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Gallo's newfound interest in beer and renewed emphasis on developing a deliberate route to mkt thru traditional beer/malt bev distribs are just getting started, Gallo cco Britt West indicated at our Beer Insights Seminar in NYC last week. From prospects of acquiring a brewery and more beer/malt bev brands, acquiring more RTDs (at the right value), evaluating its route to mkt across its portfolio, and innovating and/or partnering with intention to build brands thru these networks, Gallo continues to make moves in traditional beer spaces. "If We're Going to Be Serious About Beer, Why Wouldn't We" Consider Buying a Brewery/More Beer Brands? Just over 1.5 yrs since Gallo, the largest wine co and #1 RTD spirits co, acquired Montucky Cold Snacks beer brand, Montucky is gaining steam, up 72% in Circana data for a recent 4-wk period while on premise remains "very healthy." Asked if Montucky, currently contract-brewed with City, could look to acquire a brewing facility down the road, Britt simply asked "why wouldn't we?" "If we're going to be serious about beer, why wouldn't we be serious about brewing?" That "absolutely" could include buying a brewing company altogether, adding to the beer portfolio and providing production capacity, Britt acknowledged. "I think scale for scale's sake would be dangerous." But "if we can see a runway and a path to a consumer where we believe that Gallo could bring its strengths to bear, I think that would make all the sense in the world for us." It helps that ceo/next gen family member Ernest Gallo is "a man of science" who loves the chemical and engineering nature of alc bevs as "a real passion point," said Britt. "We'll see as it unfolds."Gallo's a Top 10 Malt Bev Growth Co in Scans; ~300 New Wholesalers Added in a Year; "Evolving" Route to Mkt Gallo's already a top 10 beer/malt bev growth company by $$ in tracked off-prem data this yr. Sales grew 74% to $8.9 mil in these channels. But that's not all Montucky. Ten Ball 10% ABV FMBs "might be my favorite brand in the portfolio," Britt highlighted, gaining traction in southeast mkts. It's "the one in our portfolio that nobody talks about that actually we're very internally excited about." Malt-based versions of Pink Whitney are also bolstering trends in scans, INSIGHTS found. And "we should have more coming soon" in the malt bev space, Britt hinted. The malt bev team is "small and mighty" at this stage as Gallo's still learning how to "speak the same language" after adding a whopping 300 new wholesalers in the course of a yr. But alc bev route to mkt is "an evolving landscape, and we will evolve with it," Britt promised. "We have been very clear with our traditional wine and spirits wholesalers that we are consumer-centric first&hellip;and if you cannot get us to market to our consumer, we will find somebody that can." And "if people don't believe that Gallo will make the change, we did it to" company-owned distrib in NJ with High Noon, he emphasized. "We pulled the brand from them because they weren't meeting the needs of where our consumer was."High Noon Slowdown Came a Bit Earlier than Expected, but Co Was "Prepared for That" After skyrocketing since 2019 to leadership position in RTD spirits, High Noon volume is declining nationally this yr, reportedly soft in various mkts across the country. Sales are down 5-6% YTD thru Nov 8 in natl NIQ off-prem data. But "we did expect this," said Britt. "Anybody who doesn't understand the RTD cycle hasn't paid much attention to history," he quipped. The slowdown admittedly came about a year earlier than co anticipated, but "we were prepared for that." Britt referenced Smirnoff Ice as a poster child for longevity of RTD growth prospects, pointing to the way a brand can "shoot up" and "peaks" before it "comes down," then find the "right base, and then you start to build and innovate and grow off of that." Virtually all RTD brands have gone thru these cycles, he noted. Now with High Noon, co needs to think about how the playbook evolves into the future, said Britt. There are "still gaps" in innovation oppys, tho Gallo's been "fairly disciplined" in its approach by avoiding high ABV or full flavor. The future of High Noon is about understanding "where can the brand stretch" and where can it "be authentic," but "not pushing it" where it can't, and finding a different brand "to fill those other needs," Britt stressed.A Look Back at Smirnoff Ice's History; Exceptions to the Rule in the Flavor Game Smirnoff Ice launched in 1999-2000 and peaked at 1.8 mil bbls in 2002 (nearly hit 2 mil bbls in 2004 including short-lived Smirnoff Twisted Vine), only to fall off considerably over the next decade. Volume bottomed out at just ~700K bbls in 2013-2014 before gradually starting to grow again since the mid 2010s, INSIGHTS estimates. Impressively, volume has grown almost every yr since, rising to 1.5-1.6 mil bbls in 2023-2024, and currently up 1% YTD in 2025 tracked off-prem channels. Other brands like Phusion's Four Loko and more recently Mark Anthony's White Claw and AB's Ritas have gone thru similar exercises of dropping from their peaks, finding their base and building back/stabilizing from there. Yet these are more of the exceptions to the rule in the flavor game. For most, once the declines start, there's no turning back.Other RTD Seeds Planted with VMC, Lucky One, Salt Point & More; "Fairly Robust" Innovation Pipeline Stable of RTD brands like VMC Cocktails, Lucky One vodka lemonade and Salt Point have Gallo's RTD portfolio still hummin' as a whole. In fact, "we are further ahead in volume on Lucky One in year one than we were on High Noon" (which sold 600K cases in yr-1). VMC already sells 1 mil cases/yr in CA alone, INSIGHTS understands, and has caught on especially with Hispanic consumers across key states, Britt highlighted. Salt Point is gonna be "a juggernaut for us" in CA next yr with oppy to expand regionally, he added. And other RTD acquisitions like Waterbird and Fisher's Island faced challenges as they rightsized distribution and/or rebranded, but both still have "a role to play."Then too, innovation and R&D resources are "fairly robust." Across all alc bevs, Gallo's "playing a different game" than most large suppliers when it thinks about innovation, focused on building multi-generational opportunities, he underscored. And Gallo continues to look at M&A oppys. A lot of RTDs are currently overvalued in Britt and co's view, as the RTD lifecycle is a tuff one, and often times the math just "doesn't work." But lately folks are "coming to reality in the RTD space," he believes, and "that's attractive to us." Asked whether Gallo views NA bevs as a potentially meaningful growth avenue going forward, he replied: "yes." And questioned on which is a higher priority for Gallo between beer and spirits, Britt quipped "both." Indeed, spirits portfolio also continues to grow, and while Gallo's largely stayed outta M&A in traditional spirits, that's not to say they wouldn't consider being more involved in that arena too, he posited. "We believe we can continue to take share" and "there are a lot of categories we're not in."For 25+ Yrs "Nobody Was Worried About Recruiting the Base" in Wine and "We're Seeing the Implications of That" Wine is "in an interesting moment," and the lesson here, that spirits biz "learned the hard way" too, is that dollars were going up for the last 25 yrs and "nobody was worried about recruiting the base" consumers. "And that's just a fact," he said emphatically. With Boomer generation aging out of drinking as much, "we are seeing the implications of that," and it will be "a serious road to a turnaround," he acknowledged. But Gallo remains the #1 wine co in the country by far with 19 share of category $$ and 25 share of volume in NIQ scans. So wine remains the most important leg of its total alc bev stool by a longshot.

Gallo Means Bizness in Beer & Beyond; "Prepared" for High Noon Slowdown; Stable of RTDs Gaining Ground

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