Monday, February 28, 2011

Wine Industry 2011: A Brave New World

Hello Again,

When last I mused here I mentioned DFV wines of California as possible subject matter for an article. The context for my query had to do with the relatively high quality in their portfolio considering the enormity of their production. DFV ranks as the 11th largest domestic wine producer yet seems to produce wines that outperform others at respective price points. After some research we have learned some surprising facts about DFV.

First of all DFV acknowleges a recognition that the customer (rightfully) insists on quality at popular prices, a mission statement of sorts. By making and marketing fifteen or so brands of domestic and imported wines, DFV has woven a fabric of production that seems to offer a quality product for most any need. Now by taking an historical look at the company, may we gain insights into what the modern wine industry has become?

DFV is an 85 year old company originated by Gaspare Indelicato, an immigrant from winemaking heritage in Italy. The company was originally called Delicato and struggled mightily early in its history due to prohibition and the depression. With land holdings in Lodi and headquartered in Manteca, California, the Delicato company plotted a parallel course to their better known rival, Gallo. Delicato, however was never as independent as Gallo and built longstanding business relationships with their neighboring wineries and grape suppliers like Giumarra, the largest non-winery grower of wine grapes in the world. When the time was right Delicato was ready to grow.

Today Delicato is DFV (Delicato Family Vineyards) and owns 10,000 acres in Lodi and the central coast. Their sales are $200 million annually and their production is 2.67 million cases and with a 23% increase in production in the past year, they are the fastest growing wine company in California. Now here is the staggering truth about DFV. They actually produce five times as much wine...for others. DFV is a custom winemaking outsourcer, a contractor for other mega-companies to rely upon to bolster production. Some of the most familiar labels on the grocery store shelves, though branded as another company's production, were really made by DFV! As might be expected with increased production, acquisitions in winery capacity and vineyards are ongoing. It is truly a brave new world for the domestic wine industry.


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