Lars von Kantzow – President and CEO of Nomacorc and Stephanie Gallo, vice president of marketing, E. & J. Gallo.
E. & J. Gallo is the largest family-owned winery in the world, with annual sales topping 85 million cases. But Gallo’s vice president of marketing Stephanie Gallo recently made a confession to a roomful of industry experts at April’s Nomacorc Exchange: “We believe we’ve actually failed.”
Failed? Since its founding in 1933, Gallo has grown into a flourishing 70 brands, including nearly a dozen imports. The company’s exports account for 63% of all California wine sold worldwide, and acquisitions and new product introductions have earned the company a reputation as one the wine industry’s most dynamic innovators.
Yes, failed, said Stephanie—“failed to live up to the founders’ vision to democratize wholesale Minnesota Vikings jerseys wine, and failed to transform our spirits and beer-drinking nation into a wine-drinking culture.”
Granted, that’s a tall order. Only a third of Americans drink wine on a regular basis, and consumption of soda, beer, and coffee outpaces wine by large margins. Plus, wine is often viewed as an exclusive beverage, even elitist. “Seven out of ten Americans don’t drink wine. It’s pretty sobering,” she deadpanned, to laughter from the crowd.
But that is beginning to change. Wine sales in the U.S. are growing at 4% per year, thanks in part to shifting consumer attitudes. Wine’s more visible in pop culture now—in movies, on T.V., and in lifestyle media. Every major retailer, from Kroger to Starbucks to Walmart, is looking at getting into wine sales.
And Millennials have entered the scene. “Fifteen thousand people turn 21 every day,” Stephanie recited, and these young people bring fewer preconceptions to the category. They don’t view wine as formal, stuffy, elitist, a beverage only for le bon ton. Millennials have fewer preconceptions about wine and are more willing to experiment. Sweet, fizzy, or flavorized? No problem. Pour me a taste.
E. & J. Gallo Response is riding these trends using a two-part strategy: bring new customers into the wine category, and expand the category by getting existing customers to drink more wine. Sixty percent of Gallo’s current volume is attributable to these efforts toward recruitment cheap NFL jerseys and brand extension.
Take Apothic Red. In 2010 Gallo introduced this blend of Zinfandel, Syrah, Cabernet Sauvignon, and Merlot. It’s a glossy red, ripe with intense fruit flavors and 16 grams of residual sugar. It was a red wine designed for consumers who, well—don’t like red wine.
“There are many wine drinkers who simply don’t drink red wine at all, because they just can’t get on with the bitterness and astringency of the tannins,” observed wine reviewer Jamie Goode when he first cheap jerseys tasted Apothic, “This could act as a bridge wine for non-red-wine drinkers.”
Indeed it did. Apothic’s 850,000-case inaugural vintage sold briskly. But the wine wasn’t just appealing to new wine drinkers. It was marketed differently from the get-go—more like a consumer packaged good and less like an elite beverage. Gallo soon realized that Apothic’s edgy, Goth-inspired label design appealed especially to Millennials—“which at launch was a little scary,” reflected Courtney O’Brien, a marketing lead for the brand. Blog “Most wine drinkers are over 45, and in 2010 it was not a no-brainer that Millennials could drive the category.” (How quickly things change.)
Taking a cue from Apothic’s success, Gallo has also extended their successful Barefoot brand by adding a sparkling lineup, wines meant to be attractive to newer wine drinkers more accustomed to soda than champagne. Barefoot Bubbly is sold in flavors like Berry Fusion, Tropical Fusion, and Citrus Fusion.
Now Barefoot Refresh, launched in 2013, is taking aim at casual, daytime occasions when customers might naturally reach instead for beer or soft drinks. Barefoot’s Crisp Red, Crisp White, Summer Red, Perfectly Pink, and Sweet White are marketed for picnics or poolside, at a $7.99 retail price. All the labels say, “Serve over ice.”
Will all these new customers move up the line eventually? “Who cares?” said Stephanie. “This is probably not a popular view, but if they want to drink sweet wines, let them drink sweet wines. As long as they’re drinking wine, and not soda or beer or cider, it doesn’t matter. For Flash(y) so long as an industry we looked down on 1. White Zinfandel consumers, but White Zinfandel customers are so loyal—and they don’t apologize. To them it is wine.”