A $6O MILLION SCORE

CONSTELLATION BRANDS has made a significant move to position itself as a major player in the premium wine category. The drinks company recently paid $6O million to acquire cult wine producer Schrader Cellars in June. Schrader produces just 25OO to 4OOO cases a year and sells its routinely high scoring wines, such as its Old Sparky’ Cabernet from the To Kalon vineyard, for $2OO a bottle. Interestingly, Schrader has neither a winery nor vineyards – it buys all of its grapes from Andy Beckstoffer, who owns parcels of some of Napa’s most historic sites such as the To Kalon vineyard – yet it was deemed to be worth $6O million. The price tag shows how valuable an inventory and a mailing list of loyal customers can be as Schrader sells most of its wines via its mailing list of high net worth consumers, big name retailers and top restaurants. The sale also includes the 2O15 and 2O16 vintages, which are still in barrel, as well as part of the winery’s inventory. Constellation has no plans to up production or change its business model and Thomas Brown will continue as chief winemaker. With Constellation already in charge of the majority of the To Kalon vineyard through its Robert Mondavi Winery, Schrader is set to benefit from the connection and could be offered a share of the To Kalon grape allocation allotted to Mondavi in order to make more wine, and thus, more money. Mondavi’s chief winemaker Genevieve Janssens will decide which parcels of the To Kalon vineyard Cabernet will remain with Mondavi, and which might be merged with Schrader. However, there is always the danger that as production rises, quality is compromised, which would damage the brand’s reputation.