Ernest Gallo, who with his brother Julio built their Modesto winery into an international powerhouse, died Tuesday. He was 97.
Gallo died early in the afternoon of natural causes, surrounded by family at his Modesto home, company spokeswoman Susan Hensley said.
The brothers founded E.&J. Gallo Winery as Prohibition ended in 1933, using $5,900 and a winemaking pamphlet from the Modesto Public Library to produce their first batch in a shed at Ninth and D streets.
Dear Fellow Employees:
It is with great sadness that I inform you that my father and our co-founder, Ernest Gallo, has passed away this afternoon at his home.
As you may know, my father and my uncle Julio started our company in 1933 with little more than a remarkable vision and a powerful drive to succeed. My father always enjoyed walking through the buildings, meeting with people, asking questions, overcoming challenges, problem solving, and seeing the commitment of all of us to grow, produce and market the highest quality wines in the world. Ernest will be greatly missed.
My father always believed strongly in the power of family-owned businesses, and he took the necessary steps to ensure that, after his death, the Gallo winery would remain family owned. The Gallo family is very proud of our company, its humble beginnings and its bright future. Over the years, Ernest and Julio's vision and your commitment have enabled our company to grow and become America's largest winemaker. While our company is based in Modesto, our market is now the world and Gallo customers can be found in more than 90 countries.
On Friday, March 9, 2007, all operations of the E.&J. Gallo Winery will be closed in memory of our co-founder, Ernest.
The Gallo winery was founded by two great men and built by all of us. From the beginning, our company has always been forward-focused and committed to providing our customers with the highest quality, best value wines. This will never change.
Thank you and, as my father would say, "All the best."
Sincerely,
Joseph Gallo
Although the $10 million they contrib-uted for the Gallo Center for the Arts in downtown Modesto, may be the most visible, it's not the only beneficiary of Gallo money.
The United Way. Central Catholic High School. The McHenry Mansion. St. Stanislaus Church. The Modesto Symphony. Memorial Medical Center.
They and many other community organizations have benefited greatly from Gallo family donations.
Many times, Gallo contributions have come with the condition that their gifts not be made public.
"When they felt good about something, they just did it, and they didn't want to get acclamation for it," said Ron Emerzian, who worked for Gallo Winery for 47 years before retiring as vice president of community affairs.
Ernest Gallo, who died Tuesday, had a particular interest in funding medical research. Over the past 25 years, he contributed several million dollars to the University of California at San Francisco.
The university's Ernest Gallo Clinic and Research Center has 150 staff members studying basic neuroscience and the effects of alcohol and drug abuse on the brain.
Emerzian said Gallo was committed to finding ways to reduce alcoholism: "He wanted to find out why some people can have a glass or two of wine and some people can't stop there."
Gallo also was interested in heart research, which he supported through additional contributions to UCSF.
The Ernest Gallo Foundation has been known to contribute more than $1million a year to various charities.
Emerzian said Stanislaus County's United Way has been a major beneficiary of the Gallo family largesse. He said their winery matches contributions made by their employees, routinely more than $300,000 a year, dollar for dollar.
"This community owes a debt of gratitude," said Ray Simon, longtime former Stanislaus County supervisor, about Gallo donations, particularly for the arts center.
Simon said Gallo supported an endowment that will enable people of all incomes to attend shows at the center.
And Simon said Gallo played a significant role in making the center's design beautiful.
"I think we did three designs. The first and second, he didn't care for — too flamboyant, too many windows. He wanted it to look very streamlined, with light flowing into the front," Simon said.
"When they finally put onto paper what he did like, and you'd see it, he was right. It was more attractive."
Simon said that even into his middle 90s, Gallo had his own ideas on how things should be.
"That was how he looked at things," Simon said. "Whether it was his business or the performing arts center (he believed): 'If I'm going to pay for it, shape it to my liking.'"
Gallo's commitment to improving Modesto was admired greatly by community leaders.
