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Goodbye, Wine Snobs: How E. & J. Gallo Winery Courts Millennials

Wine Over Ice? Younger Consumers Not Tied to Drinking Traditions

By Published on . 2

As VP-marketing for E. & J. Gallo Winery, Stephanie Gallo is charged with overseeing a portfolio of mass-produced wines at the nation's largest wine company. And if you ask her, there couldn't be a better time to have the job, even if it comes with the added pressure of having your family name on the bottle.

Gallo Family Vineyards' new ad push, 'For All Your Families,' highlights the idea that people in the U.S. have a broad definition of family.
Gallo Family Vineyards' new ad push, 'For All Your Families,' highlights the idea that people in the U.S. have a broad definition of family.

Eight family members work for the marketer, including Ms. Gallo's father, Joseph Gallo, who is CEO. Ms. Gallo was raised in Modesto, Calif., the company's headquarters, and the wine business has always been a part of her life. Growing up, her dad sounded her out on everything from packaging to brand-name advice. She worked internships in various parts of the company before landing her first full-time job at Gallo at age 22, when she took an entry-level sales job in Chicago.

While attending graduate school at Northwestern University, Ms. Gallo remembers people encouraging her to explore other companies. But "at the end of the day I could not see myself getting passionate about soap or pet products," she said. "What I was passionate about was carrying on the mission of what the founders started."

"I've always been fascinated with the role that the Gallo brand has played in American society," said Ms. Gallo, granddaughter of Ernest Gallo, who founded the company in 1933 with his brother, Julio. "[Their] mission was really to democratize wine. They believed 80 years ago that wine was not an elitist beverage." It took a while, but "we are just starting to see that," she added.

Wine grows, beer slows
Wine is emerging as a social beverage on par with beer, as millennial consumers shed the snobbery once associated with the category, which is growing at a healthy clip. Wine sales increased 5% last year to $39.3 billion, according to Euromonitor International. And wine now accounts for 16.9% of total alcohol supplier revenue, up from 15.8% in 1999, while beer fell to 48.8% from 56%, according to the Distilled Spirits Council of the U.S.

Stephanie Gallo, VP-marketing, E. & J. Gallo Winery
Stephanie Gallo, VP-marketing, E. & J. Gallo Winery

Millennial consumers are "not tied to traditions that have usually governed wine, and it's because they are drinking wine at a social level," Ms. Gallo said. Unlike previous generations, young adults will try anything, including wine served over ice, from a screw-top bottle or even out of a box.

Euromonitor forecasts wine-category volume growth of 15.9% between 2012 to 2017. Ms. Gallo's job is to ensure that Gallo participates in that growth. The company already controls the largest wine brand in the U.S., Barefoot, which saw sales grow 16.6% in the 52 weeks ending Sept. 8 to $540.6 million, according to IRI. Gallo is trying to boost sales even further with a line extension called "Barefoot Refresh," which is lightly carbonated and designed to be served over ice in varieties such as "perfectly pink" and "summer red."

"The key insight there was that wine consumers were leaving the wine category to have their "refreshing' needs met," Ms. Gallo said. Barefoot wants to lure them back with a proposition that once would have been frowned upon: wine on the rocks.

Shifting media
The positioning is an example of Gallo's larger marketing strategy, which is to push wine as a social beverage, not one reserved for special occasions or formal dinners. The approach is apparent in the company's media strategy, where the majority of ad buys are now with media properties that cover topics like celebrity news, sports or pop music. "In the last five years wine has come out of the food and wine pages and has now inserted itself as part of popular culture," Ms. Gallo said.

Gallo in recent years has also shifted its emphasis to digital and in-store marketing. "The reality is that we compete in a very, very fragmented category and to effectively and efficiently reach our consumers, we have moved away from television advertising and more toward targeted advertising," Ms. Gallo said.

The company's newest campaign is for its namesake Gallo Family Vineyards brand, which is priced at about $5 a bottle and is the nation's seventh-largest wine brand at $154.9 million in sales for the year ending Sept. 8, according to IRI. The campaign, called "For All Your Families," is rooted in the idea that "people today in the United States have families that are not necessarily related by blood but by common interests and activities," Ms. Gallo said.

Digital video ads, created by BBDO, San Francisco, show groups of people bonding at the bowling alley, hair salon or by dipping into an icy cold lake, polar-bear-club style. The centerpiece of the effort is an interactive digital "crest creator" that allows users to design custom crests, filling the medieval family symbol with modern images representing shared hobbies, interests and favorite foods. Digital ads directing viewers to the site will be placed on tvguide.com, usmagazine.com and liveleak.com, among others.

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