Detailed Show Notes: 

Jeremy’s background: restaurants, wholesale, importing

TX became a major wine market during ‘08 Global Financial Crisis; it took the allocations from NY and CA

Somm.ai founding: end of 2019 was originally an app for people to find restaurants with wines they wanted to drink; during the pandemic (2020) pivoted to turning restaurant wine lists into retail shops (sold ~$700k of wine); did some smart menus; 2021 launched current iteration of on-premise sales analytics

• Categorizes restaurants, bars, & hotels in US (100k accounts), Canada, Europe (6 countries, Germany largest w/ 3k accounts), Singapore; data updated every 2 weeks
• Jackson Family is longest client - w/ NBA partnership, Somm.ai developed target lists around NBA stadiums to sell into
• ~70 clients of all sizes (many large suppliers, e.g. - Terlato, Vintus, Concha y Toro, wholesalers, importers)

General use cases include: 

• Benchmarking vs peers (accounts, placements)
• Prospecting and lead generation (can see accounts that other distributors cover)
• Identify brand extensions
• Help with pricing
• Identifying sales pitches for national accounts

ROI

• Some clients have moved up a lot in benchmarking ranks
• Save money on travel, focused on the right markets
• Can save manpower

Pricing ~$30-70k/year avg, includes unlimited training and unlimited seats, US and Canada (other geographies are an upcharge)

Product roadmap - expanding to more geographies, which can be temporary exclusivity for early partners

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Detailed Show Notes: 

Fine wine trends (March 2026)

• A trend towards more collaboration and consolidation
• Entering the age of precision distribution, after precision winemaking and viticulture
• Shrinking middle class is shrinking the middle sector of wine
• Some retailers in the UK doing well by changing delivery policy (e.g. - free next day delivery at 1 bottle, new events relevant for new consumers)

New ARENI Study: The New Fine Wine Consumer - How People Under 40 Embrace Fine Wine

• Studied several major markets: Paris, London, NYC, Singapore, Shanghai, & Hong Kong
• Research process: expert led roundtables, questionnaires, & interviews / focus groups with consumers and trade
• Did focus groups in Paris & London of wine student groups (e.g. - LSE, Kings College); LSE’s group is 600 members and do 50 events/year with a £400 budget and 50 students attending each one

Study key insights

• Pool of fine wine drinkers is shrinking; demographics driven (less young people, wealth concentrating)
• Routes that create fine wine consumers (e.g. - tech and banking) are replacing internships w/ AI
• Results very similar across markets (a surprise)
• It’s friends, not family that drive wine interest
• Complexity of what’s not understood and the pursuit of knowledge being worthy and fun drives wine interest
• Visibility and ease of access to wine are important
• Restaurants are still important, but the high cost is an issue

Collectors are different from buyers

• Collectors have a reward system (e.g. - dopamine) from the chase
• Everyone has a genetic disposition to collect, but activated in 30-35% of the US population
• Collecting makes people overbuy, which requires a secondary market
• Reducing prices after en primeur can erode the trust in the reason to collect
• The French have a negative association with being a collector
• Young people often spend ~10-15 hrs/week searching and researching wine when they are collectors
• Differences are bigger between genders than nationality; wine collectors defined when 26-35, when women often start a family or build their career and don’t have the time to collect
• Only men reported a benefit from wine knowledge at work
• Events are a good way to test if people can be engaged with the brand
• Collectors learn about producers not regions (Asia different because certifications are important); want to know which producers, why they are important, and where they can be purchased

To trade up in wine, their community needs to trade up with them

Need to sell a community to drink with, not just the wines

Women historically have less propensity to become collectors

• Often have less access to money and drink 3-4x less than men
• Similar at the beginning (44% of <25 year olds engaged in wine, goes down to 7% around 40); it’s not an interest problem, it’s a conversion problem
• Women overindex in education, events, and the importance of community
• They never ask for a female only space, they don’t mind age or gender, but need to share interests (e.g. - similar spending power and interests)
• Successful events have thoughtful placement to create connections b/w people, including to be seen by interesting people; requires knowing all the people who come

Next for ARENI: restaurants business models and consumer expectations for fine wine and an update on US distribution

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Detailed Show Notes: 

Josh’s background: 5th generation in the wine business, including NY liquor stores and distribution

Israeli Wine Producers Association overview

• ~40 wineries (of 450 total) are members
• Mission is to promote “Brand Israel”
• Founded by the Herzog family, of importer Royal Wine Corp
• Funded by the wineries and Royal Wine Corp

Israeli wine overview

• Making wine for ~5,000 years
• Wines were exported to the Romans
• Growing Israeli food scene has helped
• Grape varieties: Cabernet Sauvignon, Chardonnay, many others including ancient grapes and new grapes, e.g. - Argaman, a genetically engineered crossing of Carignan and Souzao, designed to have a “crimson” color as referenced in The Bible
• Climate: lots of micro-climates, Mediterranean climate, lots of farming
• Soil types: varied, including volcanic, terra rosa, limestone
• Tends to be tech forward in farming and winemaking practices

Wine consumption in Israel

• Growing, consume most of domestically produced wine
• Big use for religious purposes
• Created wine tourism industry to grow wine knowledge in the country
• US is #1 export market by far, majority in the NE (top markets - NY, NJ, Miami (fastest growing), LA, Chicago, TX); followed by Canada, Europe, South America

Total Wine has an Israeli wine section different from Kosher section

“Brand Israel”

• About discovery, stories of the wineries and something different
• Good QPR
• Connects to multiple religions (e.g. - Easter is a large wine consumption event and Easter is about Israel)
• People often respond saying “Israel makes wine?” (e.g. - at South Beach Food & Wine)

All wines in the group are kosher, but kosher is not the focus, just a beneficial attribute

Judaism has lots of holiday and events with wine integrated (e.g. - Shabbat)

Majority of Israeli wine sales in the US are off-premise, trying to push more on-premise

Israeli politics can go both ways, some people don’t buy and others want to support

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Detailed Show Notes: 

Erni’s background: Managing Director Loosen Bros, Dr Loosen Estate in Mosel; took over in 1987

Loosen Bros overview & history

• ~200 years in the family
• Only Riesling in the Mosel (Dr Loosen)
• 1996 bought Villa Wolf in Pfalz
• 1999 JV w/ Chateau Ste Michelle (Eroica), largest Riesling producer in US
• 2003 founded Loosen Bros USA in Portland OR as an import company for Loosen wines, then imported other people’s wines; desired to have more flexibility (e.g. - deciding on lower margins due to tariffs)
• 2005 Appassionata (OR Pinot Noir)
• 2009 purchased 40 acres in Willamette Valley, planted vineyards, and built winery
• 2015 JV w/ Telmo Rodriguez (a big Riesling fan) in Rioja w/ Lanzaga
• 2017 1st vintage of JV w/ Peter Barry in Clare Valley Australia to see if Oz Rieslings were always limey; tried 3,000L barrels - Wolta Wolta
• 2019 took full ownership of J Christopher in OR
• Burgundy purchased part of Vieux Chateau de Puligny-Montrachet to start Perron de Mypont and started a negoce
• 2023 founded Dr Loosen Int’l China

A great wine starts w/ an idea in your head

For successful JVs, need the right partners with real passion and the same vision

• Need to see the spirit from the beginning
• Has never had a business plan

JVs are not one way, but learnings on both sides (e.g. - Erni learned how to delay ripening in WA)

• Erni’s goal for JV’s was not making money, but trying to create a Renaissance for Riesling, which used to be the most expensive wine in the world ~1900, but got a low quality image w/ Blue Nun and Liebfraumilch

Most partnerships structured as 50/50 and handshake deals (except Eroica is 40% Loosen, 60% Chateau Ste Michelle, which is also the only contract)

• Key challenge of JVs are when two visions don’t fit, had one that went bankrupt

Would love to do an Alsatian Riesling at some point

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Detailed Show Notes: 

Sunny’s background: exposed to wine from 6, wine educator with Lady Penguin in China, Wine MBA, wine consultant for restaurants, board member of AWAA

Philippe’s background: exposed to wine from 3, worked in wine auctions, then went to UC Davis and is a vineyard manager and winemaker as well as operations for Vinus Club

Vinus Club is a wine club focused on introducing wine to Asian consumers, including a wine dinner series

Asian food: texture is a big focus, meals often have a diverse assortment of food at once, often need more than 1 wine to pair

Wine w/ at least 5-6 years of age are more accessible to a wider array of flavors and spice vs the pure fruit of young wines, more complexity helps for pairing

Spicy foods work well w/ wines w/ a denser mid-palate that buffer the alcohol

Philippe’s first challenge with Asian food and wine was at UC Davis with spicy hot pot

Eastern palates tend to be more sensitive to acid and more into texture (e.g. - the texture of Petite Sirah attractive to Eastern palates)

Pairing suggestions

• Aged Alsatian whites (15-20 years old) work well, they have texture, complexity, and mid-palate to buffer the spice
• Smargad Riesling w/ a few years of age pairs well w/ Singaporean food
• Braised duck and Barolo
• Flor de Muga Blanco’s aging process adds texture
• Orange and volcanic wines work for younger wines
• Champagne w/ a large amount of reserve wine
• Jura wines a natural fit for a lot of categories
• Nicolas Joly’s Coulee de Serrant w/ ~15 years of age often pairs well, but also shows a lot of variation

Hardest pairings: 

• Korean food; often has a hint of sweetness, hard to balance w/ wine
• Indian cuisine

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Detailed Show Notes: 

CT now at 1M registered users, with monthly active users +40-50% since 2021

• Team has grown from ~10 employees during Covid to ~25

Launched new mobile app 1.5 years ago (2023)

• ~10k reviews in Apple App Store / Google Play with a 4.9* rating
• More modern, visual
• For subscribers: enhanced drinking windows, tasting notes, AI features (chatbot for wines you like, pairings, etc…)
• 3x users registering on monthly basis vs 2021
• Continue to support old app to be more customer centric and work out bugs in the new app

Improved data analytics; overhauled drinking windows, valuation of wines, “what’s poppin” identifying when people are opening wines

Winery analytics: trialed with a couple wineries

• No obvious product market fit
• Wineries interested in what other wineries were in cellars with theirs
• One CA winery had 40% of their mailing list on CT

Historically did no marketing

• Doing more social media, email engagement
• Some paid search, App Store optimization is the biggest driver

Get feedback on what improve with Frill, users can vote on improvements needed and pair it with product usage and usage flows

New features on the horizon

• Starting in-app notifications
• Developing research tool to identify what wines to buy and how much to pay (aggregates price data from reports and ~50% of users report price paid)
• Making AI embedded natively in the application

Add via receipt feature automatically adds (using AI) wines to cellar if you email add@cellartracker.com

• Product pricing
• Was early adopter of “freemium” model
• People were confused by historic “voluntary payment,” only 1/1000 users could say what features are paid
• Added more value to paying users (e.g. - drinking windows, AI features; including some things that used to be free), doubled user pay rate
• Suggesting what to pay is more hidden now
• Can get an annual subscription on website, monthly on Apple App Store w/ 2 week free trial (Apple takes a cut and must cancel through Apple)

Consumer trends

• People looking for values (e.g. - they ask “what’s a cheaper version of x?”) and diversity of wines
• Not seeing a lot of changes in user patterns (e.g. - consumption)

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After 40 years, Roederer Estate, the Californian arm of Champagne Louis Roederer has really started to hit its stride.  Arnaud Weyrich, SVP and Winemaker of Roederer Estate and Xavier Barlier, CMO of MMD USA, discuss its history, trajectory, and how Roederer Estate continues to create more reasons to believe in the brand and the wines.  This belief is grounded in a vision to make wines that look and taste like Champagne, but with Californian roots. 

