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.
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.
"Ernest lived a long, very active life with many great accomplishments," said Mike Gallo, son of the elder Joseph Gallo. "I'm sure his family is very proud of him, and they should be. He had an impact on the wine industry and the whole state. He was a dynamo."
The son of Italian immigrants, Ernest Gallo was born March 18, 1909, in Jackson, a year before Julio. The family lived for a time in Antioch and Escalon before moving to Modesto in 1924.
Ernest Gallo worked in the Maze Boulevard vineyard owned by his parents, Joe and Susie Gallo, while attending Modesto High School. The grapes were sold in Chicago for home winemaking, which was allowed during Prohibition. Gallo showed his salesman's skills early, traveling to the Midwest at 17 to complete a deal.
He graduated from Modesto High in 1927 and earned a degree from Modesto Junior College.
He married Amelia Franzia, daughter of the founders of Franzia Winery near Ripon, in 1931. Amelia Gallo died in 1993.
Gallo Winery arose amid tragedy. In June 1933, Joe Gallo, despondent over business troubles, shot and killed his wife and then himself.
The Gallo brothers inherited the debt-ridden vineyard and, later in 1933, started the winery with working capital borrowed from Ernest Gallo's mother-in-law, Teresa Franzia.
The Gallos sold their first batch — 177,847 gallons of blended red table wine — for 50 cents a gallon to a Chicago distributor, turning a profit. Theirs was one of hundreds of wineries launched at the end of Prohibition, and one of the few to survive.
Ernest Gallo recognized early on that the California wine industry's practice of selling bulk wine to East Coast bottlers had to change. The state's wineries at the time were wholesalers and had little control over quality or how the final product was marketed.
The Gallos worked to improve their wine, introducing filtering techniques, using stainless steel tanks and blending wines to gain consistent quality.
"Gallo pioneered the improvement of the varieties of grapes being planted," Ernest Gallo said in the 1999 interview, conducted in writing in keeping with his publicity-shy nature. "Another important step was our development of scientific methods for quality control so that consumers could count on every bottle of wine being sound and enjoyable when they bought it. This continues at a very high level. These things contributed to the development of American wines that rival any in the world."
Gallo trained an army of salespeople to convince grocery stores that they should make room on their shelves for his bottles at a time when wine was not popular.
He would inspect store displays in small towns throughout the country, critiquing the way Gallo wines were presented and peppering store managers with questions.
Gallo's size made it a dominant player, but it was reined in somewhat via an antitrust complaint from the Federal Trade Commission. The company signed an agreement that restricted its relationships with its distributors for 10 years.
Gallo also drew complaints at times from California grape growers, who said the prices the winery paid were too low. And the company was hit by a national boycott by the United Farm Workers union in the 1970s.
Through it all, the winery grew and prospered, thanks in part to Gallo's knack for anticipating public whims.
The company sold sweet dessert wines in the 1930s and 1940s to a consumer market reacquainting itself with wine. Jug wines abounded in the 1950s and 1960s. Sweet carbonated apple wine came along in the 1960s and 1970s, followed by Bartles & Jaymes wine coolers in the 1980s.
Gallo has made a big splash in Sonoma County in the past decade with its higher-end Gallo of Sonoma wines. It also bought several well-regarded wineries, such as Louis M. Martini in the Napa Valley, and imported wines from Italy, Australia and elsewhere.
The Gallos built a vertically integrated company, including vast vineyards, the bottle plant, an art department to design bottles and labels, and a plant to make screw tops.
The hard-driving personality that helped make his wines so successful also made Gallo a difficult taskmaster. The winery developed a reputation for hiring promising young marketing graduates from the top universities, riding them hard for a few years and burning them out.
Many went on to become executives at other beverage companies, and they admit that the Gallo experience was a valuable crash course in marketing. The winery's training program is sometimes referred to as "Gallo University" within the industry.
Some pointed out that Gallo didn't ask them to work any harder than he did. It's just that very few could keep the pace he set for himself.
Gallo was a vigorous defender of the wine industry against what it calls "the neo-Prohibitionist movement."
Yet he also donated $3 million to establish the Ernest Gallo Clinic and Research Center at the University of California at San Francisco to seek a solution to alcohol abuse. The clinic does research on the genetic, biochemical and neurobiological aspects of alcohol abuse.
Over the decades, Gallo was honored many times. In 1964, he won winemaking's highest honor, the American Society of Enologists Merit Award for outstanding leadership in the wine industry. He also won the Gold Vine Award from the Brotherhood of the Knights of the Vine wine fraternity and the 1983 Distinguished Service Award from The Wine Spectator.
In recent years, the winery has been lauded for its upscale wines. It was named Winery of the Year in 1996 and 1998 by the San Francisco International Wine Competition and has garnered top awards in competitions in France, England and Italy. The Los Angeles County Fair wine competition named Gallo the Winery of the Century.
Today, E.&J. Gallo Winery employs children and grandchildren of the founders in key positions. Ernest Gallo assured that it will remain family-owned "as a result of the estate planning steps he took during his lifetime," his son Joseph said.
"My father's passion for the wine industry was matched only by his passion for life and for his family," he said. "He adored his children, grandchildren and great-grandchildren, and he believed his family was his greatest legacy and success. My father died knowing that he had lived life to its fullest."
Bee staff writer Garth Stapley contributed to this report. To comment, click on the link with this story at www.modbee.com.
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