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July 2015 WINES&VINES 15 WINE INDUSTRY NEWS G len Ellen, Calif.—When The Wine Group, the second-largest U.S. wine company, ac- quired Benziger Family Winery and Imagery Winery in Sonoma Valley on June 8, some members of the trade felt luxury brands were not a natural fit in The Wine Group's portfolio. The reason for the sale seems to be a combination of some of the Benziger siblings wanting to cash out, undisclosed health issues of founder and CEO Mike Benziger (which he says have been re- solved) and increasing competi- tion in the wine business. Benziger said, "With the knowl- edge that we're selling the winery to a privately held company that shares our values, now is the per- fect time for me to pursue other passions. We are certain that The Wine Group will carry on the Ben- ziger family's legacy of quality." "We look forward to continuing to build on Benziger's reputation as a producer of some of Sonoma County's best wines, while provid- ing visitors with an unrivaled ex- perience at the beautiful and unique Sonoma properties," said Brian Vos, CEO of The Wine Group. "As we continue to move into the super-premium category, we have been thoughtful in our search for a winery that produces exceptional wines while sharing our values of integrity, social responsibility and innovation. The Benziger family is not only celebrated for its out- standing wine quality, but their strong team will be a great cultural fit within The Wine Group." The deal includes the 139,000- case Benziger Family Winery, 85- acre Demeter-certified Biodynamic vineyard in Glen Ellen and vine- yards owned or under long-term lease in the Sonoma Valley, So- noma Coast, Russian River Valley, Sonoma Mountain and Pine Mountain-Cloverdale Peak AVAs. Financial terms were not dis- closed, though industry estimates of the sale ranged from $70 mil- lion to more than $100 million. The Wine Group will also ac- quire the Benzigers' Imagery Win- ery and tasting room on Highway 12 in Glen Ellen, about 2 miles east of Benziger Family Winery. It once housed a perhaps-premature craft beer producer, Sonoma Mountain Brewery. The winery purchase is only the latest move upscale by a top- 10, high-volume wine firm. The largest wine company, 85 million-case E. & J. Gallo Winery, bought J Vineyards in Healdsburg, Calif., earlier this year to build on its less expensive but fast-growing Barefoot bubbly in the hot spar- kling wine category. It also followed earlier acquisition of Sonoma vine- yard property and developing up- market brands as well as buying William Hill and Louis M. Martini wineries in Napa Valley. No. 3 wine conglomerate Con- stellation has been moving up in the wine market, too, including the purchase of Franciscan, Robert Mondavi and other brands as well as acquiring half interest in Opus One while shedding value brand Almadén to The Wine Group. The Trinchero family created luxury Trinchero Napa Valley after adding other brands above its Sut- ter Home, and Delicato Family Vineyards bought Black Stallion in Napa Valley and moved its headquarters to Napa. Likewise, Ste. Michelle Wine Estates acquired 85% of Stag's Leap Wine Cellars in Napa Valley (Tus- cany's Antinori bought the rest). Almost all of Benziger's staff will stay on for the transition. Mark Burningham, who has worked with the family for almost 30 years, will take over as general manager of North Coast opera- tions for the Wine Group. Two of Mike Benziger's broth- ers will remain with the company: Chris Benziger will become vice president for trade relations at Benziger, while Joe Benziger re- mains winemaker for Imagery. Mike Benziger and president Tim Wallace are reportedly the only employees leaving the com- pany because of the acquisition. Though some question the com- mitment of the huge Wine Group to quality, CEO Brian Vos has vowed to maintain Benziger's pioneering efforts in organic and Biodynamic grapegrowing. By all accounts it has supported Concannon Vineyards, increasing volume and promotion while maintaining quality. Unlike in the past, when large spirits companies bought and de- based top brands such as Ingle- nook, Paul Masson and Almadén, today's buyers want to move up- scale and try to maintain or build The Benziger Family Winery sale included its 85-acre Biodynamic vineyard. —continues on page 17 TOP STORY The Wine Group Moves Upscale CALIFORNIA RAINFALL—SEASON TO DATE Season to Date Average to Date Percent of Average to Date Lodi 10.3 13.4 77% Monterey 5.1 8.6 59% Napa 21.2 35.0 61% Sonoma 23.3 29.8 78% RAINFALL SEASON TO DATE—PERCENT OF AVERAGE 0 20% 40% 60% 80% 100% Rainfall season July 2014-June 2015, rainfall data in inches through June 12. Source: winebusiness.com, California Irrigation Management Information System Lodi Monterey Napa Sonoma