Detailed Show Notes: 

Arnaud’s background: interned at Roederer Estate (“RE”) in 1993, returned to winemaking team in 2000

Xavier’s background: Moet Hennessy, Renault, Disney, then Roederer Marketing & Communications

Roederer Estate in context

• Louis Roederer founded in 1776, began exporting to US in 1860-70’s
• 1980s - acquired Anderson Valley vineyards and built Roederer Estate winery
• Maison Marques & Domaines (“MMD”) founded 1987 for launch of 1st vintage of RE and distribution of Louis Roederer
• RE founded because during 1980s, not enough Champagne made to supply growing US market and land was cheaper than France; could also do the estate model, which was difficult in Champagne
• Anderson Valley had the right weather, track record of other quality, local wines (Chardonnay, Riesling, Gewurztraminer), and inexpensive land (was known for apple orchards)

RE production

• 1st harvest 1985 (80s challenged by legal problems for wine w/ sulfite content)
• Late 80s-early 90s - 40-45k cases 
• Mid-90’s-2000 - ~80k cases (bolstered by French paradox, internet boom, young chefs, and “sommelier” becoming an English word)
• 2025 - ~100k cases
• Limited by estate model, remote part of CA (tries to attract talent by providing subsidized housing for 90% of staff, invested $3M over last 10 years)

CA sparkling history

• Pioneers supported each other (e.g. - Schramsberg, Domaine Carneros, Iron Horse)
• Downturn in market (1987 stock market crash, 1989 phylloxera hit vineyards)
• Market reaction positive, particularly after Schramberg wine served by President Nixon in China at the 1972 “Toast to Peace”

RE launch pricing

• Champagne was priced <$10/bottle in 1980’s, created glass ceiling for CA sparkling
• RE priced $2-5 below Champagne
• RE always wanted to look and taste like Champagne (used same varieties, techniques, including reserve wine)

Accolades helped establish a “reason to believe” for consumers

• RE awarded Wine Spectator Top 100 12x since 1998 (#5 in 2019, #20 in 2024)
• Roederer philosophy to do “as little marketing as possible”
• 2 types of marketing: 1) consumer focused, doing focus groups and market studies; 2) invisible marketing (e.g. - Steve Jobs), start w/ vision and dream (i.e. - be storytellers)
• RE is more product driven, not market driven; winemaking makes the wine, marketing tells the story

Keeping the brand fresh after 40 years

• Continue adding reasons to believe for RE
• As more is learnt about estate, launching new wines - Rose, L’ermitage (vintage, 1989), L’ermitage Rose (1999), Single Vineyards (2020)
• Single vineyards stem from 600 acres / 100 lots of wine every year; like grower wines in Champagne; wine geeks and sommeliers love it; intimate launch (mostly DTC, some on-premise to create buzz and interest)
• Create a community (e.g. - Arnaud often in market for tastings), turn consumers into clients and then into fans that tell the brand story to others

Price of NV Brut has increased from ~$23 to $30 from 2016-2025

• Be honest, transparent w/ wholesalers (e.g. - labor cost, cost of farming, materials), and give time for changes to work through 3-tier system
• Need accolades and marketing to support the idea that the wine is worth the price (“price fluctuates, value endures”)

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Detailed Show Notes: 

Co-hosts: Byron Hoffman, Tyson Caly, Co-CEOs of Offset, a wine e-commerce platform and brand studio

Peter’s background: helped managed wineries (Realm Cellars, Kosta Browne, CIRQ Estate) which used Offset’s e-commerce platform, including managing the allocation systems and then consulting for other wineries; McKinsey; co-author of Luxury Wine Marketing, which has high-level strategy around allocations

Allocated Wine Offering course

• More operational strategy for allocations
• Goes through the entire offering process
• Includes some benchmarks of key metrics

Are allocations still relevant? Yes, for 1) scarcity or desired perceived scarcity and 2) large number of SKUs (hard to do a wine club)

Allocated Offering definition: allocation (limit to purchase) + offering (distinct time frame to buy)

One of the oldest allocated offerings - Vega Sicilia

Other industries that use allocations: watches, cars, sneakers

Uniqueness of wine allocations: price per bottle relatively low, number of bottles relatively high compared to other luxury goods, regulation of alcohol → has made wine allocation systems more advanced

Timing of offerings clustered at key times (“spring” and “fall”), alternatives tend not to work as well

Best practice examples: timing of offerings, wish setting strategy

Supply-demand balance makes a difference in what strategies to use

Allocation methods: 

• Offering types: first come, first serve; guaranteed allocation; order request; wine clubs; hybrids
• Allocation types: group based or individual
• Napa winery started first come, first serve and group based; winery got several 100 point scores, e-commerce system crashed, created buzz and scarcity, and customer service issues amongst old customers; system evolved to guaranteed allocation with individual allocations; led to 40% more customers buying

Most important factor in allocations: creating value in allocations (waitlist, secondary market premium, loss of value if they don’t buy)

Hybrid models: e.g. - Shafer sold high production wines in online store/club, Hillside Select was allocated; adding multiple models increases operational complexity

AI automation for allocations: could do targeted marketing, might be able to create allocations, likely won’t create allocation rules

Setting allocations is quick for first come first serve / group based allocations, more complex individual / guaranteed allocations take longer, but can be accelerated with templates and formulas

Predicting and identifying potential good customers challenging because wine interest is not easy to determine and not correlated with wealth

RFM (recency, frequency, monetary) a way to prioritize customers 

Leveraging unique experiences to wine buying and building community can drive performance

Managing waitlists (e.g. - Sine Qua Non sent a postcard / letter / email every offering to let people know they couldn’t buy wine; intro offerings can engage people right away; drip campaigns also work)

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Detailed Show Notes: 

Selling on-premise takes more time, need to present the wine, sell 1 case at a time, but more marketing value

ROI skews towards off-premise if you ignore brand equity

Calera / Kosta Browne targeted 65-70% on-premise, but hard to enforce

• Can’t tell distributor where to sell since they own the product
• If retailer asks for it, some states legally require it be offered

Selling off-premise chains

• Rely very little on distributor, need to build relationship on your own
• If brand is small, can use agents/brokers or distributors to get initial discussions
• Takes patience and perseverance, and need a compelling story
• Big retailers don’t care about the winemaking process, they care that customers will buy the wine

In-store displays

• Retail product managers fight with each other for displays
• If displays don’t deliver value, they will lose floor space to others
• Constellation research: most product pulled from shelf, not displays; displays act as powerful billboard for shoppers

Shelf placement

• Cold box similar to displays - limited real estate, hard to get in and get the desirable locations
• Need to communicate to wholesaler merchandising teams where you’d like to be (e.g. - x shelf next to y competitor); need to keep message simple
• Stick w/ message for ~2 years, takes a long time to see impact, needs patience

Large on-premise accounts

• Look at ACV (volume) to identify top targets
• Similar to off-premise with limited real estate (wine list slots) and they need the wine to sell
• Can take fewer wines vs off-premise (2-4 max)
• Longer lead times, programs can be 1-2 years, need to be ready when windows open
• BTG great, but creates some pricing complications
• Need to show up where buyers are, e.g. - major events like Pebble Beach or Aspen Food & Wine

Decoy’s success driven by off-premise

• Safeway in CA launched brand, then went to other regions and retailers and grew from there
• Duckhorn brand equity gave Decoy a springboard to launch, but was able to stand alone and now most Decoy drinkers don’t know the tie to Duckhorn

Price increases

• Get all the data you can (competitor, consumer behavior, demand elasticity)
• The nuances of consumers and differences in brand equity are impactful
• Any decisions take time, may not affect retailers for ~120 days, could take 6-12 months before you see an impact

Discounting

• Key for the grocery channel
• Discounting should be done after all other options exhausted
• The more it happens, customers think that’s the price of the product, erodes brand equity

Impact of marketing on sales

• Duckhorn did very little traditional marketing, mostly sales support (spent ~1.5-2% of revenue)
• LVMH spends ~30% on marketing, CPG average is ~10% of revenue
• Did some testing of advertising in 1 market for 1 year and measured impact to determine if it should be expanded
• Partnerships w/ other products good for grocery channel, can often secure displays

Advice for a tough wine market

• Set up production to align w/ honest and believable sales plan
• Long-term impacts of cutting opex will hurt growing the top-line

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Detailed Show Notes: 

Duckhorn went from 50k cases / ~$5M in revenue / 14-15 employees (1995) to ~$500M revenue (2024)

The Duckhorn Portfolio

• Duck themed: Duckhorn Vineyards (1978), Decoy (2nd label originally), Paraduxx (1994), Goldeneye, Migration, Canvasback
• Acquisitions: Calera (2017), Kosta Browne (2018), Sonoma Cutrer (2024)

Keys to Duckhorn’s success

• Brand equity - focused on Merlot, which was hot in 1980s-1990s and catapulted winery
• Key assets - #1 people, #2 brand equity
• The French Paradox (1991) created big demand for red wine
• Table stakes are good scores, showing up in the market, hosting guests

Sales team grew from 1 person to >100 (~85 in the field)

• No perfect way to calculate ROI for sales people
• 1st method: too many cases & distributors to manage, needed more people
• 2nd method: quantified expected incremental sales from more people (data was full of holes)
• Final method: managed to target of 8-10% sales opex / revenue, because a KPI for SLT and Board

Sales team roles

• Regional Managers, over a series of states (50-60% of time working w/ distributors, the rest out in the market or internal analysis and reporting)
• District Managers, geographically concentrated, go into accounts you want to be in
• National Accounts, on and off-premise; a challenge to determine which accounts are national vs regional, ended up doing it case by case and assigning accounts

