Gallo: Tradition, Family & Wine

by Nan McCreary

If you know anything about wine – and even if you don’t – you probably know the names Ernest and Julio Gallo. The two brothers, sons of Italian immigrants, are legendary in California wine history. They started their own winery in 1933 and, guided by big dreams for the future, a tireless work ethic and a spirt of innovation, built a family legacy that spans 87 years and four generations. Today, E. & J. Gallo Winery is the largest winery in the world.

What is now a wine powerhouse worldwide had very humble beginnings. The two brothers started the winery in Modesto, California in 1933, following the repeal of Prohibition. With $6,000 in working capital ($5,000 borrowed from Ernest’s mother-in-law), the brothers knew little about commercial winemaking. What they did know they learned by reading old, pre-Prohibition pamphlets published by the University of California which they retrieved from the basement of the Modesto Public Library. But they were quick studies, and they were determined. When they started the business, according to the story, Ernest’s goal was to sell more wine than Julio could make, and Julio’s was to make more wine than Ernest could sell. Statistics are not available on how much wine they produced that first year, but they did sell 177,847 gallons of wine, or nearly 3,000 cases of 750 ml bottles. The second year they sold 440,000 gallons, or close to 7,400 cases.

From the beginning, the brothers created a synergy that fit their natural inclinations: Julio was the grape grower and Ernest handled marketing and sales. In the early years, they produced inexpensive bulk wines, bringing wine to the masses, and putting California on the wine

map. Brands like Thunderbird, Ripple and Boone’s Farm were wildly popular and, while often referred to as “street wine,” they hit the market just as Americans were beginning to enjoy wine. Actually, many who enjoy premium wines today learned to appreciate wine on these brands.

With their innovative spirit, the Gallo brothers blazed an entrepreneurial trail that would shape the future of American wines. From the get-go, they understood the importance of protecting the land, and set aside one acre of property for wildlife habitat for every acre of vineyard planted. To this day, E. & J. Gallo is an industry leader in sustainability. In 1939, the brothers acquired bottling plants and began marketing wine under its own name, which increased business substantially. In the 1940s, they purchased 2,000 acres of land in Livingston, where they conducted research and experimentation that covered all aspects of viticulture. In 1946, they registered the Gallo trademark in most states. Julio, the winemaker, continually pursued his quest for quality and consistency. He was a genius at finding excellent vineyards and, while his wines were not yet premium wines, in the ‘50s and ‘60s the company was buying some of the state’s best fruit, including grapes from Napa Valley. At the same time, Ernest concentrated on marketing and distribution, developing modern techniques of merchandising that included creating a dedicated sales force and later launching television advertising campaigns. One of his TV ads earned recognition as one of the best TV commercials ever made. Between 1948 and 1955 alone, the winery’s sales nearly quadrupled, from four million gallons a year to 14 million.

As Americans began to consume more table wine, Gallo expanded its operations. In 1954, the brothers purchased the Cribari Winery in Fresno, and in 1958 established Gallo Glass Company, which today operates the largest single glass plant in North America. They continued to develop production techniques to provide high quality wine at lower prices than the competition, implementing skilled marketing strategies to convince wholesalers and retailers to proudly push Gallo wines. They were so successful in these endeavors that industry experts unanimously praised them for “bringing new wine drinkers into the fold.”

By the 1960s, Gallo was recognized as the largest winery in the U.S. based on sales volume. In 1966 they introduced their first sparkling wines, Eden Roc and André Champagne, which went on to become the largest

selling sparkling wine in the U.S. In 1974, Gallo began producing varietal wines, and in the early 1980s the brothers released their first vintage wine, a 1978 Sonoma Cabernet Sauvignon. It was during this time that Julio Gallo developed a quality drive initiative that encouraged grape grows to sign long-term contracts guaranteeing a fair price for their harvest if they would replace existing grapes with grape varieties of Gallo’s choice. The initiative was extremely successful: more than 100 growers signed contracts, ensuring an ample supply of classic grapes such as Chardonnay, Cabernet Sauvignon and Sauvignon Blanc.

Knowing what consumers wanted was one key to the Gallo brothers’ success and, when Americans began to prefer better wine in the 1980s, they were ready to meet the challenge and began producing premium-quality wines. They also expanded their operations into international markets. The storage capacity at the Gallo Winery in Modesto grew from 100 million gallons in 1965 to 330 million gallons in 1986.

In the 1990s, the brothers launched Gallo of Sonoma, a collection of eight vineyards in Sonoma County. Wines from these vineyards were crafted by third generation family members; winemaker Gina Gallo and vineyard manager Matt Gallo. The firm also introduced Gallo Estate Wines, the winery’s first offering in the super-premium category, and Ecco Domani, the first foreign-based brand developed and imported by the winery. They also bought the historic MacMurray Ranch from the family of famed actor Fred MacMurray. In 1999, Gallo was named Winery of the Century by the LA County Fair’s Wine of the America’s competition.

Ernest and Julio Gallo headed the winery they founded into their 80s. By the early 1990s the winery’s leadership had finally passed on to the second generation. Julio died in 1993 at the age of 83 in a tragic automobile accident, and Ernest passed in 2007, six days shy of his 98th birthday. But, as a family-owned winery, their children, grandchildren and great grandchildren are carrying on the legacy and honoring the traditions established by the founders.

Today, the next generation is taking E. & J. Gallo to the next level, and they’re doing it with gusto. In the 2000s, the company began a winery buying spree that now includes 100 brands, including table and sparkling wines, beverage products, dessert wines and distilled spirits. The company is the largest exporter of California wine, and imports wines from Argentina, France, Italy, New Zealand and Spain. E. & J. Gallo owns fifteen wineries strategically located in wine regions throughout California and Washington and over 23,000 acres of vineyards across the state of California. In addition, Gallo maintains contracts with growers around the state that assist with yearly supply.

Gallo’s current production is a far cry from the small number that Ernest and Julio produced the first year they opened their winery. The Gallo Creed, an internal document produced in the 1960s, has a line still used as a rallying cry for the company today … “to endeavor to win new friends for wine.” And they do that every day!