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Gallo Sees “Tremendous Potential” For Premium California Brandy

September 28, 2017

While the formerly stodgy American brandy category has experienced a renaissance over the past few years, E.&J. Gallo believes the revival is just getting started. Gallo is already the overwhelming leader in American brandy with its namesake E.&J. label ($12 a 750-ml.), a volume driver that sells 3.9 million cases annually, but the company now tells SND it sees “tremendous potential” to develop a meaningful premium California brandy category that takes its cues from the craft spirits movement.

In August, Gallo acquired high-end brandy distiller Germain-Robin, whose 6,000-case portfolio retails at $48 and up. But the company is also innovating in upscale brandy with its new Argonaut label, which includes a range of offerings at the super-premium and above level.

Argonaut is debuting with four expressions: Speculator, which is at 86 proof and retails at $38 a bottle; Fat Thumb (86 proof/$50); Saloon Strength, an on-premise specialty offering at 91 proof; and The Claim (84 proof/$200), a top-end brandy blended from rare, aged stocks. “The lots to be blended into Argonaut, and the lots to be aged for future blending legs, are being distilled at two separate facilities,” says Robert Ruijssenaars, vice president of marketing for Gallo’s spirits unit. “The alembic pot-distilled brandy is distilled at McCall Distillery in Sanger, California. The Coffey-distilled, or column-distilled, brandy is produced at our Fresno distillery.”

So far, Argonaut is only available in San Francisco, but Gallo plans to expand the brand into more markets looking ahead. “We’ve been very pleased with the reception from trade and consumers in San Francisco,” Ruijssenaars says, adding that the company is promoting the newcomer both in cocktails and as a sipping brandy. “We’re initially focusing on consumers interested in exploring different brown spirits, and we’ve seen that Argonaut holds great appeal for them. We see a very bright outlook for premium California brandy overall—the long-term potential is enormous.”

Gallo declined to provide a volume projection for Argonaut, with Ruijssenaars noting that the premium California brandy category “is still in its infancy, with little consumer awareness.” But the company is clearly bullish on prospects for the brand, which represents its first upscale innovation play in the spirits sector, following value-oriented launches New Amsterdam vodka and gin (selling 5.1 million cases and 725,000 cases last year, respectively, according to Impact Databank), Camarena Tequila (465,000 cases) and Shellback rum (20,000 cases). “Together,” says Ruijssenaars, “Germain-Robin and Argonaut can display the quality, distinctiveness and range of flavor profiles of California brandy, and offer brown spirits drinkers a sweeping stylistic landscape to explore.” —Daniel Marsteller

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