Distributor consolidation led to wineries needed to do the work they cannot do

• E.g. - identifying underrepresented accounts and coming up with action plan by region

Identifying top salespeople

• Look at overall contribution margin for the region
• Share of business in market (using IRI, distributor reports, account base)
• Gross Profit%, identifies amount of trade spend used
• How responsive they are, their handle on the market, their decision making
• #1 method: do they bring new ideas to the table

Incentivizing salespeople

• Bonuses must be meaningful (25-35% is meaningful), higher for higher levels
• Look at contribution margin relative to budget
• Used a curve (<90% budget - no bonus, above budget - scale increased, which helps end of year motivation)
• District Managers may have market specific goals (e.g. - increasing depletions, PODs for particular products) that are short term (3-6 months)
• Overall, incentives are difficult to manage, data can lag; make it objective
• Recognition is helpful, e.g. - unexpected gifts like a signed 3L from the CEO

Distributor collaboration best practices

• Show them a plan and explain why it makes sense (e.g. - buyers are lined up) and get mutual agreement
• Keep it simple, the info needs to be passed on to others
• Identify what you’re prepared to do in the marketplace (e.g. - market visits, funding BTG programs, incentives, etc…)
• Do monthly check-ins and more formal quarterly reviews to see progress against plan and to adjust tactics and strategies

Optimal size of sales territories

• Depends on # of distributors in region (e.g. - TN had 8 distributors = 8 days/mo of meetings)
• Try to align with target sales opex / revenue ratios (~8-12%)

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Detailed Show Notes: 

Luisa’s background: hospitality, marketing; started in the family business at 23; spent 3 years in a global rotation program

Amorim Family Estates

• 3 regions in Portugal (Douro, Dao, Alentejo)
• Each property has its own winery and team and does hospitality with a culture and food component
• Division of bigger Amorim cork company and family

Mirabilis (part of Quinta Nova)

• Produced white wine from the beginning (2000)
• First an unoaked white, then a reserve, then Mirabilis (Latin for “marvelous”)
• White was not popular in Portugal at the time, production processes were not set up for whites
• Took 2 years of experimentation, 1st vintage 2011 (2,000 bottles)

Whites still have pricing barriers vs reds

Douro white differentiation: close to Atlantic, schist soils, native grapes, and blending

Introducing Douro whites: older people were harder to get on board, younger were more open to exploration

Need to have belief in product and its viability over having a detailed marketing plan

Marketing focus has been on teaching Portuguese wines (including culture and traditions)

Geographic focus for Mirabilis

• Portugal 1st - need to be well respected in the home country
• Switzerland, Benelux (lots of Michelin Star restaurants)
• Not Scandinavia (targeting higher end of the market)
• Brazil (speak Portuguese)
• USA, Canada

5 people, based in Portugal, work internationally; travel 3-5x/year to each market

While design and packaging, price positioning are important, the sales team and their relationships are critical in the wine industry

Having a good wine is more important than press or reviews, people are paying less attention to reviews

Consumers now look at peers and friends for recommendations and they need to trust the wine producer

Social media - “should be doing more” - hiring younger people into marketing

Wine marketing needs to capture the “soul” of the wine

• Make things simpler, less technical talk
• More provocative, “sexy” vs saying the same thing all wineries say

Has not done any paid advertising

Relies on word of mouth (people taste, buy, and talk) and partnerships

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Detailed Show Notes: 

Background: grew up in the Italian countryside, studied at UC Davis, learned the wines of the world working at Corti Bros in Sacramento

Frescobaldi family

• 30 generations in wine
• Now in Tuscany, Northern Italy, Oregon, & Sicily
• Focused only on wine

Ornellaia overview

• Cabernet Sauvignon, Petit Verdot, Merlot based
• Bolgheri not historically known as a wine region, not good for Sangiovese
• Sassicaia, Orenellaia, & Masseto put Bolgheri on the map
• From year 1, quality was consistently good
• Founded by Antinoris, Mondavis invited Frescobaldis to partner (Feb 2002), when Mondavi sold to Constellation (2004), Frescobaldi bought out Ornellaia (April 1, 2005)
• Frescolbaldis have long-term view, have owned Castiglioni since 1052

Distribution is mostly allocated due to limited quantities

• Consistent in giving allocations to people who bought the year before
• Grew distribution globally to maintain scarcity
• Focused on top restaurants first, get in the right accounts

3rd party validation (wine critics, famous artists, top restaurants) key to building reputation

Vendemmia d’Artista

• Great artists interpret the wine
• Each vintage given a name (e.g. - power, elegance)
• Partnership w/ the Guggenheim globally introduces wine to art collectors
• Artist label on large formats and 1 bottle of each 6 bottle case

Ornellaia Blanco

• 1st planting by Antinori was Sauvignon Blanc
• Cooler, north facing site, small amount produced
• Aged same amount of time as red, not aromatic, but complex

Monitors secondary market to help learn about wine’s age ability, if prices dropping, implies inability to age

Not sure if people buy Ornellaia from seeing it on social media, but allows winery to connect directly to customers

Negative macro market conditions and trade wars not impacting Ornellaia much, 3rd wine (Le Volte) more susceptible, but haven’t seen impact yet

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Detailed Show Notes: 

David’s background: started as a winemaker (Europe, SoCal), sensory evaluation for Hublein (now Diageo), post-MBA marketing job with Baron Philippe de Rothschild, Mondavi in France (see Mondovino movie), managed Byron, then CEO of Opus One, now President of Joseph Phelps

The goal is to create personal relationships and care about mutual success and partnership with accounts

“Focus is the hard part” - at Opus, initially London, Hong Kong, Japan; then emerging markets, Mainland China, Dubai; Phelps also prioritized Korea

• Singapore distributor told him, “We’ll see you in 5 years, the French come every year.”
• Track people who buy wine and meet w/ them - 80/20 rule, focus on the top 20% of trade accounts
• After the top 20%, do second tier of accounts, then collectors
• Travelled ~65% at Opus One
• Budgets ~20-30% of marketing expenses for building relationships
• Opus One 1st 10 years - went to Asia, Canada, Europe every year, then put someone in Tokyo and Hong Kong
• Sends ~400-500 handwritten holiday cards to partners with specifics about their last visit
• Travel team includes a winemaker if they like it and are good at communicating, and a marketing team to better understand the market
• Please don’t make it feel anonymous, but give the meetings and message personality
• At Phelps, focused on Insignia and current vintage, show older wines to show aging potential

The goal is to expand export to ~30-40% in 10 years vs. 12-13% of Insignia today

Brands need to think deeper about what’s unique and also where they are going

• Get alignment between the story, the wine in the market, and where you’re going

The winery owner had three objections to export:

1. sell all the wine to US customers, don’t want to take any away from them
2. don’t know who to sell to
3. don’t want to spend the time and money to go there

Larger volume wines have different commercial relationships, same elements (knowing your partners, need to build), but margins tend to get squeezed

Believes that if the category is successful (e.g., Napa), everyone will be more successful

Negociants (La Place) respond to existing market demand well and are efficient distributors, but it is not in their DNA to build brands

Phelps uses the LVMH distribution network to build the brand and deliver directly to the core accounts

Measures quality of relationships w/ initial feeling, but then seeing the wines go to the market, need to see forward momentum

Tracks Liv-ex pricing a lot, seen upticks in Insignia

Other marketing elements: relationships happen over multiple channels now, need to do more social media, and be part of the discussion

The pricing goal is to have trade and consumer connect the innate value of the wine to the price

The current neo-prohibitionist environment recalls the 80s and the “Mondavi defense” of wine as a potential solution

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Detailed Show Notes: 

French Bloom overview

• 500k bottles (2024)
• Created a premium NA sparkling category
• Focused on sparkling to create complexity, can play with layers
• LVMH minority investor

4 years of R&D to get the desired quality

• De-alc process loses 60% aroma (was 90% in 2021), removes the backbone of the wine
• Built NA wine like Cognac, needs an undrinkable base wine
• Focused on the South of France (warmer, higher alcohol and body) for stronger wines, more body, Languedoc (more organic 40% vs 3-4% in Champagne)
• Limoux is the best place for NA sparkling, 300m high, Chardonnay and Pinot Noir, a temple of natural wine
• Base wine is a bit oxidative, very acidified (used to add lemon juice, now naturally from wine), oaky (new oak, foudre), no sulfites, more tannin
• Create blends of different reserve wines

Extra Brut (0% abv, 0 sugar) has a base of 30% reserve wine from 2 years, aged in new oak barrels to give more structure

Better to make adjustments before de-alc vs after

Use voile to protect wine from oxidation (like Jura)

Flash pasteurization is used b/c no abv, sulfites to protect the wine

NA market

• Wine, beer, spirits - $10B (2020), $20B (2025), believes $30B (2030)
• Premium NA sparkling - $0.5B (2025), could double next 5 years
• Holy grail is quality NA still wine, not there yet
• Best distributors are wine / Champagne distributors, Thailand/Belgium have NA-focused distributors

French Bloom customers

• Biggest markets are Champagne markets (France, US #2, UK, Japan, Australia, Belgium, Germany)
• Younger (25-45), skew female, appreciates both alc and NA sparkling wine

Sells 20% DTC globally

2024 NielsenIQ study on NA purchase behavior - #1 driver - for conscious hosting (aligns w/ French Bloom’s ethos of not excluding anybody); #2 health & wellness; #3 driving

Marketing is digital first, leveraging Constance as a tastemaker and key opinion leader

More partnerships - Coachella, French Open, just signed F1 (10-year partnership, 1st ever official NA sparkling wine, Moet Chandon on podium; F1 new fans are 75% female, 50% Gen Z from Netflix series)

Most effective marketing has been the founding story and authentic storytelling (i.e., Maggie’s pregnancy, Constance’s need for moderation while networking)

Marketing through top-tier restaurants, hotels, and shops (e.g., Michelin-starred; became the #1 wine sold at Erewhon in 1 week)

Michelin-starred restaurants have 50% non-drinkers at lunch, 20% at dinner

No sugar, no additives, organic messaging plays well in California, less on the East Coast

Uses the term “alcohol free” vs. “non-alcoholic”

NA trends around NA wine & food pairing, including “moderate pairing” (wine & NA wine/drinks as part of pairing); mirrored cocktails (3 versions ofthe same cocktail - NA, low, full)

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Detailed Show Notes: 

Adam’s background - started w/ Berry Bros out of high school (2000) at Heathrow Airport shop, moved to Hong Kong in 2010 w/ Berry Bros, Sotheby’s in 2015, Christie’s in 2021

Christie’s is known for fine art, and wine is part of the luxury group (jewelry, handbags, cars), which is 20% of sales, and wine is 10-20% of luxury sales

