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  • 1. Gallo: The Wine Revolution Michael McGuigan Robert Douglas Chris Grant Michael Hurcomb Andres Cordoba

2. Thomas Jefferson the Patron of the American Wine industry The Agricultural Society of Albermale County (1817) Wine consumption fast growing in the 19th century The Dry Period (1919-1925) The three-tier system (Manufacturer, Wholesaler/Distributor, Retailer/Consumer) Ernest & Julio Gallo (Pioneers of the Vertical Distribution Network) The Wine Industry in the U.S. 3. Gallos Vertically Integrated Supply Chain Model 4. Mergers, Acquisitions, Horizontal Integration and the Supply Chain 5. Vertical & Horizontal Integration Benefits The firm has greater control over its products and can push the products that are more profitable. A-B-C classification of items and the firm can push their A and B products rather than rely on the retailer. Vertical The firm continues to do what it does best while delegating others to take care of the other processes. Horizontal Integration is what enabled wineries to explore buying locations outside of the U.S., while also expanding its own domestic product to the Global population. Horizontal 6. The Three-Tier System Manufactuter Focus on the production process and the way it is marketed. Distributor Middle person between winery and retailer Determines how to transport the products Warehouses the product for period of time Retailer Determines what products to buy in order to satisfy consumers needs. Mark up the price to a suggested retail price On promise and off premise locations 7. Consolidation of wineries and distributors (last 20 years) Direct to Consumer sales (DtC) Distribution Service Centers (A-B-C) Grapevine Portal (intergrade multiple business systems)Innovation The supply and demand in wine is often hard to predict Forcing wineries to become more horizontal integrated Port Labor Union strikes Stagnant economy - increasing taxes regulations - grape and fuel costs. Challenges Innovation & Challenges 8. Thank you!