"He's had a big impact on Modesto, and so has the whole Gallo family. They've been a very, very good citizen," Modesto Mayor Jim Ridenour said.
"The Gallo trust works behind the scenes," Modesto Councilman Bob Dunbar said. "They do it under the radar. You'll never see anything in writing, but that's been a part of our community for as long as I've been here, and it's purely philanthropic."
Gallo "enjoyed tremendous respect from almost all quarters," according to former Modesto mayor and restaurateur Carmen Sabatino. "He had been sick for a while and he had been missed, and now we know we'll miss him forever."
Sabatino said Gallo wasn't one to show off his wealth: "I suggested to him one time that he needed a new wallet, and he told me that if his company had a good year he'd buy one."
Gallo's wit and conversation skills also will be remembered.
"Often at dinner, he would take outrageous positions just to test people, to see if you would come back with an intelligent point," said Carol Whiteside, president of the Great Valley Center. "He loved intellectual discussions. One week he was a flaming liberal, the next week he was an arch-conservative. It was always a challenging discussion."
Whiteside said he was extraordinarily well-read and was an intuitive manager.
"He was a man who could ask a million questions and never answer one himself," Simon said. "He was a master at asking questions about your business, your life, the county — always looking for things he could use in his business."
"He was a great decision maker," Emerzian said. "He knew how to gather information, and once he had it, he made decisions and never looked back."
The Gallo family has had a tremendous influence on the region, said Modesto Councilman Brad Hawn: "Their family, beginning with Ernest and Julio, has been a very positive influence on our economy, and the family's philanthropic efforts have been a very positive influence on our community."
Bee staff writers Jeff Jardine, Adam Ashton and Garth Stapley contributed to this report. To comment, click on the link with this story at www.modbee.com. Bee staff writer J.N. Sbranti can be reached at 578-2196 or jnsbranti@modbee.com.
A letter informed employees of 97-year-old Ernest Gallo's death, and the news filtered through administration offices and production lines.
Workers walked out of the bottling plant entrance on Santa Rosa Avenue and the glass plant on Santa Cruz Avenue thinking about the passing of the patriarch.
"He was somebody who helped us and the rest of this community," said Daniel Hernandez, who has been working for the winery 24 years. "He and his brother built this company from the ground up."
Some employees said they were surprised to hear of the death. Few wanted to talk, but those who did shared their admiration for Gallo.
Hernandez, 51, of Modesto, said he didn't share more than a handshake with Ernest Gallo. But the Gallo brothers left behind a lasting legacy to the employees who come to work each day.
"He had health problems, so he couldn't come down here any more," Hernandez said while standing in front of the bottling facility. "But he used to come down around Christmas time, about 10 years ago. He would go around shaking everybody's hands and thank them for their hard work."
'I thought it was my best shot'
The company employs about 3,000 people in Modesto and about 1,600 in Livingston, Fresno, Sonoma County and elsewhere.
All Gallo Winery operations will be closed Friday to honor Ernest Gallo's memory, according to the letter to employees from Joseph Gallo, Ernest Gallo's son.
Hernandez remembers that the last time the company shut down its operation was when Julio Gallo died in an auto accident in 1993.
Many employees, including Hernandez, crammed into a Modesto cemetery for Julio Gallo's funeral. Hernandez said he plans to do the same for Ernest Gallo and pay his respects.
Hernandez works as a machine operator, alongside Noe De Los Santos and Deo Dutt, filling bottles with wine or labeling the products.
They started working at the winery decades ago in general labor positions, inspecting the product's quality, dumping glass or cleaning the bottling facility.
"When I came from Mexico 20 years ago, this was my first job," said De Los Santos, 43, of Modesto. "I used to work in a bank in an office in Mexico City, so general labor wasn't what I was hoping for."
De Los Santos said he told himself he would learn English and leave the Gallo company for another job.
"But I found out it was a really good company, and I stuck around," De Los Santos said. "I thought it was my best shot."
De Los Santos didn't know Ernest Gallo, but he said he owes a lot to the company that gave him a chance at a new life.
