Winemaker who brought grapes of wealth to California dies, aged 97
Founder turned a modest family brewing firm into world’s largest producer
Dan Glaister in Los Angeles
Thursday March 8, 2007
According to legend, Ernest and Julio Gallo started their first winery in 1933. Using a $5,000 (£2,500) loan from Ernest’s mother-in-law and Julio’s savings of $900.23, the two brothers rented a cement warehouse in their home town of Modesto, California, and began making wines. With the help of a recipe they found in some prohibition-era leaflets in the basement of Modesto library they made ordinary wines for the bargain price of 50 cents a gallon, half the going rate. In their first year in business, they made $30,000 and an empire was born.
More than 70 years later, the last of the founders of the company has died. Ernest Gallo, the eldest of three brothers, died on Tuesday, but he leaves behind a robust wine dynasty and an industry transformed. Gallo, which is still a family-owned and run business, possesses thousands of acres of vineyards in California, and employs 4,600 people. The family ranks at 297 on Forbes list of the richest Americans, with a fortune estimated at $1.3bn.
With his bullish energy Ernest Gallo helped to drive California to the forefront of the world’s wine industry. The state is now the fourth-largest wine producer in the world, producing 2.7 billion bottles in 2005 with a retail value of $17bn. It accounted for 95% of US wine exports in 2005, generating $672m in income. Last year, Gallo shipped an estimated 70m cases of wine, making it the largest wine company by volume in the world.
“The Gallos were certainly the driving force in the wine industry,” said Joseph Ciatti, who runs the biggest grape and wine broker in the US. “They had a huge impact, especially Ernest, because he set styles and trends for the industry.”
While Julio, who died in a car accident in 1993, oversaw the winemaking, Ernest was the marketing and business brain behind the operation.
It was Ernest who pushed the clear carafe resembling a urine sample jar into the British market. The carafe became synonymous with the company name, as did the Gallos themselves, familiar faces from the TV commercials for their wines, set in the rolling vineyards of central California.
But Ernest’s acumen went beyond TV commercials and novelty containers. He was the first to introduce point-of-sale items for wine shops, providing them with special Gallo wine racks; he dispatched teams of marketers across the state – slogan “By golly, buy Gallo” – to ensure his wines were properly displayed, with the labels facing outwards; and he ensured he could provide a quality wine for every price bracket.
“Ernest was a marketing genius,” said Mark Chandler, executive director of the Lodi-Woodbridge Winegrape Commission. “He put a lot of energy into the marketing and committed a lot of resources to the execution of the sale. The key to their success was having high quality products at a number of different price points.”
Gallo was instrumental in helping develop the palate of American consumers. When the Gallos started at the end of prohibition, wine was sold cheaply and in bulk or by the jug to farmers, most of them European immigrants.
The brothers’ grandfather, Battista, who grew up in Italy, owned a 20-acre vineyard in California. “His first and most loyal customers were Basque sheep herders from the surrounding hills,” Julio Gallo wrote in the brothers’ autobiography. “They came to town with their earthen jugs for him to fill for a nickel.”
The brothers’ father grew grapes in Modesto, selling them to home wine-makers, who were exempt from the controls of prohibition.
But tragedy struck when their father murdered their mother and then shot himself. A few months later, the brothers opened their winery, based on the understanding that Julio would make the wine and Ernest would sell it.
The company used assembly-line methods, built giant storage tanks and stainless steel rather than wooden vats, made its own labels, and had its own trucking company and bottle plant. So attached to the notion of branding was Ernest that Gallo even made its own wine glasses.
He was also bullish in his dealings with organised labour, and clashed with the United Farm Workers union, resulting on two occasions in a sustained boycott of Gallo products.
While modernising the production methods and the marketing of wine, the Gallos were at the forefront in changing the tastes of wine drinkers. Although they had built much of their empire on sales of Thunderbird, a fortified sweet wine that was aimed at poor, mainly African-American drinkers, the Gallos harboured ambitions to introduce American drinkers to more sophisticated wines.
In 1968 sales of table wine outstripped those of dessert wine for the first time, thanks largely to the brothers. Their brands, including Gypsy Rose, Carlo Rossi, Ripple and Boone’s Farm, became household names.
“In the mid-1960s people who weren’t used to drinking wine started to drink it with meals,” said Mr Ciatti. “The Gallos were there throughout that period, and their wines, such as the Hearty Burgundy, really had some wonderful grapes.”
But Gallo didn’t just use the grapes to educate the American palate. The company’s association with cheap tipples was eroded as corks replaced screw tops, and the company began to concentrate on varietals – wines made from a single named grape variety. It also bought up other vineyards and brands, including mid-price producers such as MacMurray Ranch – originally started by the Hollywood actor Fred MacMurray – Mirassou and Rancho Zabaco.
Now the challenge lies with Gallo’s heirs. Although he handed over the day-to-day running of the company to other family members some years ago, Ernest still went into the office every day until his death.
The family will now be looking to Ernest’s 24 grandchildren and great-grandchildren to develop the empire.
“The industry and the Gallo company will continue on a trend of producing wines of a place,” said Mr Chandler.
“I think consumers are paying more attention to where wine comes from. The Gallos will certainly provide the right product at the right price.”