The breaking news in the U.S. wine industry recently was the announcement that E. & J. Gallo of Modesto, California, had purchased Sonoma-based brand Souverain and the Asti vineyards from Treasury Wine Estates.
It was Gallo’s second eye-popping purchase in the past couple of months. Gallo bought J Vineyards & Winery, best known for its superb sparkling wines and a delicious Pinot gris, earlier in the year. And recently Gallo has added import clients such as Italy’s Allegrini, an important winery in northern Italy’s Veneto region.
This is the same Gallo that popularized jug wines in the United States post-Prohibition. Gallo has worked mightily to shed the jug-wine image, although it should be noted that in its day, when jug wines were thought by some to be California’s only contribution to the wine discussion, Gallo’s jug wines were the best around.
In recent years, Gallo has added such premium brands as MacMurray Ranch (Russian River Valley), Louis M. Martini (Napa Valley) and William Hill Winery (Napa Valley). The addition of J Vineyards and Souverain strengthens that hand.
And the hundreds of acres of vineyards that came in the Souverain deal will likely strengthen Gallo’s more modestly priced offerings. What must be remembered is how Gallo won the jug-wine wars.
While most wine companies that produced jug wines sourced grapes from California’s Central Valley and other lesser grape-growing regions, Gallo always had vineyards in Sonoma County that were used to boost the quality of its wines made from mostly Central Valley fruit.
I liken it to the Burgundy model. The finest Burgundy producers often reserve a small amount of their grand cru wine to blend with their premier cru wine, thus lifting the premier cru offerings. Then some of the premier cru wine would be reserved for the village wines, thus lifting the village wines.
Of one thing I am certain: the most recent acquisition will serve Gallo wines well, now and in the future.
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