In Search of Younger Consumers, Gallo Winery Turns to FCB

SAN FRANCISCO – E&J Gallo Winery, the world’s largest winemaker, has grown nervous about a younger generation of consumers who don’t drink wine and has turned to Foote, Cone & Belding/S.F. to reach out to their future market.
Officials at Gallo and at FCB would not confirm or deny the project, but sources at the agency said Gallo approached FCB creative Mike Koelker because of his work for Levi Strauss & Co.
Koelker will produce four TV spots, which if Gallo likes, will begin airing in test markets. Though Gallo does not officially call them agency of record, Dailey & Associates/L.A. handles Gallo’s wine, Bartles & Jaymes wine coolers, Tott’s sparkling wine and Gallo’s brandy business. In total, Gallo spent $30 million on advertising in 1992, according to LNA.
Last week, among rumors of FCB’s work for Gallo, the winemaker reassured Dailey that their relationship will continue.
Current Dailey ads feature a dinner party where guests are surprised to learn the fine wine they are drinking is Gallo. The tagline is, ‘It will change the way you think about Gallo.’
‘It has nothing to do with what we’ve been doing. Our advertising has been incredibly successful for Gallo,’ said Phil Joanou, chairman/ceo of Dailey. ‘They’ve told us it’s been the most successful advertising they’ve had for their wine product and the campaign continues.’
But Gallo’s advertising has failed to win a new generation of wine drinkers and that is the concern. In 1991, people under 30 consumed 25 million cases of wine, less than 10% of the market. That compares to 35 million cases or more than 17% of the market in 1980, according to Fred Walters, research director for M. Shanken Communications, publishers of the alcohol trade periodicals Impace and Market Watch.
Tom Pirko, president of Bevmark Inc. in L.A., said the problem is that people under 30 view wine as esoteric and forbidding.
‘It’s alien and foreign to them and I’d say the biggest reason is because of Gallo,’ said Pirko, who criticized the winemaker for not having invested the type of ad dollars aimed at younger consumers the way beer makers have done. ‘When you look at the failing of America’s wine industry, you lay it at the doorstep of the Gallo Brothers. They retarded the entire growth of an industry. They were the only ones in a position to build the category.’
Copyright Adweek L.P. (1993)

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