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Ernest Gallo: 1909-2007

Pioneer brought wine to the masses

March 07, 2007|Claudia Luther and Jerry Hirsch | Special to The Times

Ernest Gallo, who with his brother Julio created a post-Prohibition wine business that became one of the most dominant in the world and changed the American palate, has died. He was 97.

Gallo died Tuesday at his home in Modesto, E. & J. Gallo Winery announced. A cause of death was not given.

Ernest was the older of the Gallos who, in 1933, launched the low-end winery in Modesto -- far from the state's premier wine-producing areas to the north.

In 2006, E. & J. Gallo shipped an estimated 70 million cases of California wine, and estimates are that Gallo has been producing about a quarter of all wine and wine-related products sold in the United States.

In all, Gallo owns thousands of acres of vineyards from Modesto to Napa and Sonoma counties and a network of wineries, anchored by the world's largest in Livingston, south of Modesto.

"No one worked harder to build the base of American wine drinkers that we have today," Joseph Ciatti, owner of the nation's largest grape and bulk wine broker, said Tuesday. "Ernest made quality wine for the masses at a good price."

Starting with such everyday wines as Hearty Burgundy and Carlo Rossi and specialty and fortified beverages such as Night Train Express, Thunderbird and Ripple, Gallo evolved into a worldwide purveyor of fine wine. Its current brands include Louis M. Martini, Mirassou, Rancho Zabaco, MacMurray Ranch and Gallo Family Vineyards.

In more recent years, the company has expanded its dominance by striking agreements with wine producers in France, Italy, Australia and New Zealand.

Gallo "put California on the wine map of the United States and then, through exporting, put California on the wine map of the world," said Nat DiBuduo, president of Fresno-based Allied Grape Growers, the state's largest wine-grape-growing cooperative.

Ernest, who was the power behind the company, handled the marketing and business end, while Julio, who was sometimes called the farmer at Gallo, oversaw winemaking.

When the Gallo brothers started the business, the joke was that Ernest's goal was to sell more wine than Julio could make, and Julio's was to make more wine than Ernest could sell.

With that philosophy and hard-nosed business practices, the Gallo brothers over the years created a company -- now one of the largest privately owned businesses in the country -- that made them and their progeny immensely wealthy. In September, Ernest Gallo and family ranked No. 297 on the Forbes 400 list of the richest Americans, worth $1.3 billion.

The company has grown to more than 4,600 employees, with products sold throughout the United States and in more than 90 other countries. Ernest turned over day-to-day operations years ago, and his son Joseph now serves as chief executive.

Julio Gallo, who was a year younger than Ernest, died in a 1993 car accident. Their younger brother, Joseph, died last month at 87.

From the beginning, Ernest Gallo's idea was to use technology and modern manufacturing methods to increase the production, quality and distribution of wine. The company initially sold its wine in bulk to bottlers to be sold under their own labels.

The firm built massive concrete storage tanks and used assembly-line methods to get the wine into bottles, which eventually took on the Gallo brand name. Gallo also acquired a bottle-making plant and a trucking company and made its own labels, becoming a "vertical" company dependent almost solely upon itself.

"We do not like to answer to anyone for our mistakes," Ernest Gallo once explained.

A compact man with large brown eyes, he had a reputation within the company for being difficult and demanding. But Walter Bregman, vice president of marketing for Gallo from 1974 to 1979, said Ernest was tough because "his name was on the door."

While it was true that Gallo "suffered fools badly and didn't much care for lackeys, toadies and lickspittles," Bregman said, he was also a straightforward businessman who didn't play political games and whose goal was simple: "to sell the most wine at the best quality."

Gallo put a tremendous amount of time into the business and demanded the same from others, said winemaker Richard Peterson, who worked as a biochemist for the company from 1958 to 1968.

"He would have the marketing people out on a trip visiting accounts and stores, and then he would tell them he expected to see them the next morning at 8 a.m., even if that meant working on a Sunday," Peterson said.

"But you just can't overstate Gallo's importance to wine in America. This was in the 1950s and early 1960s, when the industry wasn't doing much of anything," he said. "But Ernest was very focused and really grew the business."

The brothers sought ways to make wine more inviting to American consumers, eschewing its elitist image.

The brothers thought the industry was trumped by beer when Prohibition was repealed in 1933. While breweries marketed their products as everyday beverages, the reestablished California wine industry sold its drink for special occasions.

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