Two well-known Sonoma County wineries – Clos du Bois and Sebastiani – are closing this month for the same reason: economies of scale.
The wine brands are not going away. But Gallo is closing theClos du Boiswinery in Geyserville, and Foley Family Wines is closing theSebastianiwinery in downtown Sonoma, because it's simply more efficient to make those brands somewhere else.
| Related stories: |
| Gallo Set to Dominate the Bargain Basement |
| Wine Sales Up, Winery Profits Down |
| Foley the Latest to Buy into Oregon |
Older wine drinkers might have long emotional connections to these wineries, but the companies that currently own them do not. Foley bought Sebastiani in 2008. In January of this year, Gallo acquired Clos du Bois as part of a basket of 30 bargain brands from Constellation Brands in a deal that took more than two years for the Federal Trade Commission (FTC) to approve.
Once a wine ceases to be an estate wine and becomes a brand, there's no reason to make it in any one particular place. In the case of Clos du Bois, the Geyserville facility had been underused during the long wait for regulatory approval. The Santa Rosa Press-Democrat reported that Gallo is laying off 40 employees, almost the entire staff. Gallo wanted the brand, which remains popular in parts of the U.S., but it didn't need another winery: it owns three other wineries inSonoma Countyand three inNapa County, not to mention its enormous operation in Modesto.
As for Sebastiani, the winery in the heart of downtown in the city of Sonoma had a lot of character that could charm visitors, but as the population grew around it, it increasingly became inconvenient for wine production. Meanwhile, in June 2020 Foley Family Wines bought the much largerFerrari-Caranowinery outside of Healdsburg.
"We plan to keep the tasting room and the administrative offices at the Sebastiani site open," Foley Family Wines president Shawn Schiffer told Wine-Searcher. "We have not considered any other options for the rest of the site at present."
Schiffer said it was pure coincidence that the two wineries closed at the same time.
"Our decision to move production away from Sebastiani has been under consideration for some time, and was a key factor in our acquisition of Ferrari-Carano, whose state-of-the-art facility offers us additional production capacity with much more efficiency," he said.
Schiffer said Foley produced about 160,000 cases of Sebastiani wine over the last 12 months at the Sonoma facility. He said the brand will continue with a tighter focus on Sonoma County Cabernet,Alexander ValleyCabernet, Sonoma County Chardonnay and a Bourbon barrel-aged red blend.
Gallo does not release production figures for its wine brands, including its new ones, but Clos du Bois shrank during the two vintages when its proposed sale left it in limbo between two large wine companies. A Clos du Bois employee told the Press-Democrat that Gallo representatives said sales dropped from $4.5 million to $1.8 million during the interregnum.
Tough times for cheap wine
Both brands face a difficult market for supermarket wines. Wine sales in the US overall were steady last year after several years of slowing growth. However, most sales growth has been in the $15-25 range. Sales of wines under $11 have been dropping for several years. It's no coincidence that the wines Schiffer says Sebastiani will continue to make are just above that dollar figure.
Clos du Bois, though, has been in the uncomfortable position of being just above the bottom shelf for years, with many of its wines costing $9 or less. The winery was founded in 1974 with loftier intentions but it went through several owners before Constellation bought it from a spirits producer in 2007.
Constellation made its fortune in the cheap wine business; its first big hit brand wasWild Irish Rose. But now it's interested in pricier stuff. Wild Irish Rose and Manischewitz were in the basket of bargain brands Gallo bought from Constellation, along with former real wineries Ravenswood, Blackstone, Estancia, Hogue Cellars and Franciscan. Constellation already turned the onetime Franciscan tasting room and winery – not included in the deal – into a showcase Napa Valley tasting room for The Prisoner, which may not be a lot different from those other wines in the bottle, but costs a lot more on the shelf.
Most major US wine companies aren't even trying to make wine under $10 now. The Wine Group and Bronco are exceptions, but Gallo – the world's largest wine company – is the dominant player, which is why the FTC held up the Constellation-Gallo deal for so long. Yet if the deal hadn't been approved, it's possible that no other company would have stepped up to buy those brands.
Constellation is a public company so it must answer to stockholders; lately it has made large investments in beer and cannabis. Gallo is enormous, but it's still family-owned and can take the long view.
"We believe in providing our consumers and customers with quality products at every price point," a Gallo spokesperson told Wine-Searcher. "Research shows that most consumers enter the wine category through the under $11 category. In addition to bringing new consumers into the category, the under $11 category provides the greatest amount of format innovation and wine style innovation."
Despite its commitment to the category, it's a good time to polish the resume for workers at any of the other wineries in the Gallo-Constellation deal. Gallo offered severance to the laid-off Clos du Bois workers but did not offer them automatic jobs in the company.
The future of Sebastiani's workers isn't clear. Some are represented by Local 186 of the United Food and Commercial Workers (UFCW) union. A Sonoma-Index Tribune story said workers fear that the plan to move production to the Ferrari-Carano facility is an attempt to replace them with non-union workers. The paper said negotiations are ongoing.
Fortunately, it's a good time to be looking for a wine job in Sonoma County.
"Being laid off is never great, but it's actually happening at a great time," said Eric Jorgensen, president of Wine Business, which runs theWine Jobswebsite. "Those people aren't going to have any trouble finding work. That's especially true for tasting room staff. People are looking for cellar workers and harvest help, which is not a full-time job, but can become one."
In fact, if you have read this far and you're thinking about trying your hand in the wine industry yourself, Jorgensen has a website for you.
"One of the things we're thinking about at Wine Jobs is how can we attract more people from outside the industry," Jorgensen told Wine-Searcher. "We noticed in late January that things have really started to pick up. In March and April, it's been really going gangbusters. I know wineries are hungry for cellar people. On our website there are over 1600 jobs that have been posted in the last 35 days. On the hiring front, things are booming in the wine industry."
