She's done cookware, linens, a magazine ... time ... but Martha Stewart, domestic goddess, is now foraying into the world of adult beverages. Early next year, wine connoisseurs willing to plop down $15 a pop will be able to ease open a bottle of what's currently being called Martha Stewart Vintage. The vintage, produced and distributed by E&J Gallo Winery, will use grapes grown primarily in Sonoma County, California, and will come in three varietals -- chardonnay, cabernet sauvignon, and merlot. Still on the drawing board is a possible rose version.In its first year, the Martha Stewart Vintage will be in limited release, with just 15,000 cases being shipped to a small number of cities. Boston, Phoenix, Charlotte, and other cities where Ms. Stewart is especially popular will be among the locations lucky enough to stock the new wine.
While time will tell how successful this new vintage will be, Ms. Stewart is definitely hopping aboard the vino bandwagon at the right time. The availability of low-priced wine such as Charles Shaw (aka "Two Buck Chuck") has cultivated interest in the wine business in general, introducing the practice of wine appreciation to a broader demographic. While the $15 Martha Stewart Vintage doesn't exactly cater to the Two-Buck-Chuck crowd, it may benefit from the expected volume growth rate of 11% over the next 5 years.
But Martha's massive empire overall may not see a noticeable benefit from this new undertaking, no matter how successful. The wine venture is not expected to have a material impact on the fortunes of Martha Stewart Living Omnimedia's (NYSE: MSO).
Beth Gaston Moon is an analyst at Schaeffer's Investment Research.
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