E & J Gallo Winery

Gallo is a winery and distributor headquartered in Modesto, California. It was founded in 1933 by Ernest Gallo and Julio Gallo of the Gallo family, and is the largest exporter of California wines. It is the largest wine producer in the world, producing over 3% of the world's annual supply of 35 billion bottles with an annual revenue of $5.3 billion. It is also the largest family-owned winery in the United States. Gallo provides about 3,500 jobs to Modesto residents and 2,500 jobs in other parts of the state, country, and world.
During Prohibition in the United States, Ernest and Julio Gallo grew grapes and sold them to Eastern states where home winemaking was allowed.
On June 14, 1933, Ernest Gallo filed an application with the Prohibition administration to open a bonded wine storeroom in San Francisco. On June 20, his application was rejected. He was advised that in order to open a storeroom, he had to own a bonded winery. And in order to be bonded as a winery, he had to own vineyards. Ernest and Julio then took steps to bond a winery in the name of their newly formed partnership, E & J Gallo. They had stationery printed that included two designations next to their name: "winery" and "grape growers and shippers". Their father's estate owned both the grape growing and shipping businesses as well as the vineyards required to establish a winery, at that juncture. Ernest applied on this letterhead to the Board of Alcohol for approval. He wrote that he and Julio were "grape growers with over 400 acres of grapes".
The two brothers started the winery in the fall of 1933, following the repeal of Prohibition. Ernest and Julio were competing against larger, more established, and better financed companies, including more than 800 wine companies established in California in the first few years after the repeal of Prohibition. Their starting capital was less than $6,000 ($140,494 inflation-adjusted to 2024), with $5,000 of that borrowed by Ernest from his mother-in-law, Teresa Franzia. The brothers learned the craft of commercial winemaking by reading old, pre-Prohibition pamphlets published by the University of California which they retrieved from the basement of the Modesto Public Library. Julio was focused on the production of wine, and Ernest on its sale. They had just one tractor, and would run it permanently on 12/12 hour shifts. On the first year of activity, the brothers had produced 177,000 gallons of wine. An E. & J. Gallo Winery early brand was Cream of California for wine and brandy.
In 1957, E & J Gallo launched the fortified cheap white wine Thunderbird. In 1962, E & J Gallo launched the one gallon finger-ringed jug of cheap wine, Red Mountain, later Carlo Rossi Red Mountain, named after a winery above Oakdale that closed during Prohibition. Later, the US market began to move away from cheap wines. Ernest and Julio were the first to introduce brand management and modern merchandising to the wine industry, and led the way in bringing new products to store shelves. They were first in breakthrough quality initiatives such as long-term grower contracts for varietal grapes and grape research programs. They were also first to establish a truly significant foreign sales and marketing force to export California wines overseas. They pioneered wine advertising on television and launched many wine advertising campaigns. (One of these helped to popularize "Hymne", composed and performed by Vangelis, by featuring it as background music in some of its television commercials.) The company's 1960s ads were focused on associating their US-made wines with Europe's fine wine regions. In 1983, for the first time, the company put a vintage date on one of its wines, the 1978 Sonoma Cabernet Sauvignon.
During the 1980s and 1990s, E & J Gallo bought wine labels from Europe and Australia. By 1993, E & J Gallo was the country's largest winery, with a 25% share of the American wine market. Julio Gallo died in a car accident on 2 May 1993. Ernest died in 2007, and his son Joe Gallo took over the company as CEO.
In 2002 E & J Gallo purchased the Louis M. Martini Winery, giving the company its first Napa Valley location. On September 14, 2007, Martha Stewart Living Omnimedia announced a partnership with E & J Gallo Winery to produce a brand of wine labelled "Martha Stewart Vintage". In 2011, E & J Gallo sold Hornsby's hard cider to the C&C Group for an undisclosed amount and partnered with Boisset Collection to purchase the Mondavi estate. In 2017, E & J Gallo Winery bought the Napa Valley Stagecoach vineyard.
In April 2019, Constellation Brands Inc. announced a deal to sell wine brands, including Clos du Bois and Mark West, to E & J Gallo Winery for $1.7 billion. The deal was later amended, twice, to exclude sparkling wine brands Cook's California 'Champagne' and J. Roget American 'Champagne' (both retained by Constellation for four years post final agreement), Paul Masson Brandy which was divested to Sazerac Company Inc., Sheffield Cellars and Fairbanks divested to Precept Brands LLC, and its High Color Concentrates division was divested to Vie-Del Company. for an adjusted price agreement of $1.1B, of which $250 million is an earnout if brand performance provisions are met over a two-year period after closing. Agreement was finalized on January 6, 2021, for $810 million.
In 2020, the University of California, Merced was planning on opening its first new school since it launched, the Ernest & Julio Gallo School of Management, a multi-disciplinary school encompassing many different disciplines.
