Earlier this month, Gallo of Sonoma County (California, US) sew up a distribution alliance with the Lalit Khaitan-promoted Radico Khaitan. The latter has set up a 350-men strong International Brands Division to market, for starters, Gallo's wines throughout the country. The problem: Gallo may be setting the table in the US, but unlike other parts of the world, India does not have a culture of drinking wines.

Compared to a market of 66.5 million cases per annum for Indian-made foreign liquor (IMFL), the wine market is estimated at 5 lakh cases per annum. Since this includes the cheap port wines (from Goa, for instance), the relevant segment would be even small, say, at 3.5 lakh per annum. Says Richard Moore, Director of International Sales, E&J. Gallo Winery: ''We are here to help develop the market with Radico.''

That would be easier said than done. Nevertheless, Gallo plans to develop the market by building consumer awareness and inviting consumers for testing. What's encouraging for Gallo is that Indians, especially the young and the upwardly mobile, like wines. A study by Gallo reveals that Indians see wines as a beverage of moderation, and are increasingly growing aware of the health benefits of red wine.

Riding on this awareness, the latent demand and the first-mover advantages, Gallo plans to corner 25 per cent of the 5 lakh cases per annum market by ensuring that quality wines are available to consumers at all price points. Adds Amar Sinha, President, Radico Khaitan, Gallo's Indian distributor: ''We want to be present at every price point, from the low-end (Rs 400) to the premium end (Rs 1,500) of the market.'' To ensure that, Gallo plans to bring in 15 brands into India to suit different pockets.

The brands to be launched includes Ernest & Julio Gallo's Carlo Rossi, one of its popular brands; Turning Leaf, a contemporary premium Californian wine; Wine Cellars, which highlights the true varietal nature of grapes; Andre, a popular sparkling wine, and Gallo of Sonoma County, crafted from the select varietal California grapes, one of the most coveted viticulture areas.

What makes Gallo so special is its family-owned structure and the passion with which the family runs the business. Ernest, the eldest brother, who oversaw the winery's sales operations in its early days, often worked 16-hour days and took long sales trips around the country by car. In 1936, he reportedly was hospitalised six months for exhaustion. The tradition continues with Julio's grandchildren (Julio died in a car accident in 1993), Matt (35) and Gina (32) Gallo, personally supervising operations.

Over the years, Gallo has emerged as the political powerhouse---the Gallos learned the value of political connections as they built their wine empire and dealt with liquor regulators at the national, state, and sometimes county levels---has given millions of dollars to candidates of both the Republicans and the Democrats. But for all its success, the business has in some ways kept a low profile. Eighty-six year old Ernest Gallo gives few interviews and the winery offers none of the tours and tastings found at other California vineyards.

Gallo may have a strong value proposition in the US, but can it generate the reasonable volumes in India? To be sure, it's not really looking for volumes; all it wants is to seed the market and build on its first-mover advantage. The locally-produced wines cost Rs 300-400, with the cheaper port wines available at Rs 90-100. The imported wines, with Customs (100 per cent) and countervailing duties, would cost upwards of Rs 400. With the premium ones coming even dearer (Rs 1,500). Will there be takers at these prices?

As Gallo will have 15 brands straddling across the price spectrum, Sinha is confident of rustling up the numbers. For, unlike the Scotch whiskey market, which is stagnating at 1-million cases per annum, wines would start at a higher base (5 lakh cases per annum). And wine drinkers, paying Rs 300 for a locally-produced wine, may not mind paying higher prices for quality, imported wines. What's more, the per capita consumption of wines in India is 0.007 litres per annum, compared to a per capita consumption of 60 litres in countries like Italy and France.