Case 25 E & J Gallo Winery

The dessert wine segment is very crucial for the players in the wine industry because it comprises a significant percentage of almost 13% or 92 million gallons out of the 716 gallons of wine sold in 2006.  For E & J Gallo Winery, the dessert wine market served as its bread and butter in its first few decades in the industry.  Moreover, the profit margin of this segment is relatively higher at 10% and its market share is compelling. Gallo’s strategic positioning on the quality of its products contradicts its continuous production of Thunderbird and Night Train to cater the low-end market.