Gallo predicts a rough ride in 2010

The UK wine market continues to be a tough place to do business, according to Californian wine giant E&J Gallo.

The company said high taxes and the prevalence of promotions throughout the off-trade means the UK market is unlikely to witness much profitable growth during 2010.

Speaking at a press briefing in London, George Marsden, vice president for Europe, the Middle East and Africa at E&J Gallo, spoke of his dismay at the trend for three for £10 promotions and added that in the wine sector “it is rare that you find a category with less than 80% on promotion. Clearly this is not good for the industry.”

2009 saw the company refocus its wine range around five core brands in response to the difficult market conditions, in a bid to drive “sustainable, profitable growth throughout 2010”.

The producer identified Gallo Family Vineyards, Turning Leaf, Redwood Creek, Barefoot and Carlo Rossi as the key brands that will deliver future growth.

Marsden said: “We restructured our portfolio during 2009 to focus on our five core brands and we are optimistic about our future business in the UK market and the opportunities to drive sustainable, profitable, growth.

“We feel that by offering high quality, value for money wines that are supported by robust, strategic marketing plans and partnerships, we are adding value for consumers and giving them more reasons to choose Gallo brands.”

2010 will see E&J Gallo Winery’s flagship brand, Gallo Family Vineyards (GFV) working with strategic partners in order to drive brand loyalty.

In spring 2010 GFV will launch the Gallo Rosito, a new cocktail using GFV White Grenache.

The brand will be working with mixologist Giles Looker to promote the new cocktail in the on-trade and host a number of trade and bar staff training sessions around the UK over the following months to promote the Gallo Rosito.

GFV also plans to launch a GFV Pinot Noir in the last quarter of 2010 to the UK market.

Last year Gallo re-positioned Turning Leaf as a stand-alone premium Californian brand with revised packaging and improved wine quality.

This year the brand will be involved in collaborations that are designed reinforce the brand’s philosophy of “discover the taste of colour”.

One of the first tie-ups is with the hot fashion duo Basso & Brooke. The collaboration – signifying the first of many partnerships with top design talent – will run for six months and take in the forthcoming spring/summer season.

The winery also believes that its Barefoot brand will be the “one to watch” this year as it continues to build momentum among its target market of 21-35 year olds.

Marsden predicted the brand will be “the number one global brand within five years” and Barefoot is increasing its presence in the UK with sponsorship of many events throughout the year, including the Pride festival and the Secret Garden Party.

Alan Lodge, 10.03.2010