It encompasses everything from an accounting of the largest winery and vineyard mergers and acquisitions to what wine categories and price points were the hottest in off-premise sales and direct-to-consumer shipments, to the articles that you, our readers, clicked on most often to read. The “best and biggest” items that follow are based on data, much of which was sourced from our own Wines Vines Analytics, plus data partners IRI, ShipCompliant, BW166 and others.

BIGGEST DEAL

Constellation Trades Canadian Holdings for Growing Brands

The wine industry’s biggest companies decided they needed to move up the price-point ladder in 2016, and as a result, the past year saw some major deals. The largest came in October, when Constellation Brands Inc. sold its Canadian wine business for $760 million ($1 billion Canadian) to the Ontario Teacher’ Pension Plan. The deal included the flagship brand Inniskillin, which is famous for its ice wine. Concurrent with that deal, San Francisco, Calif.-based Constellation announced it would be buying several brands developed by Washington state vintner Charles Smith for $120 million. The brands included Kung Fu Girl Riesling, Eve Chardonnay, Boom Boom Syrah and others. Constellation had initially floated the idea of an IPO for its Canadian division, which prompted a few large investors such as the teachers’ pension plan to approach the company about acquiring it outright. E. & J. Gallo Winery was busy as well, buying 100,000-case Orin Swift Cellars in June. Neither Gallo nor Orin Swift disclosed the purchase price, and the deal included several brands such as Mercury Head, Abstract, Palermo and the company’s tasting room in St. Helena, Calif. It was another big payout for Orin Swift founder Dave Phinney, who sold the iconic wine brand The Prisoner to Huneeus Vintners in 2010. And who owns The Prisoner now? That’s also Constellation, which bought it from Huneeus Vintners in May 2016 for $285 million, another major deal from 2016. Jackson Family Wines (JFW) continued to pursue its strategy of buying premium estates in California and Oregon. The company bought 9,000-case Field Stone Winery & Vineyard and 30,000-case Copain Wines in Sonoma County this year as well as 25,000-case Willakenzie Estate, along with its 125 acres of vineyards in Oregon. JFW also bought the former headquarters of Evergreen International Airlines in McMinnville, Ore., which will serve as its central Oregon offices, and the company is building a winery there, which they hope will be functional in time for the 2017 harvest. Woodinville, Wash.-based Ste. Michelle Wine Estates reversed the trend of Californian companies buying brands and property in the Northwest by acquiring Sonoma, Calif.-based Patz & Hall Wine Co. in April. “There continues to be an appetite for acquisitions, especially brands that fill portfolio gaps for larger wine companies,” said Mario Zepponi, whose company Zepponi & Co. in Santa Rosa, Calif., helped put together the Orin Swift, Willakenzie and several other deals this year. “They feel like they have to be moving up market with their acquisitions.” Selling wine for less than $10 per bottle has become brutally competitive, and Zepponi said large wine companies also see consumers trading up and their competitors buying premium properties. “They are looking at what things are going to help (them) stay relevant with consumers,” he said. “They have to be pretty responsive to that, or they’re going to find themselves falling behind.” Zepponi said he had thought the current cycle of acquisitions would be coming to an end by now, but when he spoke to Wines & Vines in early November, he didn’t anticipate things changing much in the new year. “Unless there’s some macroeconomic issues, at this point I’d say that 2017 sure looks like a continuance of 2016.”

Read more at: Wines & Vines