ĭuring the 1980s and 1990s, E & J Gallo bought wine labels from Europe and Australia. In 1983, for the first time, the company put a vintage date on one of its wines, the 1978 Sonoma Cabernet Sauvignon. (One of these helped to popularize "Hymne", composed and performed by Vangelis, by featuring it as background music in some of its television commercials.) The company's 1960s ads were focused on associating their US-made wines with Europe's fine wine regions. They pioneered wine advertising on television and launched many wine advertising campaigns. They were also first to establish a truly significant foreign sales and marketing force to export California wines overseas. They were first in breakthrough quality initiatives such as long-term grower contracts for varietal grapes and grape research programs.
Ernest and Julio were the first to introduce brand management and modern merchandising to the wine industry, and led the way in bringing new products to store shelves. Later, the US market began to move away from cheap wines. In 1962, E & J Gallo launched the one gallon finger-ringed jug of cheap wine, Red Mountain, later Carlo Rossi Red Mountain, named after a winery above Oakdale that closed during Prohibition. In 1957, E & J Gallo launched the fortified cheap white wine Thunderbird. On the first year of activity, the brothers had produced 177,000 gallons of wine. They had just one tractor, and would run it permanently on 12/12 hour shifts. Julio was focused on the production of wine, and Ernest on its sale. The brothers learned the craft of commercial winemaking by reading old, pre-Prohibition pamphlets published by the University of California which they retrieved from the basement of the Modesto Public Library. Their starting capital was less than $6,000 (~$110,000 inflation-adjusted to 2017), with $5,000 of that borrowed by Ernest from his mother-in-law, Teresa Franzia. Ernest and Julio were competing against larger, more established, and better financed companies, including more than 800 wine companies established in California in the first few years after the repeal of Prohibition. The two brothers started the winery in the fall of 1933, following the repeal of Prohibition. He wrote that he and Julio were “grape growers with over 400 acres of grapes.” Ernest applied on this letterhead to the Board of Alcohol for approval. They had stationery printed that included two designations next to their name: “winery” and “grape growers and shippers.” Their father's estate owned both the grape growing and shipping businesses as well as the vineyards required to establish a winery, at that juncture.
Ernest and Julio then took steps to bond a winery in the name of their newly formed partnership, E & J Gallo. And in order to be bonded as a winery, he had to own vineyards. He was advised that in order to open a storeroom, he had to own a bonded winery.
On June 20, his application was rejected. On June 14, 1933, Ernest Gallo filed an application with the Prohibition administration to open a bonded wine storeroom in San Francisco. During Prohibition in the United States, Ernest and Julio Gallo grew grapes and sold them to eastern states where home winemaking was allowed.
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