Dutt and other employees who work on the production lines heard the news of Gallo's death from others as they walked out of the winery facilities.
"A lot of people don't know about it yet," said Dutt, 47, of Modesto, who has been working at Gallo Winery for 18 years. "A lot of people are new, so they don't know him. But when anybody dies, it's always sad."
The Gallo brothers started the company in 1933. Ernest focused on the distribution and marketing of Gallo wines, while Julio's expertise was in winemaking and vineyard management.
"My father always enjoyed walking through the buildings, meeting with people, asking questions, overcoming challenges, problem solving and seeing the commitment of all of us to grow, produce and market the highest quality wines in the world," Joseph Gallo said in his letter to employees.
He went on to say his father strongly believed in the power of family businesses and he took the necessary steps to ensure the winery will remain family owned.
Jose Martinez, 49, of Modesto has worked at the winery for 10 years. He said the company's operations already have been passed on to the second generation of winemaking Gallo family members.
"I think it's going to be business as usual tomorrow," said Martinez, who works in the maintenance department.
However, he said Ernest Gallo's death severs the company's last connection to its roots.
"He was the family's last icon," Martinez said.
To comment, click on the link with this story at www.modbee.com. Bee staff writer Rosalio Ahumada can be reached at rahumada@modbee.com or 578-2394.
Industry leaders lauded Ernest Gallo as the creator of the modern wine industry, taking it from the ruins of Prohibition to a multibillion-dollar industry.
"I don't believe unless people worked for him they fully understood what effect he had on the industry in terms of moving it forward," said Vic Motto, a wine industry analyst with Motto, Kryla & Fisher in St. Helena.
"When he got into it, it wasn't an industry at all. He started at the end of Prohibition. … He took the industry from nothing but a dream of what once was, to going way beyond what anyone could imagine."
Gallo pushed relentlessly to get wine onto grocery store shelves around the country in the years after Prohibition, opening markets for all the other California wineries, said Jon Fredrikson, a wine industry consultant with Gomberg, Fredrikson & Associates in Woodside.
Decades later, Gallo did the same thing in world markets, Fredrikson said.
"Ernest Gallo was far and away the key person that built the business. … He opened up the door for the rest of the industry," Fredrikson said.
Quality and value were keystones of Gallo's strategy, said Karen Ross, president of the California Association of Winegrape Growers.
"What Ernest did was to make wine something that could be part of everyday life. Ernest and his brother (the late Julio Gallo) really did put California wine on the map as a worldwide competitor," she said.
The industry refers to Ernest Gallo's marketing training as "Gallo University," and former Gallo marketing trainees serve as presidents and chief executive officers of many other wineries and other beverage businesses.
"He always wanted the best," said David Kent, chief executive officer of The Wine Group and a Gallo alumnus. "Ernest went out and recruited MBAs from the best schools and from other industries. He brought them in and taught them the wine business.
"Much of the strength of the industry is built on talent, and Ernest identified, brought in and trained much of the talent that built the industry."
Gallo was a pioneer in focusing on the consumer, Kent added.
"He defined the industry because he made it a consumer-driven industry. It had been a production-driven industry," he said.
Gallo was a very private and modest man, those who knew him said. But he had a keen and inquisitive mind, and a dry sense of humor, they add.
"He would talk about international affairs, what was going on in the White House, government and politics," said John De Luca, executive vice president of The Wine Institute and chairman of the board of the Ernest Gallo Clinic and Research Center at the University of California at San Francisco. "He had an extraordinary mind."
Gallo's inquisitiveness is evidenced by his founding, more than 25 years ago, the research center that bears his name. It studies the effects of alcohol on the brain, but also basic neuroscience that goes well beyond, into pain management and behavior, De Luca said.
De Luca said he "tussled" with Gallo frequently over issues during the 32 years De Luca served with The Wine Institute.
"He really wanted people who would test him, challenge him. But you better be really good," De Luca said. "He didn't tolerate fools, but he really brought out the best in you."
