Gallo targets Millennials

E&J Gallo has unleashed a multi-million pound assault on the Millennial generation with three major UK product launches, including a new vodka brand.

The California-based producer is adding range extensions to its two biggest brands in the form of Gallo Family Vineyards Spritz, a pair of fruit-flavoured wines, and Barefoot Refresh, which features three expressions.

The company also plans to “reinvigorate” the UK vodka category with its New Amsterdam brand, which arrived in this market last year but will form a priority focus for Gallo in 2015.

“It’s all about Millennials,” said Bill Roberts, Gallo vice-president & general manager EMEA, as he outlined the company’s plans and priorities for the year ahead.

He set this push against a backdrop of 7% volume growth for Gallo wine brands in the UK off-trade last year, compared to a -1% decline for overall US wine sales in this market.

Despite this growth, Roberts remarked: “There are still a lot of people, particularly younger people, who are intimidated by wine.” Following extensive consumer research by Gallo, he observed: “there are people who aspire to the sophistication of wine, but find they don’t always like the taste. We want to break down that barrier.”

With this aim in mind, the company will launch Gallo Family Vineyards Spritz into the UK off-trade this May. The 5.5% abv style will carry an RRP of £5.99 and features two expressions: a white Pinot Grigio-based passionfruit and pineapple flavoured style and a Grenache rosé flavoured with raspberry and lime.

Although flavoured wine is not yet a major category in the UK, it has already proved popular in France thanks to products such as Moncigale’s Rosé Pamplemousse and Haussmann Famille’s Rouge Sucette, which incorporates cola. Earlier this year Echo Falls launched an alcohol-free, tea-infused sparkling wine in the UK.

Gallo will be supporting the launch of Spritz with a £1 million programme of advertising, social media activity and sampling opportunities.

As for Barefoot Refresh, following its launch in the US the range is currently available in Tesco but is due to begin wider UK off-trade distribution next month. The collection features a “Crisp White”, “Crisp Red” and “Perfectly Pink” expressions with an abv of between 9% and 10% and an RRP of £6.99.

“A lot of people find wine flavourful but not refreshing,” commented Roberts as he introduced the new range as a way to encourage consumers into wine from categories such as cider or RTDs.

Describing the Barefoot brand, which sold 18.1m nine-litre cases globally in 2013 to make it the largest bottled wine brand in the world, as a “gateway” into wine, Roberts noted: “About one third of consumers who purchase Barefoot are new to the category.”

With its third UK product launch, New Amsterdam, Gallo is planning to entice Millennial consumers away from more established mainstream vodka brands. Having launched in the US back in 2011, New Amsterdam is now the country’s third biggest selling vodka brand, according to Gallo.

“One of our biggest priorities this year is establishing ourselves in the vodka category,” Roberts told the drinks business. Describing the brand as “a home run for us with Millennials,” he remarked: “no one is really speaking to them. You have brands like Belvedere and Cîroc but they are a much more premium price.”

Taking its title from the original name for New York, New Amsterdam is made from 100% US grain, is five times distilled and triple-filtered. Despite flagging up its resulting “smooth” character, Roberts remarked: “It’s more about the image’ the bottle is the hero.”

Introduced to the UK last year, New Amsterdam carries an RRP of £16 and will be a major focus for Gallo’s 2015 activity with more than £2m-worth of marketing activity due to take place over the next few months, based on the tagline “It’s your town”.

Although the New Amsterdam brand also features a gin brand, Roberts suggested that there were no imminent plans to introduce this to the UK market, preferring to set its sights on the country’s vodka opportunity.

“Vodka is an 8m case category just in the off-trade and we feel that with the success we’ve had with New Amsterdam in the US there are enough similarities that we can build a terrific franchise here,” he commented.

In addition to these launches, Roberts highlighted ongoing activity for existing products such as Apothic, which recently carried out a campaign based on Twitter psychoanalysis. Reporting that the brand’s sales hit £1.7m last year, Roberts noted: “Californian premium wines really under-index in the UK so there’s a real opportunity.”

Following last year’s launch of two Moscato wines, Roberts claimed that Gallo and Barefoot accounted for a combined 71% of the UK’s £22m Moscato category, which grew 70% last year.

Despite this significant increase, Roberts admitted: “I would have hoped it would have been bigger by now because it’s spot on for today’s consumer.” Noting that Gallo’s rosé Moscato expression had so far proved more popular than its white, he confirmed “a lot of momentum” for both styles.