In 2024, more than 90 years after Ernest and Julio founded their namesake E. & J. Gallo Winery, the company has simplified the company name to a single word: GALLO.
Gallo helped develop and implement the Code of Sustainable Wine Growing Practices, in collaboration with the Wine Institute and the California Association of Winegrape Growers.
The Code promotes sustainable practices which are environmentally sound, economically feasible and socially equitable. It covers virtually every aspect of the wine business including viticulture and grape growing, wine making, purchasing and building and maintaining productive relationships with neighbors and the local communities.
Gallo received ISO 14001 certification from the International Organization for Standardization. The certification was created to globally assist and guide companies to reduce their environmental impact.
In April 2009, the California State Water Resources Control Board served Gallo Glass Co. (a Gallo Winery subsidiary) with a cease and desist order and $73,000 fine for allegedly channeling water from the Russian River into an unlicensed reservoir; however, there are provisions for licensing the reservoir under proper monitoring of flow and capacity.
In March 2015, the California Department of Toxic Substances Control sued the E & J Gallo glass production plant in Modesto for improper storage and treatment of the glass bottles. E & J Gallo would use the dust collected by its air pollution control devices, and introduce it in the components of their glass bottles during production. E & J Gallo argued that this process was standard in the wine industry.
In February 2023, the Central Valley Regional Water Quality Control Board ordered E &J Gallo to pay $378,668 in fines for discharging irrigation and waste water into the Merced River, posing a threat to the health of fish and other aquatic life.
Viticulturists at Gallo use their vineyard resources to trial new grape variety plantings in California wine regions in an effort to see which varieties grow best in various climates and soil types. One of the varieties that Gallo has been trialing in the San Joaquin Valley is the French wine grape Ederena.
Advertising Age noted that "the Gallo experience," during the 1950s, 1960s, 1970s and 1980s, wore down many an ad agency. Ernest Gallo was listed in the periodical's "The TOUGHEST Clients" series.
E & J Gallo Winery was named the "Bon Appetit Winery of the Year" in the 1996, 1998, and 2001 San Francisco International Wine Competitions.
Intangible Business, a brand valuation firm, rated Gallo as the world's "Most Powerful Wine Brand" in 2006, 2007, 2008, and 2009.
In 1970, David Gallo was considering suing country rock group Boones Farm over the use of the name, Boones Farm.
In 1986, the Gallo brothers sued their younger brother Joseph for selling cheese branded with the Joseph Gallo Farms name. Joseph then counterclaimed, alleging that Ernest and Julio conspired to steal his share of the inheritance from their father. This claim included the winery, where the evidence submitted by Joseph's attorney suggested that it was actually started by their father. Joseph Gallo lost both suits and was forced to change the name of his business to Joseph Farms.
In the 1990s, Gallo Winery made an agreement with Gallo Pasta (a Spanish company) that the latter would not sell their pasta in the United States. Gallo filed a cease-and-desist order in April 2009 against "The Spanish Table", a Seattle-based specialty food retailer, for carrying the pasta despite the previous agreement with the maker.
In February 2010, twelve French winemakers and traders who had supplied wine to Gallo for its Red Bicyclette brand were found guilty in a French court of fraud, as they had claimed an inferior wine sold to Gallo was Pinot noir.
In October 2019, a lawsuit filed in the Eastern District of California claimed Gallo used patented technology without a license to develop their irrigation system.
The United Farm Workers (UFW) began boycotting Gallo in the summer of 1973 after Gallo did not renew their contract and signed with the International Brotherhood of Teamsters. Led by Cesar Chavez, the UFW alleged that Gallo had worked out a "sweetheart deal" with the teamsters that offered fewer protections and that workers did not agree to teamster representation. An estimated 10,000 workers and supporters of the UFW marched 100 miles over the course of a week to the Gallo winery in Modesto.
Supporters of the boycott nationwide protested the buying and selling of Gallo wines, including student groups at Harvard University in Cambridge, MA who demanded a boycott of Gallo by the university and picketed local stores. The boycott against Gallo was called off by the UFW in 1978 after the union felt it had improved workers' rights of representation in labor disputes.
In October 2009, the California Agricultural Labor Relations Board (CALRB) revoked a 2007 election to eject the United Farm Workers from Gallo Winery, citing interference from Gallo. This was the second time in a decade a vote to remove the union was overturned due to allegations of Gallo illegally trying to influence proceedings; the other was a 2003 ruling in which the CALRB threw out an election citing a foreman improperly requesting signatures for the petition for the vote. Gallo appealed that decision.
In 2023, Gallo laid off 355 of its California workers after a Texas company, Republic National Distributing Co. (RNDC) took control of handling partnerships with chain retailers in California.
In addition to the Gallo Family Vineyards brand, the company makes, markets, and distributes wine under more than 100 other labels.
The company also makes the low-end fortified wines Thunderbird and Night Train Express.