Benziger Family Winery sold to Wine Group

The Wine Group, one of the world's largest producers of budget wines, is buying the pioneering Glen Ellen winery for an estimated $100 million as it looks to expand to more upscale products.|

Benziger Family Winery, founded more than 30 years ago by a pioneering Sonoma Valley wine family who helped bring green farming practices into the mainstream, is being sold to one of the world’s largest producers of low-priced wines.

The Wine Group, the world’s third-largest wine company with such budget brands as Franzia, Almaden and Corbett Canyon, announced Monday it has purchased the winery in Glen Ellen and its nearby sister winery, Imagery.

Financial terms were not disclosed, though industry estimates ranged from less than $90 million to slightly more than $100 million.

It is the second blockbuster deal in two decades for the Benziger family, which built its first wine brand, Glen Ellen, into the largest wine label in Sonoma County before selling it in 1993 to Heublein for an estimated ?$80 million.

Mike Benziger, founder and chief executive officer of his family winery, said The Wine Group will continue the green farming tradition that has been the calling card of the winery he founded with his late father in 1980.

“They are very energetic and good people … it was almost like selling back to ourselves,” Benziger said in an interview Monday. “Their mission is to bring the company more upscale.”

The Wine Group at first glance doesn’t appear to be a natural fit for Benziger, which produces 139,000 cases of wine annually, according to the Gomberg-Fredrikson Report, with prices that can go as high as $80 per bottle on its website. The Wine Group produces almost 60 million cases of wine a year, much of it sold in 3- and 5-liter boxes.

But the purchase is a signal that the privately-held Livermore company looks to expand into the more profitable market for premium and super-premium wines that is a hallmark of the North Coast wine industry. Its Cupcake brand, launched in 2008, quickly became one of the fastest-growing premium wine brands in the country, selling more than 3 million cases annually.

“As we continue to move into the super-premium category, we have been thoughtful in our search for a winery that produces exceptional wines while sharing our values of integrity, social responsibility, and innovation. The Benziger family is not only celebrated for its outstanding wine quality, but their strong team will be a great cultural fit within The Wine Group,” CEO Brian Vos said in a statement.

The sale is the latest sign of consolidation in the North Coast industry among major players, following on the heels of E&J Gallo Winery’s purchase of Healdsburg-based J Vineyards & Winery in March.

“The mergers and acquisitions markets do not seem to be slowing in the wine business. If anything, the continued low interest rate environment and large amount of capital out there looking for a return is only pushing M&A deeper than most people would have predicted at the start of the year,” Rob McMillan, executive vice president of Silicon Valley Bank’s Wine Division, said in an email.

The purchase includes the Benziger Family Winery and its 85-acre estate adjacent to Jack London State Park. The winery has become a significant tourist attraction in Sonoma Valley, taking visitors on tours through its vineyards on trams. The Wine Group will also acquire the family’s Imagery Winery and its tasting room on Highway 12, two miles east of Benziger.

As part of the sale, the 63-year-old Benziger will leave the company as he stabilizes from recent health issues, which he did not specify.

While some of his six siblings were active in the winery, he noted that others are interested in different pursuits. After Christmas, Benziger said he started the sale process that attracted The Wine Group and other suitors he would not name. “It wasn’t a one-horse deal,” he said.

“We had an opportunity for some family members to move on,” he said. “Other partners who are younger and they wanted to stay in the business.”

The family had two major missions in the sale, outside the price. First, the buyer would continue the green farming practices it is noted for, specifically biodynamic farming, a type of organic farming that strives for the farm’s ecosystem to be balanced, self-sustaining and healing.

They also wanted to ensure the winery’s employees would keep their jobs. The Wine Group delivered on the promises, as Mike Benziger and Tim Wallace, winery president, are the only two who are leaving. The winery’s 70 full-time employees have been offered jobs with the new company, Benziger said.

“Not everyone got perfectly what they wanted,” Benziger said. “But everyone’s in good shape.”

Mark Burningham, who has worked with the Benziger family for almost 30 years, most recently as vice president of winemaking, will take over as general manager of North Coast operations for The Wine Group.

Two of Mike Benziger’s brothers will remain with the company. Chris Benziger will be vice president of trade relations at Benziger Family Winery, and Joe Benziger will continue in his position as Imagery winemaker.

Mike Benziger said he didn’t know what will be next for him, but he will enjoy spending more time with his three adult children, including watching his youngest son, who is a musician, play later this week in Los Angeles. On Monday, the day the deal was finalized, he rode to the top of Sonoma Mountain at 6 a.m.

“I don’t know how this will play out for me,” he said of his next career path. “But I will always be a farmer.”

You can reach Staff Writer Bill Swindell at 521-5223 or bill.swindell@press? On Twitter @BillSwindell.

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