Gallo muscles into premium wine sector

By Helen Arnold

Published: 25 February, 2014

E&J Gallo is aiming to grow its share of the premium end of the wine market with the launch of two new brands, Dark Horse and Apothic Red, despite the fact that the average spend on a bottle of wine in the UK still hovers around the £5 mark.

Californian wines currently account for 13% of all wines sold in the UK, but only 5% of premium brands, which represents a great opportunity according to Gallo vice president and general manager EMEA, Bill Roberts. "There is a big gap, which we need to close," he said. "There is an opportunity here to change consumers views on Californian wine."

While UK consumers were prepared to spend more than £7 on a bottle of wine, and they were interested in broadening their repertoire, California hadn't to date delivered a brand they felt comfortable with, according to research conducted by Gallo. "They just need the reassurance of the right brand, and a wine they could feel confident in at the right price point." To fill that gap, Gallo have launched Dark Horse Cabernet Sauvignon and Chardonnay which retail at around the £8.99 mark, and will be supported by extensive consumer sampling, PR, money off coupons and in-store activity. "We feel that Dark Horse delivers on the pack and on the taste, and that in that plus seven pound category these wines meet the needs of the target consumer."

E&J Gallo's new Darkhorse brand, targeting the more premium end of the market with a price tag of £8.99.

Apothic Red, a blend of five varietals which was launched last November in Sainsbury's, retails at £9.99 and has "wildly exceeded" expectations, according to Roberts. "It is very different from previous Gallo brands, and very polarising." It is now stocked by every major grocer, and an extensive consumer sampling exercise is planned at six major railway stations around the UK. There are currently no plans to introduce Apothic white into the UK, which is available in the US. "We need to build on the red first,' said Roberts.

Another major focus for Gallo is Moscato, which grew by 38% last year, and has added £20 million to the wine category over the past two years. "Our aim is to continue to grow the Moscato category with the launch of Gallo Family Vineyard Pink Moscato this May. We want to make Moscato this season's must have wine, and we have a full range of initiatives to support the launch, including social media, an active online campaign, and competitions. There is definitely a market in the UK for these sweeter style wines," confirmed Roberts. However, he conceded that there was much work to be done as most UK consumers were not familiar with the varietal.

To tackle this, a sampling programme at a number of lifestyle events such as the Ideal Home exhibition aims to reach 300,000 consumers this summer.

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