Constellation adds Santa Barbara’s Sea Smoke to fine wine portfolio

Fortune 500 company Constellation Brands has purchased Pinot Noir and Chardonnay estate Sea Smoke, located in Santa Barbara County’s Sta. Rita Hills AVA, for an undisclosed sum.

The sale includes 445ha of land, 104 of which are under vine. A winery in nearby Lompoc is also included in the sale, along with the brand itself and its entire inventory.

According to Wine Spectator, where this story was first reported, former video game company owner Bob Davids founded Sea Smoke in 1998, having no previous experience in wine. In 2016 the estate was expanded with the purchase of the neighbouring Rita’s Crown Vineyard.

The purchase price for the biodynamically farmed estate was not disclosed in reporting of the sale.

Sam Glaetzer, EVP and president of the Wine & Spirits division at Constellation, said in a statement that the acquisition is the latest step in the company’s pursuit of growth “aligned with consumer-led premiumisation trends through our higher-end brands of the wine and spirits business”.

Sea Smoke’s addition to its fine wine portfolio follows a series of acquisitions by Constellation over the last few years. Following seven months of talks, Constellation Brands bought Domaine Curry for an undisclosed sum from Coup De Foudre in Napa Valley in June 2023.

Ayesha Curry, who is married to the NBA’s Golden State Warriors point guard Steph Curry, sold the Napa Valley wine business she co-owned with her sister-in-law to the publicly owned company.

Constellation’s shift from value-priced to premium brands also includes recent purchases of Napa’s Schrader Cellars, Booker Vineyard in Paso Robles and Oregon’s Lingua Franca.

The company, which is the largest beer import company in the US, is also pursuing a major renovation at Robert Mondavi Winery.

Glaetzer added: “Not only does Sea Smoke offer a uniquely acclaimed estate vineyard in the Sta. Rita Hills AVA, but its highly acclaimed wines also align with our target consumer preferences as they continue to shift to the higher end.”

Victor Gallegos, vice president, general manager and director of winemaking at Sea Smoke, said the acquisition would “help us grow and thrive in a highly competitive market”.

Gallegos, longtime winemaker Don Schroeder and vineyard manager Julian Malone will remain with the company in their current roles.

Constellation has forecast annual profits above Wall Street’s predictions as sales of its core beer brands remain buoyant despite the consumer pattern of downtrading and resistance to price rises. However, the company’s beer brands were to thank for the positive results, whereas its wine and spirits fared less well with quarterly sales falling by 6% as wholesalers trimmed orders for high-priced premium brands.

The company has predicted that the wine and spirits arm would improve its net sales performance this year.