2025 wine auction market

• Christie’s up 2x YOY Aug YTD, big single-owner sales (e.g., Bill Koch)
• Challenging market mid 2022-2024, newer vintage prices dropping more, more supply available
• In a downturn, buyers’ price expectations fall faster than sellers’
• “Green shoots” in 2025, pricing bottoming out

Burgundy has taken share from Bordeaux last 5-6 years, Champagne came up and leveled off, Italy is strong in the US but not in Asia, Burgundy is strong in Asia, but leveled off

Interest in more mature vintages, particularly Bordeaux, is still valued there

Focus on provenance, people won’t bid on poor provenance anymore

• 2-tier pricing, people paying for a premium for a great collection, single-owner sales, they like the story of who owned the wines

With a more global market than ever, people buy from anywhere

• The US has a broader selection
• Everyone buys from the UK
• Asia tends to need more focus (e.g., Burgundy)

Liv-ex shows -10% pricing last year, -20% last 2 years; auction prices move gradually, often lots don’t sell

More Millennials and Gen Z customers (45% 2025 from 30% 2022)

Female customers have been consistent last 4-5 years, a slight dip in the US, and growing in Asia

Younger generations are drinking younger wines, they like the security of younger wines, have a fear of disappointment in older bottles

Online auctions require ease of use

• Christie’s does 2x online auctions vs live
• Live auctions for key moments, key collections
• Various owner sales in online auctions

Provenance is improving with more communication (e.g., purchase & storage records), people working together (merchants, auction houses), and technology (digital microscopes, UV light, carbon dating)

Provenance is critical, as people remember the bad bottles sold to them over the good ones

Believes China will make a comeback in the next 2-4 years

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Detailed Show Notes: 

Weston’s background: >10 years winemaking in Napa (Silver Ghost), family are wine collectors, interned w/ Jason Moore at Modus Operandi (2012), and acquired extra Chardonnay from Steve Matthiasson

Westborn was founded in 2018, taking “Grand Cru” or single vineyard level fruit for sparkling wine (e.g., Heintz, Ritchie, Durell vineyards)

Partnered w/ Russell Bevan (mentor) and Nathan Reeves (made sparkling in Margaret River)

The goal is to start with high-quality wines and layer on complexity with traditional method aging

Took 4-5 years to find a stride & hone the winemaking process

Initially thought it would be 3 years aging vs 6 for 1st release (2019 1st release; 2018 1st vintage just disgorged mid 2025)

SKUs: vintage, Blanc de Blanc, Rose, Non-vintage

Luxury priced - $100+

Solera method perpetual reserve program, late disgorged release, lead to a lot of capital in inventory

2018: 500 cases; 2025 ~1,000 cases; target ~2,000 cases

Sparkling production costs vs. still wine

• Fruit costs the same (growers love it: less shrivel, gets fruit off earlier - less pest/disease pressure; spreads out the work)
• Press cuts important, ~25% less gallons/ton vs still wine, as they don’t take taille
• Need to make the wine twice: initial fermentation (vin clair), secondary fermentation (bottled with yeast and sugar)
• Custom crush costs are slightly more expensive due to double fermentation
• Bottles are more costly and need to be bought earlier (~$0.15-20 for a standard bottle; ~$1 for sparkling)
• Taxes higher: $2.40/gallon for sparkling wine, $0.07/gallon for still wine <16% abv
• Storage and financing costs are higher

Financing is combined with other brands, which may make it hard to start a sparkling brand as a stand-alone entity

Look at the business plan over 20 20-year time horizon, projecting cash flow positive in 2027 (9 years from founding)

Trends underpinning Westborn strategy: following Michael Cruse w/ grower CA sparkling wine, premiumization, sparkling doing relatively well, sparkling being used beyond celebrations

Take inspiration from Bereche, De Souza (lees stirring in bottle to amp up umami), and Selosse

People looking for experiences have a tasting at The Art Collective Napa Valley

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Detailed Show Notes: 

The Wines of California covers 3 sections: 

• How we got here - the history and what context allowed things to happen
• Where we go - the growing regions and key producers
• What we’re facing - marketing challenges, climate change

Interest in farmworkers started with Salud, a medical program for vineyard workers and their families

• Has mobile and physical clinics
• Successful because it provides care for workers and their families

CA is the largest farm region in the US

• Exports 40% of ag production
• Became nationally relevant in the 1900s, which led to the need for farm labor

Sources of farm labor (in chronological order)

• Indigenous people (until smallpox outbreak and reservations)
• China - exchanged labor for citizenship, after 10-15 years, expelled Chinese with the Chinese Exclusion Act
• Japan
• India
• Black sharecroppers from the South (small group)
• Mango (Philippines)
• Mexico (post WWII) - led to the current H2A program

When labor populations grow and get too big, they are expelled, which has been in ~20-year cycles

H2A Program - temporary work visa program

• Cannot be extended or transferred to another employer
• Employers must provide housing & transportation
• Biases towards big business to deal w/ compliance

FDR (1930s/40s) - Labor Protections Act created worker protections, but excluded agriculture

United Farmworkers (1975) - 1st farmworker protection legislation

Association of Farmers - farm wonders banded together to have more leverage against workers

Ever-growing CA labor regulations create large compliance requirements that end up favoring big business

Current system sets up farm workers’ wages as the only lever for farm owners to maintain profit margins and be economically viable (w/w/o gov’t subsidies)

New CA farmworker overtime pay law - 8 hours/day, 40 hours/week before overtime

• Derived from an office worker’s perspective
• Does not match the seasonal work of agriculture
• Employers have small margins, can’t afford overtime rates
• Workers make less money and need to get 2nd or 3rd jobs
• If workers get injured at 2nd job, workers’ comp does not cover wages of the main job
• Employers need to find more workers to do the same amount of work, and lose the experience and skills of the current workforce

Many crops (e.g., strawberries, peaches) need manual labor and can’t be mechanized

ICE raids & deportations: not a new thing, but what’s new is people with documentation (visas, amnesty recipients, citizens) are being detained and deported

• Creating fear, workers not showing up to work (some regions report a 70% drop in workers)
• Workers not going to farms on main roads (too visible)
• Families choose 1 member to go ot work, the other stays home to take care of the kids
• Historically, when the safety of workers is an issue, workers don’t respond to higher pay

US tariffs increase prices to consumers, decreasing sales; it may take decades for consumers to substitute for domestic wines

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Detailed Show Notes: 

Wine Institute overview

• Members are CA wineries (>1,000)
• Public policy organization focused on legislation (e.g., DTC shipping)
• Member dues are a sliding scale (based on prior year revenue & volume), baseline is a few hundred dollars

CA is the 4th largest wine region in the world after France, Italy, and Spain

• Largest market in the US
• The US market is 75% domestic (80% from CA), 25% imports
• Export is 4% (by value), 95% is CA
• Traditionally lower-priced wines, now a barbell (both low and high, but not mid-priced wines)
• Other countries have high taxes, duties, and tariffs on imported wines (int’l pricing often 2-3x US retail, 10x for India)

Cost to produce is high in CA (heavily regulated - environmental & labor force protections; land costs high)

Goal to showcase the diversity of CA wine globally, but only a sliver is available 

Key int’l markets - Canada (#1 until Feb 2025; ~30% of US exports - premiers took all wine off shelves as part of trade war); Europe #2 (Germany is hard w/ strong domestic, low priced market; Scandinavia big); UK #3 (punches above its weight as oldest wine market, lots of wine writers, critics, traders; one of the broadest selections of CA wine); China, Japan, Korea, Mexico

Wine Institute has active programs in >30 countries for CA wines

Benefits of exporting wine: importers sell wine for you (no 3-tier system like the US), build brand visibility, position wines next to other great wines of the world

Challenges of exporting wine - takes investment, needs face-to-face storytelling

Small Napa producer (<5k cases) now exports 15% of sales working w/ Wine Institute

IWSR creates an index ranking all wine markets globally on attractiveness (2024 - US #1, Canada #2, Switzerland #3 - a small country, but strong wine culture and high value wines)

EU subsidies are pervasive (e.g., bottling line, materials subsidies, marketing support (Italy $150M/year), buying excess bulk wine), but hard to get complete info

The US has less support for alcohol (USDA has $8M/year for CA wine); wine is the highest value US export, but low in total value

Trade war impacts

• Market uncertainty has many importers not wanting shipments on the water
• Cost of input materials (e.g., steel, oak barrels) up
• Prior administration not interested in addressing trade disparities, potential to open up other markets (e.g., India - 150% tariff on alcohol, #1 whiskey market, #5 beer market; Vietnam; Thailand)
• Attitudes towards the US impact business (e.g., Denmark dislikes threats on Greenland, reducing US purchases; China is not a factor; Vietnam and Korea are positive on US products)
• Hong Kong’s move to 0% taxes on wine led it to be a hub of CA wine in Asia
• In 2019, China's tariffs on US wine plummeted business

Wine Institute promotes “0 for 0 tariffs” - keeping wine out of trade disputes

Major policy priorities: US dietary guidelines (on alcohol), getting wine back on the shelf in Canada, Ingredient & nutritional labeling, CA bottle bill on recycled glass, and environmental regulations

“Share Wine” program - building understanding, community, and engaging with wine consumers, focusing on 25-45 year olds, centering on relationship w/ technology

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Detailed Show Notes: 

Bronco - Top 15 winery, owner of Charles Shaw (aka “Two Buck Chuck”)

• Has its own CA distribution
• House of >200 brands
• Large winery in Modesto, bottling in Napa, a boutique winery in Santa Rosa
• Owns ~40k acres, ~30k acres vineyards, but farming <10k today
• Owns Bivio, a logistics company

Charles Shaw

• No created by Bronco, acquired by Fred Franzia (co-founder of Bronco)
• Was a successful, premium, luxury Napa brand, 1st vintage 1978
• Went bankrupt in the 90s, Bronco bought the trademark in 1999
• 1st product in 2022 - $1.99 for good quality wine
• Low pricing enabled by low margins and Fred Franzia’s “genius” in bulk wine trading
• Partnership w/ Trader Joe’s through shared belief in creating accessibility and substantial cultural overlap

Believes the industry needs more good entry-level wines to get younger generations a start in wine

• The ethnic makeup of younger people is not the same as that of older generations
• “Not your father’s Cadillac” - young tend to rebel against what their parents did
• 11,400 wineries in the US create a diffuse set of interests, a lack of clear messaging (e.g., craftsmanship, agriculture) to separate wine from alcohol
• Accessibility could be driven by the right packages (including formats) and labels; good labels drive trial, good liquid drives repeat sales
• Significant marketing spend is difficult due to low margins
• Industry covers the right price points (e.g., Charles Shaw $3.49 in CA), but needs other elements, not a lot of great innovation or marketing at low price points (some pockets of innovation, e.g., XXL focus on high ABV)
• Need more transparency - ingredients, nutrition, ownership, provenance - Bronco is adding more back stories to brands

