Is Gallo about to change the idea of winery tasting rooms forever?

Winery tasting rooms have traditionally been about Drink Local; Gallo’s plan could turn them into the wine equivalent of Disney stores

June 16 update: Bring on the Barefoot! The world’s biggest wine producer successfully negotiated the hurdles detailed in the first post and will build its warehouse, cannery, and bottling plant in rural South Carolina.

South Carolina Gov. Henry McMaster says the plan will hire almost 500 people over the next eight years, an impressive achievement for a county with around 1,000 residents.

The final agreement will allow Gallo to open three tasting rooms, but the company has not said where they will be.

Make no mistake: E&J Gallo’s proposal to build a $400 million bottling plant, cannery, and distribution center in South Carolina is huge news. But what seems like an afterthought to the plan may turn out to have even more long-lasting ramifications for the wine business, local wine, and Drink Local.

Gallo also wants to open winery-branded tasting rooms in South Carolina, perhaps as many as three. In doing so, it would turn the 70-year-old definition of a tasting room upside down. No longer would tasting rooms be local, showcasing wine made in a specific region. Rather, they would become the wine equivalent of a Disney store, with national brands showing off their product anywhere in the country – with little regard for what makes wine local.

In this, it’s a challenge to the traditional winery tasting room that affects Napa and Sonoma producers as much as it does those in less well-known wine regions. If you can one day visit a Gallo tasting room in Las Vegas, New Orleans, or Branson, Mo., why bother with actually going to a winery tasting room?

“Gallo doesn’t do anything small,” says Russ Kane, a Texas wine writer who has been at the forefront of Drink Local for most of the movement’s existence. He calls the idea of national brand tasting rooms almost unprecedented, noting that “once you cross this bridge, how do you go back? Why not tasting rooms in places like Vegas and Miami or Fredericksburg in the Texas Hill Country? Gallo isn’t going to all this trouble just to open tasting rooms in South Carolina.”

Lots and lots of clout

Gallo is the world’s largest producer; its products may account for one out of every four bottles of wine sold in the U.S. A Gallo spokesman declined to answer questions submitted by email for this story. Instead, he offered a statement:

“E. & J. Gallo Winery is constantly reviewing the strategic options of its business in order to meet growing global demand; toward that end, we are exploring potential investment opportunities on the east coast. Nothing is finalized at this stage and a final decision has not been made at this time. We remain focused on producing, marketing and distributing quality products for consumers to enjoy.”

In one respect, the surprise is not that Gallo wants to open tasting rooms outside of its California wineries. Rather, it’s that someone didn’t do this years ago. In a 21^st century cultural and business climate where best and highest use trumps all, the idea of a winery tasting room in a winery in a wine region seems almost quaint.

“This is a new paradigm,” says Bill Oliver, whose family-owned Oliver Winery in southern Indiana has used the traditional tasting room model to become one of the 30 biggest wineries in the country, making almost 800,000 cases of wine a year. “Would I like to have a tasting room in Branson, Mo.? Absolutely.”

South Carolina lawmakers have not yet approved the Gallo proposal, which requires a series of tax breaks for the company to agree to the project. In fact, there has been surprising resistance from a group that includes anti-alcohol lawmakers, craft beer and spirits producers, liquor retailers, and political gadflies. In fact, there is a chance – albeit a small one – that Gallo won’t get the tax incentives it wants and will back out. The tasting rooms have been one of the sticking points, since they would require significant changes in state liquor law. (Liza Zimmerman at Wine-searcher did an excellent job parsing the political part of the story.)

I’ll continue to follow this story, and will update blog subscribers if and when something changes. Gallo certainly has the right to open company tasting rooms anywhere it wants, the law permitting. The more important question: Is what’s good for Gallo also good for wine?

Photo: Kelsey Knight on Unsplash