Louis Friedman, who worked for Gallo as an attorney at the winery for 25 years, agreed.
"It was a great challenge to work for him. He always stretched your capabilities. He made you learn and grow," Friedman said.
"He was truly a visionary in business and in seeing the potential of what could be," Friedman said.
Many may have been intimidated by Gallo and missed his sense of humor, friends said.
Harvey Posert recalled Gallo and Robert Mondavi reminiscing for an industry audience about traveling the country to sell California wines.
Gallo commented that they helped each other — he helping to sell Mondavi wines and Mondavi helping to sell Gallo wines.
"You can see what a great salesman Robert Mondavi is with all the wine I'm selling," Gallo said.
Kent said that when asked the source of his success, Gallo would reply, "Luck."
When pressed, he would say that the two most important factors are integrity and judgment. Integrity was keeping your word and commitment, even when doing so costs you money, Gallo would say.
He would then define judgment as knowing how to not make commitments that would cost you money.
"That's how funny and insightful he was. He had impeccable integrity and fantastic judgment," Kent said.
Gallo's influence on the industry will be felt for generations to come, said Bobby Koch, president of The Wine Institute.
"He created a spirit within the California wine industry that remains today and will forever."
To comment, click on the link with this story at www.modbee.com. Bee staff writer Tim Moran can be reached at tmoran@modbee.com or 578-2349.
EMPLOYEES: The winery employs more than 4,600 people, with about 3,000 working at the Modesto complex.
PLANTS: The company also has production facilities in Livingston, Sonoma and Fresno. Modesto is the distribution hub. It also is home to the bottling, aging, research and administrative operations. Grapes no longer are crushed at the Modesto plant.
TASTING: E.&J. Gallo Winery does not offer public tasting at its Modesto headquarters or other operations in the San Joaquin Valley. It does have tasting rooms for its Gallo Family Vineyards wines in Sonoma County and at two other wineries it owns -- Louis M. Martini in the Napa Valley and Bridlewood in Santa Barbara County.
BRANDS: About 100 labels are made by Gallo and its overseas wineries in Italy, Australia, New Zealand and France. Some of its labels include Gallo Family Vineyards (formerly Gallo of Sonoma and Twin Valley), Turning Leaf, Peter Vella, Livingston Cellars, Wild Vines, Redwood Creek, Burlwood, Copperidge, Bartles & Jaymes, Carlo Rossi, Anapamu, Bella Sera, Bridlewood, Da Vinci, Ecco Domani, Frei Brothers, Indigo Hills, Louis M. Martini, MacMurray Ranch, Maso Canali, Marcellina, McWilliam's, Mirassou Vineyards, Napa Valley Vineyards, Northern Sonoma, Rancho Zabaco, Red Bicyclette and White Haven.
TESTING: The staff creates 400to700 experimental wines annually at its research winery on Yosemite Avenue.
PRODUCTION: The winery produces an estimated 75 million cases of wine a year.
-- EVE HIGHTOWER
1966: Gallo's cooperage capacity reaches 100 million gallons.
1967: Gallo signs a three-year contract with United Farm Workers, agreeing to pay field workers $1.80per hour.
1969: Gallo sells more dry wines than sweet wines for the first time.
1972: Gallo shifts from producing traditional jug-style bottles to half-gallon, bell-shaped decanters with a heavy lip.
1972: Gallo opens the tallest building in Modesto, the 10-story Gallo Glass Co. batch plant near South Santa Cruz Avenue.
1973: UFW strikes at Gallo's Livingston Ranch in a dispute over a switch to representation by the rival Teamsters Union. Eleven people are hurt and 61 arrested in a field during the harvest.
1974: Four-year boycott against Gallo wines begins at urging of UFW.
1977: Gallo's wine storage and cooperage capacity reaches 200 million gallons.
1978: Winery builds an underground cellar in Modesto for 650 oak tanks, which each hold 4,000 gallons.
