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Getting Better with Time: E&J Gallo Winery Takes Off

Article Overview: It was 1933. Prohibition was coming to an end in the U.S. and Gallo wanted to be ready to go when it finally did. Together, he and his brother launched E&J Gallo Winery. With Julio in charge of the vineyard, Gallo went to work looking after the winery’s sales operations. His strategy from the get-go was to market cheap, fortified wines to inner city markets. With 20 percent alcohol content, Gallo wines such as White Port and Thunderbird were first introduced to consumers.

Getting Better with Time: E&J Gallo Winery Takes Off

It was 1933. Prohibition was coming to an end in the U.S. and Gallo wanted to be ready to go when it finally did. Together, he and his brother launched E&J Gallo Winery. With Julio in charge of the vineyard, Gallo went to work looking after the winery’s sales operations. His strategy from the get-go was to market cheap, fortified wines to inner city markets. With 20 percent alcohol content, Gallo wines such as White Port and Thunderbird were first introduced to consumers.

In little time, Thunderbird became one of Gallo’s most popular products. A radio jingle for the wine quickly became a hit: “What's the word? /Thunderbird/ How's it sold?/ Good and cold/What's the jive?/ Bird's alive/ What's the price?/ Thirty twice.” In one of Gallo’s proudest moments, he recalled driving through a tough, inner city neighbourhood and rolling down his window to talk to a man on the street. “What’s the word?” he yelled out. “Thunderbird,” came the answer.

Gallo drove his employees hard and demanded much from them, but not more than he ever asked of himself. Often working 16-hour days and traveling across the country on sales missions by car, Gallo once had to be hospitalized for six months due to exhaustion.

Shortly after starting up, the Gallo brothers were already selling three million gallons of wine a year. Gallo’s natural talent for sales helped push their product onto a broad national market. Despite its early focus on producing cheap wines, the company eventually began to shift upscale.

The Winery soon began releasing vintage wines. Many critics who had previously labeled Gallo as nothing more than a mass-producer of bland wines were soon won over with its newest labels. Its non-vintage Cabernet and Chardonnay, priced at just $5 a bottle, were also winning over converts. Indeed, Gallo was quickly building a reputation as something of a wine connoisseur.

In the 1980s, wine sales throughout the U.S. began to stagnate. Instead of losing momentum, Gallo looked elsewhere for opportunities. He found them in Europe, particularly in the British market. In four years, Gallo spent more money on marketing in Europe than all the other wine firms of the world combined. The costly strategy worked, and soon Gallo had built himself a global brand.

In 1993, his brother, Julio, died in a car crash. Despite the loss, Gallo continued to push hard to make his wines the most popular in the world. Eventually, Gallo would come to dominate the U.S. wine industry. In fact, until 2003, when one of its competitors expanded through a merger, Gallo was the largest producer of wines anywhere in the world.

Gallo died on March 6, 2007 at the age of 97. He worked at the company he founded until his very last days. Today, his collection of wineries and labels, all of which are privately owned, employs more than 4,600 workers, sells wine in over 90 countries, and earns revenues in excess of $2.8 billion.

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Article Tags: better with time, brother, offit, prohibition



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