Enhancing social interactions is important; e.g., Jack Daniels’ ad that getting together with other people is healthy too

• New Bronco company motto, “better times at every table,” similar to Pernod Ricard’s “conviviality”

Believes dislocation of restaurant price vs retail is a core driver of wine industry decline, $14 IPA and $25 cocktails make people drink less

Navigating lower volumes requires being more efficient, sees opportunity in winemaking (most capacity utilization at wineries now <50%), distribution (reduce inventory), and retail

Likely too many brands in the US and too much shelf space in retail

Mothballing a lot of vineyards due to oversupply

• Can’t bring back in 1 year, but can in 2-3
• Cut buds down so vines don’t produce fruit
• Still requires some maintenance costs
• Vineyards in less optimal areas are to be pulled first, and he does not believe there will be an overcorrection

Competing in value vs international

• Can’t compete on labor
• Need to compete on quality, provenance, and taste
• Even tariffs won’t solve the cost gap
• EU subsidies help democratize wine

Tariff impacts

• Some input cost increases (e.g., China for glass)
• A good thing overall for the US industry, which will lead to more US wine being consumed
• Likely no structural change

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Detailed Show Notes: 

CA Winegrape Growers - based in Sacramento, lobbies at the state and federal level

• CA has ~5,900 winegrape growers and 550k planted acres

Key cost drivers of winegrape growing

• #1 labor, ~45-50% of budget (30-45% CA interior, 45-65% CA coast); doubled in the last 10 years, driven by:
• High min wage ($16.50; most pay $18-30/hr) → increases take entire pay curve up, not just bottom
• 2016 labor law change reducing hours before overtime pay → reduced farmworker take-home pay (OR provides an overtime tax credit to employers)
• #2 regulatory compliance (water, air, worker health, safety), ~10% budget
• Cal State SLO study on lettuce growers - compliance costs ~$1,600/acre (1,366% increase since 2006, 637% since 2022)
• #3 land - CA has some of the highest land prices in the US 
• #4 crop protection/fertility tools
• Farming costs ~$4k/acre Central Valley, $6-8k/acre Paso Robles, $8-10k/acre Sonoma, ~$10-17k/acre Napa

Grape pricing not rising w/ input costs - Central Valley ~$500-600/ton, Central Coast ~$1-2k/ton

• Bulk wine from Chile is cheap, and the US can’t compete on price

The annual CA Winegrape Crush Report shows pricing for all varieties by district

• No US federal support vs EU
• EU subsidizes at every level (growing, marketing, production)
• >e2B/year in direct and local support, enabling cheap wine production
• Crisis distillation - buy surplus wine to convert to alcohol (e.g., hand sanitizer)
• Vineyard removal and vineyard planting subsidies
• Aggressive marketing support (France investing $5B to support wine exports to the US w/ new tariffs)

US wines can have up to 25% foreign wine blended in and be labeled as US wine

2023-2024 - CA left ~300k tons/year on the vines; 2025 ~50% of vineyards don’t have a contract for the 2025 harvest; industry calling for another 50k acres to be removed (60k removed since 2022); all regions pulling out or mothballing/minimally farming vines

Tariff impacts (May 2025)- input costs increase, but can be positive for CA winegrape growers

• 2019 tariffs saw domestic wine increase its share by 10% vs EU wines
• Canada is actively removing US wines from shelves in retaliation; the US exports 10% of its wines, 40% to Canada

Deportations - creating fear, people are afraid to leave their homes for fear of their families getting separated

Seasonal labor is not big, 90% vineyards are mechanically harvested; H2A temporary workers (mostly from Mexico, all-in cost ~$30/hr, often more productive, cannot be paid more than domestic workers)

Economic impact of CA wine - 422k CA employees / 1.1M across US, $73B CA economic impact / $175B/year US

All agriculture is struggling in CA, replacement crops for grapes not easy (some almonds, pistachios, cherries); costs ~$30-70k/acre to plant a vineyard

Duty Drawback - a federal tax refund program meant to encourage exports

• If a winery exports wines, then imports them back, it gets 99% of import fees (including the Federal Excise Tax of $1.07/gallon) refunded
• If importing ~$3/gallon bulk wine, can save ~30%
• Mostly used by the top 5 wine companies
• 2024 - 38M gallons bulk imported (70M in 2022) vs ~70M gallons left on the vine in 2023

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Detailed Show Notes: 

Mason’s background - UC Davis Professor, Apple, AI & agriculture

Kia’s background for Scout - owns the Neotempo wine brand, worked at Splunk, the “data for everything” company

The official company name is Agricultural Scout, dba Scout, the website is agscout.ai, so it can be called any of those names

Founded in 2022, initially more hardware-based, but pivoted to an intelligence company using off-the-shelf hardware

The goal is to “replicate the farmer’s eye” with an AI-based solution using cameras, tractors, and Scout cloud and mobile app (which can be used offline); the brain is centered around a phone

US only today (~50-100 clients, 300 blocks, 2M vines, processed 56M photos), going international in 2026

4 main use cases currently: 

• Automate vine count, inventory, and mapping of vines - 4x faster than people could do
• Estimate crop performance - both vigor and fruit
• Yield forecasting - can use every step in the growing season to forecast yield with historical performance and weather forecasts
• Health performance and vine mapping - leveraging AI for virus detection

3 types of clients

• Estate wineries
• Vineyard management companies (“VMC”)
• Real estate investors or owners to track vineyards

Benefits include: 

• $400-1,200 savings/acre
• Productivity gains through managing more acres with fewer people, identifying low-performing vines, and the program tells farmers where to sample
• Remote monitoring of faraway vineyards
• Early season yield forecasting
• Disease management - virus can cause $170k/acre damage over 3-5 years, costs $40/PCR test, the goal is to keep virus <15% not to lose the whole block, has a 7,000 photo database on vine disease

Bench Vineyards discovered 1 acre of missing vines out of 24 acres and filled them in

Pricing is a subscription model, $150-180/acre per scan

• Volume discounts >50 acres
• Neighborhood and AVA discounts
• Starter - 2 scan package (for inventory and virus)
• Professional - 6 scan package
• Typical customer starts w/ 2 and upgrades to 6
• Monarch promotion, customers get 1 free scan
• Up front hardware costs ~$3,000

New product in beta in July 2025 - ChatGPT Scout for vineyards

Marketing mostly through word of mouth, industry trade shows, and webinars have been effective, as has partnership with Monarch (already tech enthusiasts)

Barriers to purchase are often due to farming budgets built around labor

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Praveen’s background: mechanical engineering, loves fast cars, worked on electric vehicles, robots, and battery systems

Founded Monarch in 2018, the company is currently the only company selling smart, electric tractors

Now on four continents, with most sales in the US, pilots internationally

Solution is a smart electric tractor with an app and piloting autonomous driving

• Fits in 5’ rows
• Runtime 10-14 hrs for pushing, 8-11 hrs for mowing, 4-6 hrs for heavy operations; takes ~6 hours to charge

Core markets - vineyards #1, dairy #2, orchards, horse ranches

Core benefits

• Save $7-12/hr on diesel savings
• Remote service and support, day and night - can submit a service ticket on the machine and get help remotely
• Product gets better over time with SW updates (e.g., released the ‘row follow’ feature)
• Can power other things, be used like a generator (e.g., night lights for harvest)
• Easier to train operators (smart screen vs 20 manual controls)
• Environmental impacts - reduces carbon emissions
• With increasing automation (mowing is 1st operation), more labor savings

Autonomous driving has guidelines by CA OSHA (need signs that the autonomous tractor is running and no people in the block), but there are no legal guidelines in other places

Pricing

• $90k baseline price + options + subscriptions
• Gov’t incentives can make it cheaper than a diesel tractor, 20-70% savings
• Monarch helps apply for subsidies, including charging infrastructure and solar installation
• Subscription charge for connectivity and SW has various levels; some charges can be offset by incentives with carbon offset reporting (e.g., Dannon gives dairy farmers incentive payments for the carbon offsets)

ROI driven by tractor usage, payback ~2 years; has an ROI calculator on the website; needs to be cheaper and more efficient before sustainability elements come into play

Most farmers want autonomy to reduce labor costs

Sells through a direct sales team and dealers

Marketing driven by non-electric tractors today, podcasts are helpful, social media, and demos have been very effective

• Social media, primarily Facebook and LinkedIn for owners, Google SEO, and local dealer support
• Demos are essential; most farmers want to try before they buy

Partnering with other companies to use their technology inside, also partnered with AgScout to leverage AI for vineyards

Barriers to purchase primarily worry about service and support, and wanting more autonomy for labor savings

Continuously update both HW and SW on machines, some tractors now close to 4,000 hours of operation (vs. standard tractors need to be replaced after 4-6k hours)

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InnoVint overview - mobile-driven winemaking platform, tracks and manages all winemaking options, and automates compliance

• >600 winery clients (~80% of wineries still using Excel)
• 92% of clients in North America, 8% International
• Mission: helping wineries run better businesses

TTB requires reporting for producers >500 cases

4 products

• Grow - vineyard tracking platform from the winemaker’s lens; phenology dates, yield estimates, applications, harvest scheduling, historical trends
• Make - winemaking from fruit reception to bottling; work enablement platform with digital work orders
• Finance - tracks all costs associated with making wine, final COGS; the finance team applies overheads
• Supply (2025 launch) - case goods management, inventory tracking, integrates with DTC platforms & distributors, has allocations as a planning tool

Has open APIs; integrates with TankNet and VinWizard for winery automation, receives data back for actions taken; integrates with quality control labs (e.g., ETS) and can take action more quickly

Core benefits

• Key differentiator: profitability per SKU and true COGS/product (w/o InnoVint, calculated once per year)
• Efficiency, working smarter, better decision making, and more transparency
• Reporting to be able to manage quality
• Some wineries use data to track carbon footprint (e.g., water use, weight of glass)
• Reduces the risk of an audit

Compliance reporting (e.g., TTB 5120, export reports) - Gloria Ferrer went from 3 people over 2 days to 15 minutes for 1 person

Larger wineries tend to have more tangible benefits

• Domaine Chandon saved $75k annually by making the workflow paperless
• Patz & Hall saving 40 hours/month

Onboarding

• 5-step self-serve process (vineyard sources, lots, volume, vessels, current inventory) takes a couple of days for small wineries
• Premium package for larger wineries includes team training, and full data migration takes 2-8 weeks