1978: Congress passes a bill to reduce inheritance taxes on family members who control closely held firms. The law was dubbed "the Gallo wine amendment" by Kansas Sen. Bob Dole.
1982: Gallo stops buying Thompson seedless grapes, which for decades had been a mainstay in its wines.
1986: Ernest and Julio Gallo sue their younger brother, Joseph Gallo Jr., to stop his using the Gallo name on cheese labels. Ernest and Julio won the bitter court battle in 1989, but the dispute ripped apart the once-close extended family.
1989: Forbes magazine estimates Ernest and Julio Gallo's net worth at $350 million.
1989-90: Gallo family members contribute more money to federal candidates than any other family in the United States, $294,000.
1993: Controversial book "Blood and Wine: The Unauthorized Story of the Gallo Wine Empire" alleges the winery's roots stem from Gallo family bootlegging during Prohibition.
May 2, 1993: Julio Gallo dies when the Jeep he was driving goes off a dirt road and rolls on his son's ranch near Tracy.
Dec. 22 1993: Amelia Franzia Gallo dies at age 83, after 62 years of marriage to Ernest Gallo.
-- J.N. SBRANTI
The winery grew to become the world's largest by volume, a title since taken by Constellation Brands of New York. Gallo remains second, selling an estimated 75 million cases a year worldwide under about 100 labels.
"My brother Julio and I worked to improve the quality of wines from California and to put fine wine on American dinner tables at a price people could afford," Gallo told The Bee on the occasion of his 90th birthday in 1999. "We also worked to improve the reputation of California wines here and overseas."
The Gallo fortune stood at an estimated $1.2 billion a year ago, Forbes magazine reported. He was involved well into his 90s in the company, which is family-owned.
Industry and community leaders Tuesday recalled Gallo's charitable spirit as well as his impact on the wine business.
"We've really lost a giant," said Bette Belle Smith, a longtime colleague in Modesto-area causes. "He was part of the landscape, a very vital part of our landscape. What an impact he made on this community, this era."
The Gallo family provided a $10 million endowment for the Gallo Center for the Arts, set to open in downtown Modesto this fall, and supported health care, education and other causes.
The winery long was known for its low-priced jug wines from the valley, but it added premium brands, notably the Gallo of Sonoma line, in the past few decades.
"Mr. Gallo and his brother were true pioneers," said Robert Koch, president of The Wine Institute. "They built their company from scratch, and in turn were instrumental in building the American wine industry. It's a wonderful American success story."
In a statement, Gov. Schwarzenegger said, "Ernest's entrepreneurial spirit and extraordinary innovation made him instrumental in establishing California as a world leader in winemaking."
Julio Gallo, who died in a Jeep accident in 1993, oversaw the vineyards and winemaking. Ernest Gallo handled sales with tenacity, visiting stores unannounced to see if the wine was getting good display.
Although reluctant to discuss the company in detail with the media, Ernest Gallo was a pioneer of wine advertising on television. He also led the way in establishing national and global sales forces.
Until as late as last year, Gallo would drop in occasionally at the office he kept at winery headquarters off Yosemite Boulevard, Hensley said.
The operations will be closed Friday in his honor, said a letter to employees from Joseph Gallo, his son and chief executive officer at the company.
"My father always enjoyed walking through the buildings, meeting with people, asking questions, overcoming challenges, problem solving and seeing the commitment of all of us to grow, produce and market the highest-quality wines in the world," he wrote.
Gallo employs 4,600 people, about 3,000 of them in Modesto and the rest in Livingston, Fresno, Sonoma County and elsewhere. The Modesto complex no longer crushes grapes, but does blend, bottle and age wine. It also has a bottle plant and research center.
Gallo's death came less than a month after another brother, Joseph Gallo, died at 87. Joseph Gallo had been estranged from Ernest and Julio because of a legal dispute that arose in the 1980s over Joseph's use of the family name on cheese he produced in Atwater and his claim to a share in the winery. Joseph Gallo lost in court on both issues.
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