September 1, 2015 – The wine community is reeling from the announcement last week that longtime local icon Talbott Vineyards had been purchased by E. & J. Gallo Winery of Modesto, the world’s largest family-owned winery. Gallo was founded in 1933, and today owns more than 80 unique brands and produces award-winning wines and spirits featured in more than 90 countries around the globe.
On the face of it, the purchase makes all kinds of sense from Gallo’s standpoint. Not only is Talbott one of the most recognized names in the wine world, but the Sleepy Hollow Vineyard in the Santa Lucia Highlands is one plum piece of succulent and storied real estate. This absolute gem of a property, complete with a beautifully restored guest house that the winemaker Dan Karlsen and Sales and Marketing VP, Matt Viotto, had put a great deal of effort into reviving, amps up Gallo’s SLH presence significantly.
Gallo already owns hundreds of acres in Monterey and this purchase gives them the added leverage they might need should they decide to pursue an extension of the SLH AVA, which would most certainly be in their best interest.
The outcome of the purchase remains to be seen, but it could mean that many employees will be impacted. Winemaker, Dan Karlsen, has been retained for a 6-month consulting contract to help see them through harvest, which just began, and a few key cellar staff will remain as well. Some tasting room staff have also been retained, but most of the marketing and sales team will certainly be eliminated.
Viotto says that 75k to 80k cases of the 135k case production in 2014 were allocated to thousands of restaurants across the country. One hopes that these wines will remain on those wine lists, but it would not be surprising to see more of the Talbott wines in supermarkets going forward. They already have a significant presence in Safeway.
Robb Talbott began Talbott Vineyards in 1982, and acquired the famed 525-acre Sleepy Hollow Vineyard from Jerry McFarland in 1994.
Says Kelly McFarland, Jerry’s son, of the purchase, “I’m still wrapping my head around it, but I think it’s going to be good for business, good for the region. It brings added credibility to the area. Gallo is a great, well-established family. We’ve worked with them for years, and they are the best at what they do. They’re dedicated to constantly experimenting and exploring, and looking at ways to get better.”
He said he wouldn’t be surprised if both land and grape prices went up as a result.
In a statement provided by Gallo, Robb Talbott was quoted as saying, “After more than 33 years dedicating my life to the establishment and growth of Talbott Vineyards, I am pleased to transition ownership of our wonderful company to E. & J. Gallo. They represent the same commitment to quality that has been part of our heritage since the beginning,” said Robb Talbott. He added, “My family and I are grateful to all of those that have been part of the journey, and are confident that the future for Talbott Vineyards will be secured by E. & J. Gallo.”
Commenting on the sale, long time Arroyo Seco winegrower, Ann Hougham of Mesa del Sol, had this to say, “Rob Talbott was one of the foremost wine gods in Monterey County. We can thank him for helping to elevate our county’s wines to world class status. I will miss his sage advice.”
The acquisition augments Gallo’s existing presence and properties in California’s Central Coast wine region and includes the Talbott brand, the winery on River Road and the 525-acre Sleepy Hollow Vineyard. Gallo will continue to operate the Talbott Vineyards tasting room in Carmel Valley. Robb Talbott retains ownership of the Diamond T property where he recently completed a new home.
Gallo already owns thirteen wineries strategically located in wine regions throughout California and Washington. They also recently acquired J Vineyards & Winery of Sonoma.
Among the Gallo brands are Barefoot Cellars, Gallo Family Vineyards and The Naked Grape. Premium offerings include Apothic, Carnivor, Columbia Winery, Edna Valley Vineyard, Gallo Signature Series, J Vineyards & Winery, Louis M. Martini, MacMurray Estate Vineyards and William Hill Estate, along with highly regarded imports, such as Alamos, Allegrini, Brancaia, La Marca, Martín Códax, Pieropan and Whitehaven. Award-winning spirits include New Amsterdam Vodka and Gin, as well as Shellback Rum.
Many we spoke to observed that Gallo appears to be in a radical acquisition mode. It’s certain that the SLH has huge name recognition right now and adding more land here to their portfolio could turn out to be a very shrewd investment.
The sale is scheduled to close on September 4, 2015. Terms of the deal were not disclosed.