E&J Gallo offloads two fortified wine brands

California wine giant E&J Gallo has sold two fortified wine brands to Seattle-based Precept Wine for an undisclosed sum.

Precept, which claims to be the largest privately-held wine producer in the Pacific Northwest, has acquired the fortified wine brands Sheffield Cellars and Fairbanks from Gallo.

It follows news of the completion of Gallo’s US$810 million deal with Constellation Brands, which sees it purchase over 30 wine brands priced at US$11 and below per bottle from Constellation. A separate $130 million deal, which includes New Zealand wine brand Nobilo and related assets, has also been granted official clearance.

Sheffield Cellars and Fairbanks are both brands launched by Gallo early in its history when founders and brothers Ernest and Julio Gallo recognised a need for domestic aperitif and fortified wines.

While production is expected to remain in California, in a statement, Precept said the wines will now be made under the guidance of Precept winemaker Hal Landvoigt.

Andrew Browne, founder and CEO of Precept, said: “I am thrilled to add these versatile wines to Precept’s growing portfolio and expand our footprint in the burgeoning dessert wine category. Our sales and marketing teams, along with our wholesale partners, are looking forward to building on the upward momentum of these great brands and categories.”

In the US, sales of dessert wine (which in the US is defined as any wine over 14% ABV) are up 15% by value and 10% by volume. According to data from Nielsen (52 weeks ending 26 December 2020), Fairbanks was the second largest dessert wine brand in the country.

The Fairbanks range includes Port (in 750mL, 1.5L, 3L formats), Sherry (750mL, 1.5L), Cream Sherry (750mL, 1.5L), White Port (1.5L) and Cocktail Pale Dry Sherry 1.5L. Sheffield Cellars’ portfolio includes expressions called Tawny Port (1.5L), Cream Sherry (1.5L), Very Dry Sherry (750mL, 1.5L) and Marsala (750mL, 1.5L).

CEO of E&J Gallo, Ernest J. Gallo, added: “We are glad to have found in Precept a buyer that will respect the history of the Sheffield Cellars and Fairbanks brands and will continue making these quality dessert wines for consumers to enjoy.”

Precept, which produces the sweet, flavoured wine Chocolate Shop and the recently released A.G. Perino Sweet and Dry Vermouths, said it is hoping to “grow and innovate in the sweet wine and dessert category”. Founded in 2003, it now owns almost 4,000 acres (1,619ha) of vines across Washington, Idaho, New Mexico and Oregon. Wine brands in its portfolio include Waterbrook, Gruet, Browne Family Vineyards, Canoe Ridge Vineyard, House Wine, Pendulum, Primarius, Washington Hills, Battle Creek Cellars, Callaway Cellars, Ste. Chapelle, Cense and AG Perino Vermouth.