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How to outmarket the Gallos
By STAFF Daniel Seligman, David Kirkpatrick, Patricia Sellers, H. John Steinbreder

(FORTUNE Magazine) – It's supposed to be impossible. But Edgar Bronfman Jr., heir apparent to his father at Seagram Co., seems to be edging out the dynamic duo of marketing, Ernest and Julio Gallo. Under Edgar Jr.'s direction, Seagram's wine cooler business is suddenly sparkling, and the company is challenging E.&J. Gallo Winery for the lead in the estimated $1.7-billion market. Gallo's Bartles & Jaymes brand outsold Seagram's coolers during the first half of 1987, but Seagram, a distant No. 4 last year, bounded to No. 2. Now Seagram is outselling Gallo in a number of America's largest markets, according to Marvin Shanken, editor of Impact, a beverage industry newsletter. How did Seagram score against the usually indomitable Gallo brothers? Bronfman, who runs Seagram's wine cooler and spirits businesses, pushed for a broad product range -- five flavors (including wild berries and peach) vs. Gallo's two. Equally important is Seagram's advertising campaign featuring Bruce Willis, one of TV's hottest stars. Before joining his family's company in 1982, Bronfman, 32, produced movies and television programs and married actress-model Sherry Brewer. He spotted Willis on ABC's Moonlighting back in early 1985 and picked him as the ideal cooler pitchman before either the actor or the show caught on. The commercials are fashionable and upscale -- emphatically unlike Bartles & Jaymes's folksy Frank-and-Ed ads. ''Seagram went the high road and expanded the cooler category,'' says Shanken. ''Gallo may have made a strategic mistake.''