Sale of Napa's Prisoner indicators trade in wine markets - SFGate

picture 1 of 6

in this Aug. 16, 2011 image, Richard Sands, left, and Rob Sands, of Constellation brands, Inc., pose for a photograph inside their headquarters in Victor, N.Y. Richard and Rob Sands have turned their father's little wine business right into a effective participant in alcoholic drinks with reasonably priced wines, spirits and imported beers like Robert Mondavi, Svedka and Corona additional. much less in this Aug. 16, 2011 image, Richard Sands, left, and Rob Sands, of Constellation manufacturers, Inc., pose for a photo interior their headquarters in Victor, N.Y. Richard and Rob Sands have turned their father's little ... extra image: David Duprey, AP

graphic 2 of 6

The Prisoner Wine Co.'s namesake brand is a Zinfandel-primarily based mix with a Francisco de Goya label.

The Prisoner Wine Co.'s namesake brand is a Zinfandel-based blend with a Francisco de Goya label.

photo: Craig Lee, The Chronicle

picture 3 of 6

Steve Jones retail outlets for burgundy and champagne at k&L in San Francisco, California on wednesday, february 6, 2016.

Steve Jones shops for burgundy and champagne at okay&L in San Francisco, California on wednesday, february 6, 2016.

photo: Liz Hafalia, The Chronicle

photo four of 6

Three of Prisoner's manufacturers: the Prisoner Zinfandel-based mostly blend (left), Saldo Zinfandel and Chardonnay blend Blindfold.

Three of Prisoner's manufacturers: the Prisoner Zinfandel-primarily based mix (left), Saldo Zinfandel and Chardonnay blend Blindfold.

image: Liz Hafalia, The Chronicle

graphic 5 of 6

in this June 27, 2011 image, Constellation manufacturers Robert Mondavi wines are displayed at a liquor shop in Palo Alto, Calif. The maker of Robert Mondavi wine and Svedka vodka mentioned Thursday, June 30, its first-quarter income jumped 52 p.c to $seventy five million on more suitable wine and spirits earnings in North the united states.(AP picture/Paul Sakuma) less during this June 27, 2011 picture, Constellation brands Robert Mondavi wines are displayed at a liquor store in Palo Alto, Calif. The maker of Robert Mondavi wine and Svedka vodka noted Thursday, June 30, its ... greater picture: Paul Sakuma, AP

graphic 6 of 6

Bottles of wine produced by means of Constellation brands, Inc., are shown at Premier Wine & Spirits in Williamsville, N.Y., Thursday, Dec. 23, 2010. Constellation brands Inc. talked about Thursday it's selling an eighty % stake in its Australian and British wine company to an Australian inner most equity enterprise for about $230 million, losing its big difference because the world's greatest wine business. (AP photo/David Duprey) much less Bottles of wine produced via Constellation brands, Inc., are shown at Premier Wine & Spirits in Williamsville, N.Y., Thursday, Dec. 23, 2010. Constellation manufacturers Inc. said Thursday it is selling an 80 % ... greater picture: David Duprey, AP

Sale of Napa's Prisoner signals exchange in wine markets

1 / 6

back to Gallery

Beverage huge Constellation brands has introduced that it's going to buy Napa Valley's Prisoner Wine Co. for about $285 million.

The stream is the latest excessive-profile acquisition in a buying spree by Constellation. In November, the business purchased San Diego's Ballast element Brewing for $1 billion, three months after it bought Meiomi from Napa vintner Joe Wagner for $315 million.

As with the Meiomi purchase, the Prisoner Wine business deal contains most effective a manufacturer — no vineyards. These dazzling company costs imply a big departure from the model that has lengthy dominated the wine industry, in which land includes the premiere capital.

Now, it would appear, manufacturer trumps land.

"Our aim is to be a frontrunner within the top rate U.S. wine market and to continue to premiumize our portfolio, and 'tremendous luxurious' is among the fastest transforming into segments in the category," pointed out invoice Newlands, president of Constellation's wine and spirits division. The "super luxurious" category comprises wines costing more than $25 a bottle.