Pricing - SaaS model

• Scales based on size (production) and complexity (# of locations) of the winery
• Not user or usage-based
• Implementation ~$1-2k
• Subscription starts at $2,400/year for a boutique winery for Make

Marketing - “has tried it all”, tries to add value to the end user

• Does a lot of speaking engagements/webinars on being a healthy winery
• Manages The Punchdown, a free digital community that is a peer-to-peer exchange
• Referrals from clients are the most effective marketing
• Launched the State of the Wine Business Health Report (2024) - surveyed with >500 participants
• To reach wineries that don’t go to conferences - LinkedIn/social, co-marketing, financial webinars
• Paid advertising sometimes works, but it's not a top lead generator

Barrier to purchase - resistance to change, case studies help overcome (e.g., Domaine Carneros saw what Chandon was doing and bought the product)

The product roadmap includes Supply module, AI applications, and embedded tools

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Detailed Show Notes: 

Julien’s background: French, came to the US in 2006 and worked for Phillipe Melka, started his consulting practice in 2013, built two wineries and manages three others; mostly Napa (~85%), but also makes wine from Sonoma, Sierra Foothills, Provence, Bordeaux, and Serbia

Uses trial & error to evaluate new winemaking technology

Usually, a trigger that causes each tech adoption

Hears about new tech from travel and conversations with other wineries and tech companies

French tech is mostly involved with wine contact (e.g., yeast, oak treatment), the US is mostly logistics, mechanization, automation of labor, and CA is slow to mechanize vineyard work

Monitors the slowly evolving knowledge base in winemaking - most tech innovations are slight derivatives of existing knowledge (e.g., sulfur automation)

To buy into a new tech: other people using it, company viability (and ability to scale), practicality of solution (e.g., barrel door for fermentation did not take into consideration time and the challenge to move between barrels)

ROI calculation includes cost savings, risk assessments, and quantity or quality improvements

Generally does not implement things that could move costs more than 10-20%

The most significant variable cost driver is when volume drops (e.g., waste, accidents, filtering, bulking out wine) - each tank is ~$100k of wine

Fruition Sciences did a lot of sap flow analysis, but never got mass adoption

Well monitoring technology is happening, and may be required soon

Communications modules for sensors are getting much cheaper, enabling more tech

Vinwizard (NZ) - wall winery automation

• Started with pumpover automation (temp, speed)
• Can control to avoid peak energy hours
• Can set times for tanks to make temp-sensitive additions easier
• Alarms for glycol system outages
• Arkenstone was 1st Napa winery to adopt, learned from them, a solution more complete than TankNet
• Min ~$50k cost

Innovint - winery SW management system

• Creates all work orders, does costing, compliance, and traceability
• Clients, CPAs, and compliance can see everything
• A communication tool, very user-friendly

Sentia - hand wine analyzer (VA, malic, alcohol, SO2)

• $2k/machine
• <$1/use for strips
• Uses a solid chemical reaction
• “Fragile” tech, 1 in 30 results is way off, researching this with a Phd
• Tried bungs with sensors, but requires a tech breakthrough to work

Oenofrance - a system for faster oak extraction

• Put oak blocks (closest to staves) under pressure to extract oak flavors faster
• $40k in oak to $4k (renting tech)
• Costs ~$80-90k to buy machine

Excited about new destemmers, probes for monitoring wines (for “modern natural wine,” in-ground amphora aging)

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Detailed Show Notes: 

Changes to being an influencer

• AM: did not think TikTok would be big for wine in 2020, built it up in 2021, and created more “snackable content” (<90 sec videos), reaches wider audience (late 20s to boomers, more female) on TikTok
• Influencers are changing, and many get burnt out (including Robert)
• Influencer growth today - e.g., Olivia Tiedemann (@oliviatied) went from 0→4M followers on IG in 2 years, raw, skilled, edgy style caught people’s attention, used collabs to keep growing

Social media evolution

• Things are more video-heavy today vs. the static content of 5 years ago
• Not a lot of male creators (tend to be older, more “academic”), female creators are much better at wine education
• YouTube skews more male, TikTok more female
• Males tend to consume more long-form content, while females tend to consume more short-form content
• IG likes higher production quality, TikTok more “authentic” videos, IG upped video content length to 3 mins
• Rednote (Little Red Book) - a popular Chinese app for local food & beverage recs, particularly in Asian dominated communities

Wine market upheaval

• PY: Anti-health messaging is hitting wine more than other alcohol, reversing the trend of the last 30 years, fueled by the “French Paradox” research on positive heart benefits of the Mediterranean diet
• Premiumization is somewhat continuing - the top 1% are maintaining the high-end market, while others are trading down
• AM: “Wine isn’t cool,” wine is not great at being in pop culture today
• PY: Taylor Swift helping things like Sauv Blanc, but she’s not out talking about wine (AM)
• AM: Wine needs an Alix Earle (@alix_earle) w/ a glass of wine or maybe more medium-sized influencers (100-500k followers)
• CF: Health kick is a major trend impacting alcohol consumption, fewer people at restaurants ordering wine (at least in LA), people pushing NA options
• AM: people not interested in the <$10/bottle category (except things like Kirkland wines), want $30+ bottles but need to sell the wine as there is so much choice
• AM: Wine needs to revamp its merchandising to reach more people (e.g., more by style than varietal)
• CF: High-end wines getting cheaper and more available; when top wine prices fall, alternatives also crash
• AM: No such thing as brand loyalty anymore, NDA wines big for Wine Access (private label w/o being about to say the source)

Wine marketing done well

• CF: Winemakers from Burgundy (e.g., Dujac) are out there a lot more, increasing the popularity of the entire region
• PY: Doing more experiences both at the winery and on the road
• AM: Clean wine movement (e.g., Avaline) has some negatives, but is positive in terms of giving more transparency (what many consumers want these days)
• RV: ingredient and nutritional labeling on the bottle is better than just available on the website; PY: NA wines have full nutritional panels, which could help promote wine’s good sides

Wine drinking trends

• AM: Sauv Blanc is America’s grape right now, theory: women think it’s a healthier option due to its lighter, crisp style
• CF: people not drinking as broadly, but more hyper-focused due to so much available information (e.g., William Kelley and Burgundy); fewer people drinking natural wine

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Detailed Show Notes: 

Root Applied Sciences (“Root”) - airborne pathogen monitoring for farmers, like an “early warning system”

• Founded in 2018, 1st work with/ growers in 2021
• Powdery mildew (“PM”) is a big problem for vineyards in CA (March - August)
• Currently only markets to vineyards, done work with/ strawberries, leafy greens, can do anything with/ DNA and small insects
• Napa, Sonoma, Central Coast today

HW enabled SaaS model - Root owns and maintains devices

• Device in the field, just above the canopy
• Send data (battery status, device status, temp, humidity) to the cloud over LTEM connection
• SW to see the data
• The grower collects samples from devices 2x/week and sends them to the lab
• Growers can share data with/ each other

Has an automated prototype in process

• Will not need a grower to collect and send samples
• Fundraising “seed” round for an automated system

~25% of operational costs are spent managing PM

• 6-16 pesticide applications/season
• Conventional growers have fewer applications, but spend more for each one
• Organic may be spraying every week
• PM takes 7-10 days to enter plants. See 2 peaks of PM before growers can see it, once PM exists, it's hard to control
• Root can cut 20-80% of sprays (~5 sprays/season), lengthens spray intervals when low risk
• ~$100/acre spray cost per application, ~$300/acre if need to spray by hand (e.g., steep slopes)
• 2024 - saw PM on Mar 29 in Carneros, growers planned 1st spray 4/16, moved up 1st spray to 4/2; cut sprays and more clean fruit
• Root data enables more biological sprays (have shorter efficacy windows, are more environmentally friendly, and data gives more confidence to try them)

Other benefits of Root

• Clean fruit - faster fermentation (5 days faster), higher quality, possible increase in yields
• Environmental (less sprays, tractor use) - less diesel use, lower soil compaction; for 1 grower, 1 spray is a 13% reduction in carbon footprint
• Farmworker health - fewer chemicals in the air

Pricing

• $3,000/season/monitoring station all-in
• Avg grower has 4 stations, 1 every ~30-50 acres
• Precision growers or rolling hills, 1 station every ~10 acres

~5x ROI

Barriers to adoption

• Risk aversion
• No access to a carrier to send samples
• Grape prices down (budgets)
• More adaptive sprays can make operational scheduling harder for vineyard management companies

Other PM solutions

• “Spray and pray” (~90% of growers) - calendar-based system
• Weather-based tools don’t work well and may be impacted by climate change
• Spore trapping tools (e.g., spinning rods, roto rods) have sticky material that reduces sample size and efficacy, UV light exposure degrades PM
• Image-based analysis (new) - lots of data to send, samples ~2L air/min vs 400L air/min Root, does not specify type of PM present (~40 types)

Product roadmap - more power efficiency, integrating a solar panel

Has done work with/ downy mildew, botrytis, vine mealybug, and can detect them, but does not add a lot of value

Excited about growth in microbial mildewcides (biologicals)

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Detailed Show Notes: 

Gabe’s background, at Royal Wine >9 years, wine industry for 16 years (retail, consulting, marketing)

Royal Wine - world’s leading importer, producer, distributor of kosher wine

• In US, carries >1,000 kosher wines from every major wine producing region
• Owns Kedem, Herzog, and other brands

Can’t taste kosher wine, similar to other wines

• Produced only by Sabbath observant Jews
• No non-kosher ingredients or processing agents (e.g. - fining agents)
• Has kosher certification on the bottle
• Mevushal (“boiled”) - for some kosher wines, uses flash pasteurization which is also used by some non-kosher wineries; tend to taste more approachable initially, but ages longer

Israel #1 producer of kosher wine (~5M cases), USA (~350k cases; mostly Herzog), France (~350k cases across many wineries)

Kosher wine market

• Observant Jews drink kosher wine year-round
• Jews use wine in almost every religious ceremony, considered the “holy beverage”
• Passover 1st night dinner (Seder), every adult is required to drink 4 cups of wine (can by any kosher wine or grape juice), each cup symbolizes 1 way God saved Jews from slavery
• Jews who don’t do kosher normally will for Seder
• 40% of kosher wine in the US is purchased for Passover (used to be 60%, declining as more quality kosher wines available, so more is being bought year-round)
• Top markets - Israel, US (NY/NJ #1, FL, CA - CA Jews drink less wine than East Coast Jews), France

In top kosher markets, large retailers (e.g. - Total Wine) will have a kosher selection, some kosher wine stores, and online retailers (e.g. - Wine.com) also carry kosher

Of the 15.7M Jewish people (2023), only a small portion keep kosher

Some kosher wines sold to the general market (e.g. - Bartenura Moscato #1 imported Moscato the past 15 years, most don’t know it’s kosher; Jeunesse semi-dry wines have a distinct consumer appeal)

