No. 2 winery thinking small

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Canandaigua Wine Co., the nation's No. 2 winery, is launching the first volley of campaigns for small and regional brands in a move to win market share.

Canandaigua in September issues will break magazine campaigns for three brands: Columbia Winery, Covey Run and Dunnewood. Each will be supported by ads in the Wine Spectator and Wine Enthusiast magazines. Others will get some support in travel and other magazines as well as on radio.

Grant, Scott & Hurley, San Francisco, is the agency. Initial budget for each of the three wines will be no more than $1 million.

The push is an effort to gain share by tapping the potential of smaller acquired brands, said Mike Jaeger, group president of the California table wine division. "As opposed to developing new brands, we have elected to have representation in that category through acquisition," he said. In all, Mr. Jaeger's division has a roster of 28 small and regional brands that it hopes to grow.

Owning the wine brands isn't the only marketing advantage, said Eileen Fredrikson, partner, Gomberg Fredrikson & Associates, a San Francisco wine consultancy. "With each strategic purchase, they acquire another network of distributors," she said.

The success of Kendall-Jackson wines had led a number of wineries to try to develop new national wine brands from scratch. Some succeeded, such as the No. 1 vintner E. & J. Gallo Winery's Turning Leaf, but others, such as Canandaigua's Mystic Cliffs brand, have stalled.

Gallo has 23% of the U.S. wine market by volume and Canandaigua has 15%, according to industry publication Impact's U.S. Wine Study. Canandaigua is part of Constellation Brands, which also markets and distributes beer and distilled spirits.

Frank Walters, VP-director of research of Impact, said a major marketing challenge for the wine business involves "a key variable nobody seems to address." He notes 19% of U.S. wine consumption is in California, which faces severe energy and economic issues that could hurt sales.

The Wine Marketing Council, among others, however, is moving to continue a national push to increase wine sales. The trade group is considering a $6 million-plus ad push as soon as the first quarter of next year to bolster sales, said John Gillespie, president. Its agency is True North Communications' Bozell Group, Chicago.

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