This extreme center of attention on the tremendous luxurious sphere is reflective of the place wine consumers are gravitating.

"Constellation is making an attempt to do the equal issue that Gallo's trying to do — buying up great wine organizations and higher-priced wines," pointed out Rob McMillan, executive vice president of Silicon Valley bank's wine division. "The tremendous wine businesses which used to focal point on better-volume, decrease-priced wines have diagnosed that the earnings of these below-$9 wines have been shedding like a stone.

5 brands

"They're trying to get appropriate in entrance of the market because it evolves."

The Prisoner Wine Co., currently owned via Rutherford's Huneeus Vintners, includes five wine brands, which Newlands known as "class-leading, unique and imaginative wine blends ranking within the proper one or two" within the super luxury class. The portfolio consists of Blindfold, a Chardonnay blend; Cuttings, a Cabernet blend; Saldo, a Zinfandel; Thorn, a Merlot mix; and, of path, the Prisoner itself — a $35 Zinfandel-based mostly mix whose etched Francisco de Goya label will seem generic to purchasers of wine retail outlets in all places the nation.

different Constellation bottles are also doubtless regular to the public: Robert Mondavi winery, cook's, Manischewitz, Clos du Bois. It's additionally an important participant in the beer and spirits realms, owning beer brands including Corona and Modelo, and spirits including Svedka vodka.

This won't be the first time the Prisoner has modified palms. Launched in 2000 with the aid of Dave Phinney, of Orin Swift Cellars, the Prisoner fortunately coincided with a surge in popularity of the "pink blend" class of wine. It directly found mass-market success. by using 2010, the wine's construction had grown to eighty five,000 situations, and Phinney bought it to Huneeus Vintners. The rate on the time became $40 million.

Constellation's history

Six years later, the Prisoner's creation has multiplied to a hundred and seventy,000 instances yearly.

Constellation brands became launched by means of 21-year-ancient Marvin Sands in Rochester, N.Y., in 1945 as the Canandaigua Industries Co., a negociant-trend seller of bulk wine.

The company first went west in 1974 when it obtained Bisceglia Brothers vineyard in Madera. although the focus remained on wine for many years, Canandaigua definitely solidified its presence in beer and spirits with the 1993 acquisition of Barton Inc. — which brought beer brands Corona, Peroni and St. Pauli lady, plus Ten excessive Bourbon whiskey, Montezuma Tequila and California gleaming wine pioneer Paul Masson. In 2000, Canandaigua was rechristened as Constellation manufacturers.

nowadays, with behemoth brands like Svedka, Modelo and Kim Crawford Sauvignon Blanc, one may nearly imagine a whole bar stocked with Constellation items. It has more than one hundred manufacturers and owns 20,000 acres of vineyards. It sells 67 million circumstances of wine and spirits each year, and 182 million cases of beer.

For the Prisoner, current commonplace supervisor and winemaker Jen Beloz will continue to be in can charge, however production will circulation to the Constellation-owned Franciscan property in St. Helena. When asked no matter if the latest vineyard sources of the Prisoner wines would reside the equal, Newlands hinted that some adjustments could be within the works.

retaining wine consistent

"We intend to proceed their sourcing contracts as well as provide further entry to our top rate Napa fruit," he said, including that the focus would be on maintaining the wine styles.

If the vineyards do change, conserving these consistent patterns may be difficult. "That finally ends up being the conundrum that massive wine agencies ought to take care of," talked about McMillan. "Returns on investments in vineyards aren't high-quality within the brief term — it takes about 25 years to look a fine return. however's difficult to hold the wine consistent if you must find new winery sources."

no matter if or no longer Constellation manages to achieve consistency, McMillan believes it's poised to find success. The brand is already up and running, in huge distribution, with loyal patrons and recognizable branding. "I see this as a extremely intelligent circulate for Constellation," he mentioned. "It's going to be unique to peer the place they take it."

Esther Mobley is The San Francisco Chronicle's wine, beer and spirits writer. email: emobley@sfchronicle.com Twitter: @Esther_mobley