INDUSTRY: American Wine Comes of Age

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Sun Screen. The Gallos have a talent for sensing consumer trends and being first with new products, as they were with pop wines. Now that growth is leveling off in the pop field, the Gallos appear to be shifting their promotional efforts to more conventional wines—Chablis Blanc, Pink Chablis, Burgundy and Hearty Burgundy.

Another element of the Gallos' success is technology. Their staff of 25 graduate oenologists is the nation's largest. Automation has cut production costs to the stalk: Gallo Hearty Burgundy, for instance, is made from more expensive grapes than a number of comparable competing Burgundies, but mass production helps keep the price about the same. The Gallos have the industry's first winery-owned bottlemaking plant, producing up to 1,500,000 bottles a day—all tinted in shades of green created by Gallo researchers to screen harmful ultraviolet rays. Though the Gallos' oenologists have developed a number of new grape varieties, the company owns only 10,000 of the 75,000 acres of vineyards that it draws upon. The bulk of the grapes are supplied by growers throughout the state under long-term contracts. Much to their credit, the Gallos have persuaded growers to upgrade their crops, notably by planting such high-quality grapes as Chenin Blanc or Barbera instead of lower varieties like Mission or Thompson Seedless.

Unlike nearly every other California winery, Gallo officially discourages visitors. This secretive, all-business tone is set by Ernest Gallo. He often spends his Sundays inspecting the vineyards and his vacations checking up on retailers. In a Texas town four years ago, a policeman became suspicious of a stern-faced man who was intently surveying a liquor shop after closing hours; anticipating a burglary attempt, the cop stopped the man for questioning. The suspect protested: "But I'm Ernest Gallo." Replied the cop: "Yeah, and I'm Lyndon B. Johnson." In business transactions, Gallo's way is the only way—or no deal. Southdown Corp. Chairman D. Doyle Mize recently negotiated with Gallo about selling him some grapes. A few days later, Mize recalls, Gallo walked into his office and said, "Here's the contract. Here's a pen. Don't waste my time with any lawyers."

Both Gallos live quietly in houses on the Modesto vineyard. They arrive at the office at precisely 8 a.m., spend the day in frequent communication with each other, and knock off at 7 p.m. When the Gallos entertain, usually for visiting company executives, they serve only their own wines—a white, a pink, a red and a champagne. Says Ernest: "Only when Mrs. Gallo and I are at home alone, which is not very frequently, will I drink my competitors' wines in order to follow their progress." Ernest and Julio are both at the age when many men retire, but they have given little indication of designating successors. Each has two grown children; so far none has emerged as an heir apparent.