GALLO UNCORKS SOME WINNERS; VINTNER'S FORAY INTO FINE WINES WINS FANS.

Byline: Gregory J. Wilcox Daily News Staff Writer

Anthony Dias Blue, wine & spirits editor for Bon Apetit Magazine, singled out a bottle of chardonnay at a recent tasting at the Century Plaza hotel as one of the top three being made in California.

That a vintage California winery makes a top-flight chardonnay wasn't a surprise. The genie in the bottle is that it comes from a winery more noted for its huge production volume and labor battles with the late Cesar Chavez than its quality.

Blue was praising Gallo of Sonoma Estate Chardonnay.

What's this? A bottle of Gallo with a cork, a double-digit price and medals attesting to its quality?

``They aren't what they were 20 years ago,'' Blue said, succinctly summing up the progress being made at the venerable winery. And as proof, his magazine has named Gallo of Sonoma the winery of the year.

For years, it was a stretch to blend the words ``Gallo'' and ``fine wine'' into the same sentence. Hearty burgundy, which for many baby boomers was one of first reds they took to the dinner table, tasted OK but it came in a jug with a screw top, neither of which are the characteristics of a quality vintage.

So when a new generation of Gallos took over operations of the family's fine wine operations earlier this decade, they were determined to produce wines from the company's Sonoma County facility that would rank among the state's best.

Today those bottlings are adorned with a simple ``Gallo of Sonoma'' label and in some cases price tags that at first blush appear to have been grafted from a bottle of vintage French Bordeaux. One retailer in the San Fernando Valley is selling the 1992 estate cabernet sauvignon for $55. That's per bottle, not a case.

And some of the wines rank among the best in the world, according to experts.

The upscaling of the jug wine producer seems complete.

``Great wine grapes are fragile things,'' said Gina Gallo, who is making the wines at the Dry Creek Valley vineyard with the help of Marcello Monticello, a veteran Gallo vintner and friend of her grandfather Julio. ``The basics of wine making are simple, but we are not making simple wines.''

The Gallo of Sonoma label debuted in 1993; the winery produces eight brands with the Estate designation to mark its top-of-the-line. Those with the Gallo of Sonoma label - merlot, zinfandel, cabernet and chardonnay - are priced in the $9 to $10 dollar range. Other brands also include Turning Leaf Sonoma Reserve varietal and Rancho Zabaco zinfandel and chardonnay.

Wines from this facility account for about 10 percent of the production at Gallo, the world's biggest producer. The company makes one of every four bottles sold in America.

Gina Gallo grew up around wine and decided to make it a career while in high school. She worked a variety of jobs at the privately held company and received her wine-making training at the University of California, Davis.

The family ate together nightly at 7 o'clock, and oftentimes knowledge was consumed along with a glass of one of the family's wines.

``The way I was brought up, (wine) was a part of the dinner table. And a lot of things can be learned around the dinner table,'' Gallo said on a recent visit to Los Angeles. ``And I really appreciate and learned the value of work ethic by seeing the hours my grandfather put in.''

Those lessons seem to be paying off, and critics, at least, are taking notice.

Last year, Gallo of Sonoma was named winery of the year at the San Francisco International Wine Competition. The 1995 Estate Chardonnay won best in the world at the International Wine & Spirits Competition in London.

The Wall Street Journal, in its weekly wine column, raved about Gallo of Sonoma's 1992 and 1994 cabernets late last year.

``They have started off on very solid footing, and they've gotten great ratings . . . in blind tastings. The production to date has been by and large outstanding,'' said Marvin R. Shanken, editor and publisher of The Wine Spectator, considered by many enthusiasts as the industry bible.

Industry analysts also note that creating a new brand identity at the world's biggest producer comes as the market is shifting. Wine sales in the U.S. have generally been trending up for more than two decades. Sales, including imports, totaled $3.3 billion in 1975 but had reached $17 billion last year, according to figures compiled by the Wine Institute, a San Francisco-based trade group.

And while last year saw a drop in shipments of California's popular-priced jug wines, sales of upscale premium varietal wines boomed, the institute said.

For example, sales of California wines priced above $7 a bottle jumped 14 percent last year on an annual basis, and this segment has grown threefold in the last seven years. The category accounts for only 19 percent of the state's production, but 44 percent of revenues, the institute said.

``When you go into a supermarket you will see that the premium wines are getting the shelf space. The jug wines are down below at your feet,'' said Cyril Penn, editor of The Wine Business Insider, an industry newsletter published by New World Wine Communications Inc. in Sonoma.

This is the segment that Gallo is now courting. And while there are about 800 California wineries doing the same sort of thing, there seems to be potential market share for everyone.

``They've seen that they need to expand just from the jug wines, and so far they seem to be doing a good job of it,'' said Marc Wright, publisher of The Wine Investor in Hollywood, a newsletter geared toward wine industry executives.

Making good wine is one thing. Selling it is a different matter. And the new generation of Gallos knows it will take some work to overcome the jug wine past.

``That's the baggage. But evidently people have an open mind and are judging the product on its own merits. There is quality in the bottle, and it's selling very well,'' said Shanken of The Wine Spectator.

To this end, Gina Gallo has recently started appearing in a series of television ads promoting the company's line to Generation X.

And the Gallo name will remain part of the company's fine wine operations.

``I think the family name helps,'' she said. ``It's important. That's my heritage, and that's who we are.''

CAPTION(S):

2 Photos, Chart

PHOTO (1--Color) The Gallo of Sonoma label adorns the fine wine line.

(2--Color) Using a wealth of knowledge picked up around the family dinner table, Gina Gallo makes fine wines at the Dry Creek Valley vineyard.

Gus Ruelas/Daily News

CHART: FLOWING

The tonnage of California grapes crushed for wine has increased 17 percent in the '90s.

SOURCE: Wine Institute

Bradford Mar/Daily News