merchants LLC — New York Metro 

10. The Winebow Group — 20 states

It’s good to know which outfit handles the domestic wine you seek but can’t find where you live; that way, you can tell your retailer where to go to get it. If that doesn’t work, you can always take advantage of one of the rules changes: call the winery and possibly have it shipped directly to your home.

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