With over 1,500 wineries in the United States alone, out of those 1,500 wineries approximately 800 of them are located in California. We can say that California is the leading wine producer in the states today exporting about 90 percent of all wine exported by the United States. Mondavi has had an extreme on the export that we see today because it competes in both domestic and international markets. .
The Domestic competitors being Kendal-Jackson, Sebastian Vineyards, Gallo, Beringer, and etc to name just a few. Although larger producers such as the competitors of Mondavi had an advantage in capital resources, smaller wineries (early years of Mondavi) were making their mark, gaining more notoriety as more people found out about their product. Competition was based between two types of wines, they were: 1. Premium wines and 2. Super premium. Premium wine market was mostly driven retail shelf space, brand image, and price, these types of wines were made in large quantities and distributed through different types of retail channels. .
The international competition was mainly coming from countries such as France, Spain, Italy, Australia, Chile, and Argentina. Australia and Chile were newcomers to the wine industry were doing very well exporting 40 & 80 percent of total production to the states. France, Spain, and Italy exported approximately 25 percent of all wine they produced to the United States. .
Entering into the wine industry can be very difficult and challenging, the reason why is that there are barriers to entry. These barriers are cost, brand reference, customer loyalty, resources, and government regulations. For Cost and Resource barriers, not like other wine makers trying to get into the industry Mondavi had these two aspects to their advantage. Mondavi's advantages were partnerships with to sellers of grapes, they had existing distribution networks, production facilities, and they had good locations.