E. & J. Gallo Winery has grown its Napa Valley foothold by another brand, this time Franciscan Estate, as part of a $1.7 billion deal to acquire 30 of Constellation Brands' wine and spirits brands. The deal also included six winemaking facilities spread across Washington, New York and California.
Constellation’s offloading of brands and wineries to Gallo, the largest wine company in the U.S., in part marks a shift for Constellation away from its lower-priced wines, and a vote of confidence in almost all of its Napa brands, except Franciscan.
While the sale included mostly under-$11-a-bottle wines like Ravenswood, Wild Horse, Mark West and Clos du Bois, Constellation will hold on to Napa wine brands like the Robert Mondavi family of brands, Schrader Cellars, Mount Veeder Winery and the Prisoner Wine Company.
In the company’s announcement of the sale Wednesday, Constellation president and CEO Bill Newlands said, “This decision will help enhance organizational focus on a more premium set of wine and spirits brands that better position our company to drive accelerated growth and shareholder value.”
For Franciscan, the handoff brings an end to the winery’s chapter under Constellation, during which it enjoyed a significant presence in Napa that in time was considerably scaled back.
Founded in 1973, Franciscan’s first owners ran short of funds and left the winery before it even opened. Silver Oak founders Justin Meyer and Ray Duncan bought the winery in 1975, selling a few years later.
The Eckes family then owned the winery throughout the '80’s, bringing in wine mogul Agustin Huneeus as a partner in 1985. As Franciscan president, Huneeus reportedly turned the winery’s failing fortunes around, before he and the other partners sold in the ‘90s to Canandaigua Brands -- later to become Constellation. That deal also included Mount Veeder winery, which Constellation plans to keep.
Post-Franciscan, Huneeus’ new venture, Huneeus Vintners, would go on to buy the Prisoner Wine Company from winemaker Dave Phinney, and in 2016, sold that brand to Constellation as well, for around $285 million.
In a full-circle of sorts, Constellation then closed the Franciscan property at Galleron Road and Highway 29, just south of St. Helena, in 2017 and reopened the space last year, but as the new tasting room of the Prisoner.
Now, with its profile withered and no longer connected to a Napa property, it’s unclear what the future holds for the Franciscan brand under Gallo’s auspices. But, with its new owners, the brand is now in the company of Napa brands like Orin Swift and Louis Martini, as well as renowned properties like the Stagecoach Vineyard.
In the company’s release Wednesday, CEO Joseph Gallo offered, "We are committed to remaining a family-owned company focused on growing the wine industry. While we continue to invest in our premium and luxury businesses, we see a tremendous opportunity with this acquisition to bring new consumers into the wine category."
The sale is subject to regulatory approval and its closing planned for Constellation’s first 2020 fiscal quarter.