President of Gallo is bullish on wine industry

FRESNO -- Joseph Gallo, head of the largest family-owned winery in the world, reinforced his commitment to California's wine industry Friday with a pledge to enter into new grower contracts worth thousands of acres of grapes.

Gallo, president of the Modesto-based E.&J. Gallo Winery, made a rare public appearance at the annual San Joaquin Valley Winegrowers Association's Wine and Grape Industry forum in Fresno.

And the 70-year-old Gallo came with big news.

He said the winery that operates three plants — in Modesto, Livingston and Fresno — plans to add capacity to handle hundreds of thousands of tons of grapes. The winery also is targeting 10,000 acres of long-term contracts with growers for new wine-grape supplies.

"Our forecast is for growth in the wine business," Gallo said.

Gallo said the wine industry is on an upswing, with sales up about 6 percent in volume and thousands of potential wine drinkers coming of age every day.

"Many are forsaking mass-produced beers and going straight to wine, spirits and craft beers," Gallo said.

Young people today also are more likely to grow up in households where parents drink wine regularly rather than only on special occasions. And wine's being talked about more, especially on lifestyle television shows and in social media.

Most sit-down restaurants have wine on their menus, and even casual places such as Sonic and Starbucks are offering wine on a trial basis, Gallo said.

But the industry has much work ahead if it wants to continue growing. And catchy slogans or well-funded industry advertising isn't the answer.

Gallo said his late father, Ernest Gallo, spent many years trying to come up with ideas for how to generate new consumers, but he ultimately gave up on all of them.

"He finally came to the conclusion that to make wine consumption grow, the industry had to make a better product that the masses want to drink," Gallo said. "It is that simple."

E.&J. Gallo produces more than 60 brands, including table, sparkling and dessert wines along with distilled spirits. Among its most recently popular products are the sweet-tasting moscato and red wine blends.

The growth in those nontraditional wines tells Gallo that consumers — especially occasional wine drinkers — are buying what they like to drink, not what wine critics are giving high scores.

"When the industry makes a good-tasting wine for the nonwine drinker, it unleashes a tremendous pent-up demand," Gallo said. "And sales explode."