Israeli politics / Gaza war have lead to people buying more to support Israel

Marketing to the Orthodox community

• Identify sects with stricter mevushal rules (e.g. - 101F vs 105F) and promote specific brands that meet those
• Print advertising big (English, Yiddish), many do not use as much internet, none on Sabbath, take in news via print
• Whatsapp #1 social media for Orthodox Jews (or Telegram)

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Detailed Show Notes: 

Victor Schoenfeld - CA native, went to UC Davis, recruited to Golan Heights Winery in 1991

Walter Whyte - managed officers’ clubs in the military and learned about wine

Golan Heights Winery (“GH”) background

• Founded 1983 to export wine of high quality
• 26% exported today (production to increase 30%, primarily for export)
• NE Israel, Syrian border, 33rd parallel (like San Diego)
• Volcanic plateau, Mediterranean climate, high elevation (1,200-4,000 ft)
• 19 varietals, known for traditional method sparkling, Yarden Cabernet
• Zelma Long, former consultant
• Price points range from $15 (Mt Hermon) - Yarden Cab ($50) - $80+ - $1,000 (Cru Elite)
• Manage 40% of vineyards (to increase), rest on long-term contracts
• 500 vineyard blocks, harvested & vinified separately
• Has two propagation vineyards and a nursery

Israeli wine history

• Journal of Science (2023) - identified two winegrape domestication events 11,000 years ago - Caucasus (Georgia) and Western Asia (Israel)
• Discovered ~30 ancient wine artifacts
• Golan Heights is the coolest climate region in Israel
• Muslim rule 738 - WWI - old varieties died out

Israeli war impacts

• Minimal grape growing impacts (1 missile fell on vineyard), but emotionally challenging
• Support in the US for Israeli wine, reduction in sales in Europe after Oct 7, 2023 events

Israeli wine market

• GH demand > supply in Israel
• Per capita consumption is low; a large segment does not drink due to religion
• The food scene has exploded in the last 20 years, but many restaurants do not serve Israeli wine
• Top 5 markets - US, Canada, Europe, Far East (Japan)
• Top US markets - NY, NJ, CT, FL, TX, IL, CA
• Historically, wines went to religious markets, expanding into secular
• internationally marketed as high quality, not as kosher; Angelo Gaja distributes in Italy

Differentiating GH

• “Oldest new world winery in existence”
• Marketing messages: World-class wine, kosher, then from Israel
• High elevation, volcanic soils on 33rd parallel (Etna is 37th)

Marketing

• Grass roots, get people to taste the wine
• Active in Jewish organizations, ads in Jewish publications, tasting events sponsored by Jewish groups
• Strong presence in Kosher wine stores

All GH wines are kosher

• 2 types - Mevushal (cooked/pasteurized) - required for some, esp Kosher restaurants (catering, weddings, bar mitzvahs); Non-mevushal
• Many wineries do both
• Everything used in winemaking needs to be certified kosher (e.g., yeast)
• Can’t use things like isinglass
• GH's whole facility is kosher
• “Could double business if made mevushal,” but will not to maintain quality

Food and wine pairing is not typical. Traditional Middle Eastern cuisine, “mezze,” has a lot of different flavors at once

Passover dinner is coursed, and every adult must drink four glasses of wine (or grape juice)

Yarden Cru Elite - $2,000 per pair

• 265 pairs related, including NFT, sold directly from winery
• Celebrate the 40th anniversary with collectors
• Cabernet Sauvignon, single vineyard, single block, two single barrels
• Launched at an Israeli restaurant in Singapore

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Detailed Show Notes: 

Phytech - a global SaaS company that optimizes agricultural irrigation

• Technology includes dendrometers, irrigation pressure switches, soil moisture probes, and frost & weather stations
• Crops include nuts (biggest), citrus, pears, getting into row crops
• Vineyard solution primarily West Coast / CA, pursuing Portugal, Spain, Italy, Chile, Mexico, Texas

Dendrometer - digital devices mounted onto vine or tree, measures expansion and contraction of plant trunks at the 0.5-micron level (70 microns = 1 human hair)

Vineyard solution includes a dendrometer, soil probe, website, and mobile app with wireless comms and data loggers connected via cellular, satellite, or wifi

• The solution can be adjusted based on the type of farming (e.g., quality or quantity), rootstocks, clones, soil types
• Tracks trunk size and soil moisture to signal irrigation needs
• Optional: pump/value control for irrigation
• Can schedule up to 2 weeks of irrigation
• Can monitor fertilizer inputs (cost of fertilizer up 600% last 5 years)

Benefits:

• Don’t promise water savings, but see up to 60% less water use
• Improve quality by knowing when veraison happens and when vines stop growing or are stalling
• Optimize fertilizer, diesel, and electric pump costs
• Reduce labor for irrigation if automated
• The system logs data, enabling knowledge transfer when people leave
• Case study: High-end Napa vintner got WE94 points 1st vintage, then used Phytech in a heat wave year and got WE97 w/ tailored post-veraison irrigation; other growers had a 30% loss, the winery had a 3% loss
• Case study: one ranch was expecting a 50% loss, but down to 3% with irrigation changes

Pricing - depends on # of sites in a block

• There is a small upfront fee for installation
• Monthly SaaS fee (~$50-80/acre/year), includes maintenance
• Weather station ~$700/year (vs ~$3,500 to buy)

Case studies (videos on website)

• Ultra premium Napa winery Neotempo
• Larger Mendocino grower Bonterra 

Marketing most through word of mouth/referrals

• Digital media, video testimonials, trade shows & panels
• Video in digital media has been the most valuable
• Connecting 1:1 is very helpful
• Phytech is more holistic than other solutions

The most significant barrier to adoption is technophobia

The subscription-based model eliminates “tech graveyard” growers have

Product roadmap

• Predictive brix/pH model (growers input brix, system tracks weather, vine response) to predict harvest date by block
• GDD (growing degree days) monitoring tracking temperature and humidity in the field at the block level
• AI Advisor to look at past data and current practices and enable recommendations

Other exciting innovations - Autonomous spraying and tractors (Guss, Monarch), optical arrays for vine health (Scout), microalgae for soil health (MyLand)

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Detailed Show Notes: 

Shawn’s background - winemaking, viticulture, now general management

Sentinel was a Covid project that became real, software that collects individual vine information over time

• “Patient medical system of record for vines”
• The solution includes a mobile app, desktop platform, and high-accuracy GPS (receivers that clip onto phones)
• Maps all the vines in the field
• Configurable data collection forms
• Available in 5 countries currently

Mapping the vineyard

• Create a 3D model with lat/long and elevation
• Basics (variety, clone), images, comments, discrete statuses (e.g., life stage, virus status)
• The vineyard mgmt team populates data, can walk up the vines and record
• Work with/ Sentinel to put in bulk metadata (e.g., block info, varietal)
• A client mapped 100 acres in 1 week

Work order function

• E.g., irrigation can be recorded
• Roguing, planting, and grafted statuses can auto-update when the work order is completed

Core benefits

• Extend the life of the vineyards
• Virus/disease management, see the program more clearly, identify asymptomatic vines in hot spots (case study: ~10% of vines asymptomatic) 
• Optimize pick areas (through mapping flavor profiles)

Pricing

• Mostly software, hardware costs small
• Annual subscription based on acres, not users (<1% of farming cost)
• Biggest growers ~$2k/year

ROI example: client roguing 1% of vines/year w/ growing virus problem, Sentinel enabled them to get ahead of the problem in 1 year

Marketing mostly organic search

• Articles and podcasts helped
• Last 18 mo, mostly word of mouth
• Referral program: The referrer gets a bottle of Krug

Barriers to adoption

• Worries about time requirements; the goal is to collect data when already in the field
• Worries about less flexibility to manage vineyard; full customization of data enables more flexibility
• Next on the product roadmap - continue to flesh out more work order functionality

Other tech Shawn is interested in

• Winery management platforms (e.g., Innovint)
• Soil moisture probes for irrigation

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Detailed Show Notes: 

Kaiken background

• Founded in 2002 by Aurelio Montes (Chile)
• "Kaiken" is the name of a wild goose that crosses between Chile & Argentina
• Exports to 60 countries
• Winery in Vistalba, Mendoza (28ha), vineyards in Agrelo (60ha) & Los Chacayes, Uco Valley (150ha)
• 60% on-premise
• Frances Mallmann restaurant at the winery

Recently launched new luxury tier/icon wine - "Boulder"

• $300 retail price, 3,700 bottles
• Developed over the last 10 years
• Unique 3ha block in Los Chacayes due to overflow of Arroyo Grande, full of big rocks/boulders
• Malbec (64%), Cabernet Franc (28%), Petit Verdot (8%)

Boulder launch plan

• Launched in Buenos Aires, Hong Kong, Korea, Brazil (São Paulo, Argentina's #2 export country), US
• Brazil's event had a more direct impact on sales
• Mostly press/trade events that are smaller, in-person
• Likely less on-premise than Kaiken overall, more hand-selling to collectors and Michelin Star restaurants
• VR w/ Google Glass to see the vineyard up close and go inside the soil has gotten positive feedback, but it is more expensive than a regular video (required 3 days of video shoots and a special camera)

Mai - prior icon wine

• $100 retail price, 12,000 bottles
• Launched in 2009 from a 120-year-old vineyard
• Marketing more "maintenance" now
• 2021 - redesigned packaging, got 98 pts and Top 100 from Suckling
• Primarily sold in Argentina, then UK, US, Brazil, Japan

70% of Argentinean wine is consumed domestically, delaying the need for exports

• Average export ~40% higher price than Chile (export-focused market, ½ the population, 2x wine production vs Argentina)
• More high-end wineries in Argentina vs ~5 in Chile

>$100 market for Argentine wine - "not a huge market"

• Big domestic market - much of Mai, Boulder sold domestically
• Consumers looking at super high-end often do not look at the country of origin but more at the concept of the wine
• Value Prop for Argentine luxury wine - not influenced by oceans, high altitude, dessert wines, driven by the Andes

Return on Boulder is more than sales, but brand building for Kaiken

Focused on relationships with importers

• Want long-term relationships as they represent the brand globally
• Reach collectors through import partners
• Has affiliated importer in Argentina

Montes relationship

• Was helpful on launch to piggyback on Montes brand
• Now Kaiken is more independent and only shares importers in a few countries (it used to have the same ones)

Kaiken Ultra ($26) awarded Wine Spectator Top 100 (#30, highest Argentine wine)

• Wine drinkers can graduate from Ultra to Mai and others
• Kaiken's focus for each range of wines is to over-deliver for the price point vs linking the wines

