March 8, 2007 — -- Ernest Gallo, who died this week at age 97, may never have fully lost his identification with cheap wines and kitschy commercials on television, but today he is being praised for having largely built the modern American wine industry.
With $5,900 -- most of it borrowed -- Gallo and his brother, Julio, built an empire, E.& J. Gallo Winery, that Forbes magazine said had sales of almost $1 billion in 2005.
That year Gallo sold 25 percent of the wines consumed in the United States and exported wine to more than 80 countries.
"Ernest and Julio built their company from scratch. They helped build an industry, and they helped build demand for wine few could have ever imagined," said Robert Koch, president of the Wine Institute.
Today the company is still family owned with 4,600 employees.
Gallo, the businessman, and Julio, the winemaker, got their first experience on a farm in the California central valley town of Modesto in the late 1920s during Prohibition.
The family grew grapes, which were shipped east for the home winemaking, permitted during Prohibition. As Prohibition neared its end in 1933, the brothers, Ernest only 24, decided to make the wine themselves.
Although Gallo's father and uncle ran a wine business, and his mother's family successfully made wine, the Gallo brothers always said they knew nothing about how to make wine. They found, the legend went, an old winemaking pamphlet in the basement of the Modesto Public Library. With that little knowledge, and the borrowed money, they said they began making wine.
The Gallo brothers found themselves competing with nearly 800 other winemakers, most of whom had pre-Prohibition experience. In his autobiography, Gallo said the two brothers succeeded despite the fact they could afford only one tractor.
"I drove it for 12 hours," Gallo said, "and then I turned it over to my brother [Julio] who drove it for the next 12."
In that first year, they produced 177,000 gallons of wine. Today, Gallo produces an estimated 2.6 million bottles of wine every day.
The Wine Institute credits the Gallo brothers with introducing modern winemaking techniques, merchandising, product display and advertising over the next two decades. While sales grew steadily, Gallo remained smaller and under pressure from such giants as Italian Swiss Colony.
Then, in 1957, Gallo introduced Thunderbird, a fortified cheap white wine with citrus flavor added, and sales rocketed into the stratosphere. But Thunderbird -- pushed by a radio commercial with the tag line "What's the word? Thunderbird!" -- was aimed squarely at a downscale market that didn't last. And the Gallo brothers saw tastes in the United States moving upscale, away from cheap table wines and fortified cheapies like Thunderbird.
In the 1970s Gallo began pushing a better product backed with extensive television advertising. One featured a corpulent and dramatic Orson Welles declaring of Gallo Winery: "We will sell no wine before its time."
Over the next two decades the Gallo brothers acquired foreign labels from Europe and Australia, and bought boutique wineries in the United States. Gallo now manages 10,000 acres of vineyards, though it still buys grapes from hundreds of independent producers. Julio died in 1993.
After the rise of American tastes, the Gallo portfolio now includes U.S. wineries Frei Bros., Rancho Zabaco and MacMurray Ranch (founded by actor Fred MacMurray). It is also aggressively marketing a premium wine, Gallo Sonoma.
Even at the end of his life, Gallo still exercised his marketing touch.
One recent acquisition was an Italian vineyard producing Chianti. It was sold as Leonardo in Italy, but introduced in the United States as DaVinci, capitalizing on the new hit book "The DaVinci Code."