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Constellation, in effort to cut costs, unloading Almaden, Inglenook to The Wine Group

The world's largest wine company is selling two California jug wine brands to reduce debt and focus on higher-end wines like those in the Beam Wine Estates group it purchased in December.

Constellation Brands Inc. is selling its Almaden and Inglenook wine brands and the Paul Masson winery in Madera to The Wine Group for $134 million.

Though relegated to the lower shelves in supermarket wine aisles today, the brands have deep roots in the California wine industry and played key roles in increasing wine's popularity among Americans.

"These are brands from yesterday that enabled the company to gain a foothold in the wine market, but they don't fit their strategy anymore," said Jon Fredrikson, of wine industry consulting firm Gomberg Fredrikson & Associates.

Both brands have histories that reach back to the earliest years of California's wine industry. Almaden was founded in 1852 when Frenchman Etienne The?planted grapes near Los Gatos, while Inglenook rose to prominence after fur-trading sea captain Gustave Niebaum purchased the Inglenook vineyard in Napa Valley in 1879.

When Constellation acquired the brands in 1994 from the Heublein Corp., the mass market growth both enjoyed in the 1960s and 1970s had slowed as more Americans traded their Chablis wines for increasingly popular varietal wines.

As that trend has accelerated, Constellation has shifted its focus to higher-end wines with purchases such as Ravenswood, Estancia, Robert Mondavi Corp., and in December, the Healdsburg-based wine division of Fortune Brands.

"This transaction, when coupled with the recent acquisition of Clos du Bois, the Number 1 super-premium U.S. wine brand, will allow our wine sales forces to focus on selling higher-growth, higher-margin premium wines," said Rob Sands, chief executive officer of the Fairport, N.Y. company.

While no longer as profitable as they once were, Almaden and Inglenook have remained a force in the industry by virtue of their sheer volume. Combined they account for 10 million cases of production, much of it in boxes and selling for the equivalent of less than $3 per 750 ml bottle.

Almaden's last new wine, launched in 2004, was something called "mango flavor blush sangria."


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