E. & J. GALLO WINERY
SEPTEMBER 29, 2011
Dessert wines are not an essential segment of today’s wine industry, although they are a money maker. In 2006, only 92 million of the total 716 million gallons consumed were dessert wines. Dessert wines are also no longer an important segment of the E. & J. Gallo Winery, although they were an integral piece of the company’s history of success. It is laughable that the Gallo brothers took over the family’s vineyard and decided to get into the wine making business without knowing anything about the process. It is ironic that the company’s first phenomenal success – Thunderbird, a cheap but potent dessert wine – is today nowhere to be found on their website. It is as if the company wants to disassociate themselves from that part of their history, which is understandable. Outside of dessert wines being a cash cow, they do not seem to have many redeemable qualities. There is likely a small market of people who actually enjoy dessert wine, but the tastes of today’s society in general have changed. Most people are not drinking wine for dessert; they are drinking it with their meal. The segment of today’s society that drinks dessert wine consists primarily of alcohol abusers and college students looking for a cheap way to get drunk. To be successful in the dessert wine market these days, the product must be affordable and readily available. Notably, this is in sharp contrast to table wine, which has a completely different set of success factors, likely because that market is very different. Gallo has historically studied the behavior patterns of wine drinkers and adjusted their distribution strategy accordingly. For example, knowing that a large portion of their dessert wine market receives government checks, they would place larger, more expensive bottles out for sale at the same time their checks were typically distributed. At the end of the month, typically when funds would run low for...
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