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Friday, December 18, 2015

Gallo Expands in Napa Valley

2015 has been a busy year for E&J Gallo. In Sonoma County they've bought J Winery and the old Asti Winery. J is into premium sparkling wine and Pinot Noir. Asti is a large production facility. Gallo is the largest vineyard owner in Sonoma County (with Kendall Jackson a close second).  In Monterey County Gallo bought Talbott Winery with over 500 acres of vineyards.

Next door in Napa Valley Gallo already owns Louis Martini and William Hill wineries plus about a dozen more premium West Coast operations.

They have just purchased a custom crush facility in Napa, The Ranch Winery. "Custom crush" means they supply the equipment and labor for other wineries to make their product. This is a fairly common practice as many smaller operations can't afford the capital expense of starting their own winery. Large wineries can use them for excess capacity.

Why did Gallo buy a custom crush outfit? For the same reason as the Asti property in Sonoma -- space to make a lot more premium wine. What happens to the people using The Ranch Winery now? Gallo probably doesn't care much about supporting some guy making a thousand cases a year so they'll have to find somewhere else once their contract the The Ranch Winery expires.

You'll be seeing a lot more premium wine from Gallo in the coming years.