Exclusive news and research on the wine, spirits and beer business

Interview, Part 1: Gallo Builds A Presence In Luxury Spirits

July 14, 2020

he name E.&J. Gallo is synonymous with wine, and the Modesto, California-based company continues to rank as the top wine marketer both in the U.S. and worldwide.But Gallo has also been an increasingly active player in the U.S. spirits market, with spirits volume up 11% to more than 10 million cases last year, according to Impact Databank. Gallo’s spirits unit, led by vice president, general manager Britt West, includes volume-drivers like E.&J. Brandy (3.8 million cases in the U.S., including flavors) and New Amsterdam vodka (5.2 million cases), but lately it has expanded with higher-end offerings like the Dalmore and Jura single malt Scotch whiskies, Germain-Robin brandy, Amaro Montenegro, Diplomatico rum, and most recently Don Fulano Tequila. SND executive editor Daniel Marsteller spoke with West to get an update on where Gallo’s spirits business is headed.

SND: Gallo has been assembling a portfolio of upscale spirits brands, mostly on an agency basis. What was the impetus for that strategy?

West: Looking back a few decades, we identified that 30 years ago the market was mostly made up of companies that preferred to import brands rather than own them outright, such as the great importers of Paddington and Hiram Walker. Today, we thought, there are a number of great brands out there that no longer had a good route to market unless they stood up their own U.S. infrastructure. These were brands with great history and heritage, with ownership bases that are not interested in selling. These people enjoy the industry, and they’ve been in it oftentimes longer than we’ve been in the wine industry, which is hard to believe. You put together those pieces of Diplomatico, The Dalmore, Amaro Montenegro, and now Don Fulano Tequila, plus you add our acquisition of Germain-Robin brandy, and suddenly you have a great portfolio that any fine dining account, any icon or mixology account, will be interested in. And because of our larger brands like New Amsterdam and E.&J., we rank as the seventh-largest spirits supplier by volume and ninth by value in the U.S.

SND: Don Fulano Tequila is the newest member of the portfolio. How are the prospects there?

West: While very small in the U.S., Don Fulano is in all the right mixology bars around the world. They’ve established a footprint within the elite mixology community; they just need help with their route to market in the U.S. Don Fulano is 100%-estate grown agave, which is rare in the industry, and the brand has just been repackaged. Many years ago, Don Fulano started aging in all different types of wine casks, Armagnac casks, and so on, before any of this became trendy. They have excellent capacity that we could expand upon and also a real opportunity for some unique expressions as well.

SND: In single malt, you have Dalmore, whose profile has been rising lately in the collectible market.

West: With master distiller Richard Paterson at the helm, Dalmore has an incredible cask inventory and ability to produce special high-end expressions. That provides a wonderful halo for our 12-, 15-year-old, 18-year-old, Cigar Malt, and Port Wood offerings. When you have family ownership that is focused on the long term rather than the next quarterly shareholder meeting, you look at the current tariffs on single malt as a blip on the radar. We need to continue doing the right things by the brand, growing in the premium account universe where we’ve seeded The Dalmore and Jura. Despite the tariffs, these brands are accelerating.

Subscribe to Shanken News Daily’s Email Newsletter, delivered to your inbox each morning.

Tagged :

Get your first look at 2019 data and 2020 projections for the wine and spirits industries. Order your 2020 Impact Databank Reports. Click here.

Previous :  Next :