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Gallo’s Import Business Builds Major Presence

May 30, 2013

While E&J Gallo Winery remains focused on its leadership position in California wine, the company’s import business has been making major strides with Old and New World brands contributing. Italy (Ecco Domani and LaMarca), Spain (Las Rocas and Martín Códax), Argentina (Alamos and Don Miguel Gascón) and New Zealand (Starborough and Whitehaven) have all been key growth drivers on Gallo’s import side.

“Over the past few years, we’ve made significant investments in our Spanish and Italian portfolios,” says Rich Kranzmann, Gallo’s vice president and general manager, premium business unit. In the Italian category, the company has seen strong growth with Pinot Grigio, led by Ecco Domani (retailing around $14 a 750-ml.), Maso Canali ($23) and DaVinci (ranging from $15-$60). Ecco Domani, the U.S. market’s fourth-largest Italian wine brand, saw volume increase by 7.1% to 1.1 million cases last year, according to Impact Databank. Growth within Gallo’s Italian portfolio is also being driven by Impact “Hot Brand” LaMarca Prosecco, which more than doubled to 260,000 cases in 2012.

Among Spanish wines, Gallo is seeing consumer interest in Garnacha-based brands like Las Rocas ($14-$20), Kranzmann says. Similarly priced Martín Códax has benefited from a trend toward emerging Spanish varietals like Albariño.

In the New World, Gallo is supporting its Argentine brand Alamos with a “Dare to Pair” program that highlights the versatility of Argentine Malbec with a variety of foods. Alamos—generally priced between $10.99-$14.99—saw volume jump 37% last year to 815,000 cases. Slightly higher up the pricing ladder, Gallo’s Argentine business is also receiving a boost from Don Miguel Gascón, which ranges from $15-$25 and is above 175,000 cases in the U.S. market. While Malbec is still “king” in Argentina, says Kranzmann, the country’s winemakers are increasingly eager to broaden their horizons, particularly with Cabernet Sauvignon and red blends.

Gallo’s New Zealand business, meanwhile, is following the region’s positive growth trend, led by Sauvignon Blanc from the Whitehaven ($20) and Starborough ($15) brands. Starborough, an Impact “Hot Prospect,” is now above 90,000 cases in the U.S. market.

Kranzmann notes that Australian Shiraz, Italian Chianti and German Riesling continue to be soft categories within imported wine. Gallo and other importers also are facing challenges as increasing demand and diminishing supply in New Zealand and Europe pressure producers to increase prices. Kranzmann says Gallo is currently working with its producer partners to mitigate the impact of higher costs on pricing. But, “The economic reality remains,” he admits, “that costs continue to rise and it’s starting to impact consumer prices.”

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