Marketing: Gallo Says Bonjour

America's biggest winery is blending foreign grapes with U.S. salesmanship--and scandalizing the industry. Will wine become homogenized?

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But Gallo's success with the French Red Bicyclette has terrified some wine aficionados, who are worried that the globalizing wine market will become defined by dumbed-down wines, homogenized for simple American taste buds. To purists, a wine's flavors should be determined by terroir--the taste of the land where the grapes grow, the minerals in the soil, the amount of sun, wind and rain to which the grapes are exposed. "Authenticity is important," says Italian enologist Stefano Chioccioli. "We already have China invading us with products with no history. Wine is the fruit of man, but it is connected to the terroir. It is important to maintain that sense of differentiation." It's not that the best French Burgundies and California Cabernets are losing their terroir. Instead the critics are crying foul over mass-produced wines that hog the grocery-store shelves. A new documentary has poured gasoline on the debate: Jonathan Nossiter's Mondovino is the wine world's Fahrenheit 9/11, an indictment of big corporate wineries that Nossiter claims are killing wine's soul. To such critics, Gallo's international brands are as scary as McDonald's Golden Arches.

Most people who buy Black Swan or Red Bicyclette probably don't realize they are drinking a Gallo wine. The Gallo brand appears nowhere on the labels. But Gallo's partnerships with international wineries--in Italy, Australia, New Zealand and France--account for an estimated 10 million cases of the company's sales. (That's still a puddle compared with the ocean of California wine Gallo produces every year--65 million cases in 2004, or half of all grapes grown in California.) Gallo formed its first partnership 10 years ago when executives saw how Americans who had been guzzling Chardonnay were looking for other dry white varietals. Pinot Grigio, with its light, fruity style, was a natural choice, and much of the best came from Italy. Gallo struck a deal with Cavit, an Italian cooperative. The result was Ecco Domani, which sold 900,000 cases last year. Cavit now produces two other successful Italian brands for Gallo.

The purists are right that Gallo takes a nontraditional approach to selecting which wines to distribute. It asks consumers what they want--which is second nature in most industries but not the wine biz. Gallo interviews thousands of American wine drinkers every year, inquiring about the flavors they like and their buying habits. The company has used those data to craft flavor profiles for all major wine types. Each profile is a three-dimensional grid charting the possible flavors and consumers' reactions to them. Gallo's winemakers are then encouraged to craft wines that will get a favorable rating and be consistent year after year. (Among the unsurprising findings in Gallo's research: Americans like to drink their wine "young"--to buy it and have it that night at dinner--rather than store it for years to bring out the flavor.)

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