French company Pernod Ricard, one of the largest spirits conglomerates in the world, just announced its plans to sell off the bulk of its wine portfolio. The news comes barely a month after Gallo’s acquisition of two of Napa’s premier wineries — Rombauer Vineyards and Massican — leaving industry heads wondering what’s behind these major moves in the wine world.
Since high-end liquor drinkers and fine-wine drinkers are not one and the same, the Pernod Ricard situation may not come as the biggest surprise. Premium spirits, on one hand, tend to have a fair amount of room to scale up production without compromising quality, while fine wine on the other, tends to not enjoy this same freedom due to the naturally scarce nature of its ingredients. Of course, exceptions exist, like Champagne and rosé, but both markets are dominated by brands owned by LVMH, leaving little room for other labels to succeed. And let’s face it: Château Lafite Rothschild just doesn’t have the same mass appeal to non-aficionados as a bottle of Dom Pérignon.
On this episode of the “VinePair Podcast,” Adam, Joanna, and Zach explore what might be at play in this sector of the industry, from a changing notion about what wines can succeed as premium products to the simple fact that spirits-focused companies may no longer see wine as a growth category. Tune in for more.