APPRECIATION Ernest Gallo, wine's master salesman
Jon Bonné, Chronicle Wine Editor
Friday, March 9, 2007
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When David Kent worked for Ernest Gallo in the 1990s, he joined the Modesto wine mogul on a trip to Italy. Along a slippery patch of street, an employee offered Ernest his arm.
"Ernest refused it, as he always refused any kind of help," recalls Kent, now CEO of the Wine Group, the third-largest U.S. wine company. "His response was, 'Look, if you fall down, I don't want you taking me with you.' And that was Ernest."
It would have been a point of pride for Gallo that he could always make it on his own. Gallo, who died Tuesday at 97, was both loved and feared by a wine industry that adored the often generous support from the influential Gallo family, but scowled at its hardball tactics and secretive ways.
There was the endowed chair at UC Davis and the neuroscience research center at UC San Francisco. Then there were the rumblings about Ernest's relentless focus on the bottom line, a hot temper and an approach to business so coldhearted that he sued his younger brother, cheesemaker Joseph Gallo Jr., over the use of the family name.
But always, there was the tale of Ernest and his brother Julio's hard-fought climb to the top. They began in 1933 with $900.23 of Julio's savings and a $5,000 loan from Ernest's mother-in-law, Teresa Franzia. From those modest beginnings -- and driven by the devastating murder-suicide of their mother Susie and father Joe -- the pair turned their business into the largest winery in the world. E. & J. Gallo Winery is still responsible for nearly one of every four bottles of wine sold in the United States. "They built their company from the ground up, from scratch, and in turn were instrumental in building the American wine industry," says Robert Koch, president of the Wine Institute. "It's a wonderful American success story."
Ernest's work ethic was instilled early. At age 17, he was sent by his father to Chicago to sell a boxcar of grapes and returned with $17,000. It was his introduction to sales, the basis for his creation of a virtual army of Gallo salespeople that exercised its influence around the globe. His work ethic was forged by grueling 18-hour days as he and Julio struggled to resurrect the family's grape growing business after Prohibition and the trauma of their parents' deaths.
Yet Ernest rarely mingled with his industry counterparts, although he served as an early Wine Institute chairman and remained active on its board.
While the family kept its distance from fellow winemakers, they courted political influence when necessary. While Ernest was a frequent donor to such Democrats as Sen. Dianne Feinstein, D-Calif., and former Rep. Gary Condit, D-Modesto, Koch recalls a Modesto dinner at Ernest's home in 2000 for George W. Bush.
The broad support made him a popular figure on his trips inside the Beltway. "Everyone was willing to take time to meet Ernest Gallo," Koch says.
Even as the Gallos bought thousands of acres of vineyard land, their winery always needed more grapes. Growers throughout California enjoyed the largesse of its constant expansion. Not only were the Gallos the largest employer in Modesto, where their sprawling winery complex is located, but they offered economic stability throughout Central Valley and in areas like Lodi and Sonoma counties.
"The University of Gallo, a lot of us have been through it," says Sonoma vineyard manager Pete Opatz, who grew grapes for Gallo in the 1980s. "These guys really loved this county and put a lot of money here."
Despite frequent tumult within their own family, Ernest and Julio saw the virtues of doing business with other families, especially other Italian immigrants. Ernest even married the daughter of a grape grower, Amelia Franzia. (Ernest's nephew is Bronco Wine Co.'s Fred Franzia) When the Seghesio family controlled about one-fifth of Sonoma's bulk grape business in the 1960s, Gallo was an enthusiastic buyer of fruit from North Coast counties. But that didn't make negotiations easy.
Pete Seghesio Jr., CEO of Seghesio Family Vineyards, recalls driving in his father Pete Sr.'s Ford Fairmont down to meetings with Ernest in Modesto. "He was the toughest guy I saw my father ever deal with," Seghesio says. "My dad and him would go round and round."
Tireless worker
In 1993, both Ernest's wife Amelia and his brother Julio passed away. Another son, David, died in 1997. Yet Ernest's determination never flagged. Well into his 90s, he could be found working on weekends. Top industry executives recall their stints working for Ernest as an object lesson in commitment.
"He and I would be the last two people out of the winery in the evening, and I would rarely beat him out," recalls Kent, who worked as a senior Gallo executive from 1991 to 2000. "He was never satisfied, and he never allowed the managers around him to be satisfied. He was always pushing for more."
Boycott target
The Gallos were often a lightning rod for controversy. Ernest's legendary enmity toward the United Farm Workers Union fueled several long-standing feuds and two boycotts. But his seemingly preternatural ability to read the marketplace gained him enormous, if sometimes grudging, respect. While Julio crafted the wines, Ernest detected what Americans would want to drink next, relying in part on endless reams of sales data that allowed him to see untapped potential -- or unmotivated salespeople. Respect for Gallo wines was harder to come by. The most extreme example was Thunderbird, hatched in 1957 and, for many years, Gallo's top-selling product. That the apparent target of the potent white-port-and-juice mix was low-income African American customers was long a source of criticism. Wines like Ripple and Boone's Farm gained a similar reputation.
Not all Gallo products were so contentious. Simple, everyday wine in screwcapped bottles proved to be a formula for huge success. Jugs of Carlo Rossi were a common sight on 1970s dinner tables; it remains a top-selling brand. Bartles & Jaymes wine coolers (nowadays more of a malt cooler) were an unstoppable hit in the 1980s. By 2006, Gallo was responsible for selling an estimated 75 million cases of wine in more than 90 countries, according to Wine Business Monthly.
Nearly every wine drinker's path intersected with Gallo. In 1998, critic Robert M. Parker Jr., recalled his college-era tippling of Gallo's Hearty Burgundy, first introduced in 1964 and still available today. "I have tasted many wines that cost 10 times more that were inferior to this blend," Parker wrote.
Still, connoisseurs often dismissed Gallo wines as mass-produced plonk. The longtime rift between Ernest Gallo and Robert Mondavi, one that would heal in later years, was also the gap between low-end drinking and high-end drinking.
That low-grade reputation stung. Even in the early 1970s Ernest was converted to one of Julio's long-held beliefs: that the future lay with higher-quality wines sealed with corks. Early attempts fizzled, but in 1977 they established a beachhead in Sonoma when they bought the Frei Brothers property
Over the next two decades, Sonoma would be the focal point of a push for respectability, as the family poured huge amounts of money into local vineyards, buying such properties as MacMurray Ranch and establishing a Gallo of Sonoma brand. They constructed a massive facility outside Healdsburg with Julio's grandchildren, Gina and Matt Gallo, at the helm of what last year was renamed Gallo Family Vineyards.
Even as the Gallo's Sonoma efforts gained the respect (and critical praise) that Ernest and his brother long dreamed about, the Gallos' bread and butter remained everyday wines. Projects like Red Bicyclette, a French-grown table wine with a catchy label, were further signs of Ernest's determination to stay one step ahead.
Though Ernest was realistic about the wines' quality, he was always quick to defend them -- often with a wit that may have been the secret weapon of a man so often described as dour and unrelenting.
Bill Newlands, now the CEO of Beam Wine Estates, worked for Gallo from 1985 to 1994. During a lunch visit to Modesto a few years ago, Newlands recalls, Ernest came out of his office with his usual boundless energy.
"I said, 'I've got a little more gray than the last time you saw me,'" Newlands recalls. "And he never missed a beat. He said, 'You're drinking the wrong wine.' "
Jon Bonné is The Chronicle's Wine editor. E-mail him at jbonne@sfchronicle.com
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