Gallo going strong It's one of the world's largest wineries - and getting bigger
Ask Joseph E. Gallo how his family winery became one of the world's largest, and he instantly credits luck. But give him a few minutes, and he'll go on to explain how generations of hard work, meticulous planning and insistence on excellence fostered success.
“We had certain principles that we've always been guided by. One is to stay independent and be master of our own destiny. Run the company conservatively. Don't take on too much risk. ... Invest in innovation ... and be very attuned to what the customer wants,” said Gallo, son of co-founder Ernest Gallo and now E.&J. Gallo Winery's president and chief executive officer.
Bob Gallo, co-founder Julio Gallo's son, and Jim Coleman, Julio's son-in-law, are co-chairmen of the privately held company's board of directors, putting the family's second generation firmly in control.
Members of its third generation - often called G-3 - occupy key roles. Fifteen members of the family work for Gallo, including a couple from the fourth generation.
The story of how Ernest and Julio Gallo founded their winery has been told often. But the inside story rarely revealed is how the brothers - and their children and grandchildren - expanded the family business to more than $2 billion in annual sales.
“You have to remain relevant,” stressed Joe Gallo, 65. A company must “have an ability to spot opportunities. It's almost like an art form. They come along every day, and it's amazing how the best of people don't see it. But they're there every day.”
For 75 years, the winery has capitalized on opportunities and repeatedly reinvented itself - and the wines it produces.
That will continue, Gallo assured. He revealed company plans to expand into hard liquor like tequila, push wine sales into China and reintroduce an old favorite (sangria).
The winery sold more than 70 million cases last year, and Gallo said the company is “growing at a pretty healthy rate.”
Evolution of a company
Its beginnings were much more humble. Starting with borrowed money in August 1933, the founders rented a warehouse near downtown Modesto.
The company started with dessert wines - port, sherries and muscatel - then introduced specialty brands like Thunderbird, Boone's Farm and Ripple.
“Up to 1974, we did not make varietal wines,” explained Gallo, who joined the company full time in 1965. “We didn't even have chardonnay, cabernet or merlot or sauvignon blanc grapes planted. So we came out with secondary varietals like barbera, chenin blanc and French colombard, which was really a stop-gap measure. Then we quickly started planting the real varietals people wanted, and the market moved in that direction.”
“We're starting to make an effort into China. We think there's terrific potential over there,” said Gallo, who recently returned from China. “We would ship our cases over there and have people distribute it. That's our current plan.”
The Chinese, Gallo believes, “could become big wine drinkers because they seem to be very open-minded. They have some wine already (but they) want to adapt more to the Western styles.”
Wine isn't the only beverage Gallo has plans for.
The company recently went into the gin business and Gallo said it's “taking a serious look at tequila now.”
The company's focus, of course, will remain wine.
One to watch for is an old favorite, a Spanish-style wine called sangria. During the early 1970s, Gallo's Madria-Madria sangria was promoted with TV and print ads featuring Joe's wife, Ofelia, who was born in Nicaragua.
“We're going to reintroduce sangria in this country next year sometime,” Gallo said, but his wife won't advertise it. “She said I can't afford her anymore.”