The process used for producing the additive is proprietary. Based on the descriptions of effects to wines by winemakers it is likely produced by a series of processes such as vacuum distillation, fractional distillation and solvent extraction.
The product is one of a series of concentrates marketed as Kosher additives for food with names such as Mega "Cherry Shade" Grape Juice Concentrate, Mega Purple Grape Juice Concentrate, Mega Red Grape Juice Concentrate 
"Mega Purple is one of the more notorious additives. Anil Shrikhande, vice president of research and development for Constellation Wines, which manufactures it, says Mega Purple is 100% grape juice concentrate from grape varieties known as Rudy Red, Central Valley and Royalty. Although it is intensely sweet, it is used primarily to add color. It comes in white, pink, red and purple."
There has been some discussion in the industry regarding the use of additives such as Mega Purple to bolster or enhance sensory attributes such as color, taste and mouth feel. It is reported that as much as 20% of the total production of such additives is related to wines. According to journal reports, Mega purple is used by almost every low to moderate value wine producer (below $20US) to help standardize the bottled product ensuring a more uniform product. 
Mega purple has raised some controversy within the wine consuming community as it's use is considered to be akin to adulterating a wine. Others feel that the need for use is evidence of poor viticulture and or winemaking.