Good press in 2024 for Kaiken - #1 New World Winery from Sommelier Awards, Boulder rated best Argentinian red blend by Patricio Tapai (wine critic), Estate Malbec was Wine Spectator's best value wine

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Detailed Show Notes: 

Macro wine challenges include marijuana, Ozempic, and RTDs, but “no alcohol is healthy” messages from WHO and other gov’t organizations potentially pose an existential threat to the industry

Come Over October (“COO”) founding

• Campaign to advocate for wine
• Commission research - 60%+ 21-39-year-olds would change consumption if alcohol health guidelines changed, 60%+ participate in Dry January or Sober October (which equates to 17% of the year)
• Karen McNeil, writer of The Wine Bible, got backlash over post against Dry January and ideated Come Over October
• Kimberly Charles, owner of an SF wine PR firm, joined as co-founder
• Started the company in spring 2024 (Come Together, a Community for Wine) as a mission-driven company to advocate for wine

Fundamental principles

• Had to reach consumers
• No negativity towards other alcoholic beverages
• Involve everyone in the wine world

The goal for success: turning the narrative around wine positive (e.g., more articles on the social benefits of wine)

• Measured by impressions of negative vs. positive articles about wine
• In a battle for hearts and minds vs just getting the facts right

Asked for two things from partners

• Modest check - $1-10k to pay for campaign, website, social media, media asset creation
• Activation - use campaign assets (free to all) to run a COO campaign

Example activations

• Total Wine - in-store signage, direct marketing, social media posts
• Constellation Brands - bought in-store radio ads for 800 Kroger stores under the COO banner (promoting Kim Crawford, Meiomi, & The Prisoner with Karen McNeil doing voiceover) and reversed negative sales trends in stores
• Jackson Family - free tasting, events, cash support for COO

Campaign success metrics

• 120 companies participated
• >1,000 retail stores engaged (e.g., Kroger, Total Wine, Gary’s)
• ~$100k donated media (e.g., Wine Enthusiast, Vinepair, Wine Spectator)

Next Campaign - Spring 2025

• Focus on the food message
• Differentiate wine as food vs alcohol
• Continue togetherness message
• Bring in chefs, restaurants
• Then roll back into October
• Would like to hire a Director to run the company

Health debate

• Loneliness epidemic - 30% of males don’t have close friends
• Wine has a unique ability for positive wellness in bringing people together
• Does the industry need a positive health message/research to turn things around truly? (e.g. - wine → better relationships / friendships → stress reduction → better health)
• 60 Minutes show on The French Paradox (1991) changed the wine world and led to 30+ years of growth
• Not yet seeing health impacts of marijuana usage as it has only been legal recently

Contact info: info@comeoveroctober.com or gcolangelo@colangelopr.com

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Detailed Show Notes: 

Enolytics launched b/c no one in wine knew what to do with their data 

• Builds sales analytics software for the wine & spirits industry for both DTC and wholesale depletion data
• Customers primarily small (<$1M DTC revenue) & medium-sized, growing in larger wineries
• US, Canada, Australia - primarily US w/ 80% California

Partnership with WineDirect

• Exchange anonymized data every quarter and analyze it to build reports for the industry
• ~2k wineries in database, ~1k wineries analyzed after removing outliers

2024 DTC trends

• Revenue flat-ish, volumes down significantly
• Women purchasing less (-4%) - overall (-3%), men (-2%); reverses a recent trend of women buying more wine, not generationally different, impacting white (-5%) and rose (-10%) more than red (-2%)
• Affluent areas are doing better (flat revenue, lower volume), middle-class & poorer areas are down more
• Wineries increasing pricing (+5% through Q3 2024), AOV up due to pricing
• VA is doing reasonably well, CA - particularly Napa and Sonoma, hardest hit - they largely depend on tourism (70% of purchases from people outside CA), Central Coast CA is not down as much (70% of purchasers from CA)

Hospitality/visitation declined 7% (# of purchasers) in 2024 (also declined in 2023)

• Impacts wine club sign-ups, with hospitality the main club sign-up engine

Wine club growth -3% (# of members) in last 12 months

• 2020 +7%, 2021 +11%, 2023 -1% (20% attrition through Q3, 28% total; 19% sign-ups), 2024 -2% (19% attrition, 17% sign-ups)
• Club doing best of all major DTC channels - revenue flat, volume down
• Less expensive wineries getting hit more (less affluent customers)
• Customizations up - 20% of shipments, higher revenue per shipment
• Avg club tenure falling
• Best practices - better training of tasting room staff, use data to manage attrition (Enolytics has an algorithm to determine attrition risk; wineries that use it see 20% less attrition than average), use data to target customers to join the wine club (high spenders that are not in the club)

Website sales have the most significant room for growth, -42% since 2022, still up from pre-pandemic

• 2020 +250% in online sales
• Texting, “concierge” services, more targeted telemarketing (highest AOV channel, 6x tasting room; potential to leverage tasting room staff)
• Average winery emails the entire list, gets lots of unsubscribes, recommends hyper-segmentation, creates messages for 100-200 people

Events - same levels as 2022

• Opportunity to take tasting room on the road
• Recommends targeted events with a specific goal
• Go to places where there’s an existing customer base

Cross-channel marketing can be effective, e.g., using DTC data to sell out a restaurant event

Wholesale data partner - VIP - includes “can buy” and “lost” accounts

Regional wine marketing boards (VA, Paso Robles) engaging Enolytics to do studies on DTC data - currently doing baseline analysis and onboarding more wineries, sending quarterly reports

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Tastry has provided an example report for listeners. 

Detailed Show Notes: 

Tastry overview - see Ep 157 for a deeper dive

• Tagline - “taught a computer how to taste”
• It has two unique data sets - wine chemistry, US consumer taste preferences
• Helps improve winemaking, predict and react to changing consumer preferences
• Works with wineries, retailers, and distributors

Tastry commercialization history

• 1st 2 years - establish trust with winemakers
• Last year - focus on helping sell wines

Sales Accelerator Ecosystem

• Takes data from 3 areas (winery input metadata, wine chemistry, Tasty validated wine market data) to feed accelerator (AI system)
• Consists of Wine & Consumer Insights (“WCI”) report, Sales Accelerator platform app, & integrations into other platforms (e.g., e-RNDC)
• Has AI search and chat functionality
• Salespeople use data to sell to on/off-premise accounts
• Sometimes, consumer-facing in-retailer displays

WCI - 2-page report to help sell wines

• Used to train salespeople, it can be a leave-behind
• P1 - for the category buyer; P2 - for servers, staff to educate them

WCI Components: 

Top left - bottle shot, label zoom in (helps for retention); name of wine; varietal; appellation; price (what it is actually sold for in the market); wine category (AI curates category to be highest scoring on Tastry score)

Category Score - 200 point scale, 100 is average for the category

• Not a critic score
• >100 is better than the average, <100 less than average in terms of expected performance in its category against the Tastry consumer preference database (e.g., Cupcake Pinot Gris got a 181 score)
• Percentile rank - e.g., 129 = performs 29% above avg
• 10,000s wines in database out of ~160k wines in the US
• Never <15 wines in a category
• Creating a new WCI for more rare and unique wines
• Lower priced wines, terroir matters less; higher prices matter more

Tastry Notes - AI-generated tasting notes, breaks into average and more experienced drinkers

Segmented Consumer Appeal - insights into buyers of wine; if there’s at least an 85% match (roughly equates to Vivino’s 3.9-4.0 score or 88-90 critic score), consumers tend to notice they like the wine and will buy it again

Flavor profile (p1) - e.g., fruitiness, oakiness, sweetness

P2 - flavor profile (major flavors), retail talking points, food pairings - used as a training tool to help people sell wine

Launching a new page for marketing teams to update data

Retailer recommender - has shown +3-12% sales in 90 days

Tastry Pricing - $1,580/year subscription, $370/wine analyzed

How Tastry can help in the current macro environment

• Creating low / no alcohol wines
• Marketing tools (Sales Accelerator) - addressing younger audiences (e.g., pairings with kale salad and frozen pizza rolls)

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Detailed Show Notes

Folded Hills founding - intended to grow and sell grapes, vineyard manager convinced the Busch’s to start a label, Folded Hills ties into family history

• Heritage labels - e.g., Lilly Rose after Lilly Anheuser (grandmother)
• Photo labels (reserves) - mostly from photos the Busch’s took themselves

Folded Hills overview

• 600 total acres for Homestead, Farmstead, private ranch
• Southernmost winery in Central Coast, right off 101
• The urban tasting room in Montecito, Homestead (winery tasting room), and Farmstead at the winery
• Rhone varietals (Grenache, Syrah, Clairette Blanche, Marsanne, Grenache Blanc)
• ~5k cases/year
• 98% DTC, would like to increase wholesale to 10% for more exposure
• Has its own polo field

Visitation

• ~8-10k visitors/year total
• ~2.5k in Montecito (more club members, a “Cheers” vibe), rest at Homestead
• Mainly from Santa Barbara, Ventura, San Diego

Creating memories through events differentiates Folded Hills

• Sparkling rose launch party in Montecito - brought in a mini horse with a unicorn horn
• Launch vinyl nights (Thurs, Sun) in Montecito
• Does 1 large event/month at estate Homestead - e.g., polo games, tailgate contest
• Oktoberfest - beer & wine
• Animal feeding (including zebra, camel)

Prices events to primarily cover expenses (range from $15 - 195 winemaker dinners)

The focus is on creating memories vs selling wine to create word-of-mouth buzz

• Andy’s dad said “making friends is our business.” - he created beer and baseball while owning the St Louis Cardinals

Hospitality differentiation through events and experiences

• Has a full-time events manager
• Enabled by lots of land (600-acre ranch), private lake dock, ATV group tours in the vineyard, animals to feed
• Homestead appeals to families (w/ Farmstead - U-pick fields, animal feeding)
• Hires people w/ the “hospitality gene”

Wine club benefits

• Wine is the biggest draw (“purity” of wines believes does not lead to “stuffy nose” or “headaches”)
• Word of mouth around Folded Hills taking care of club members (access to private lake, private ranch)
• ~10% of club members are local (live w/in 1 hour), next largest group from St Louis (does ~2 events/year, launched brand in St Louis)
• Get 15% off organic produce at Farmstead
• Plan to relaunch farmstays on a adjacent private ranch

Farmstead - “heart of soul” of brand

• Best sellers - animal feed, ice cream, baked goods
• ~30% of visitors go to both Homestead and Farmstead, increasing as tasting room visitors now given free bag of animal feed

Santa Barbara wine region differentiation - diversity, 75 varieties grown; unique climate (transverse mountain range)

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Detailed Show Notes: 

Duncan’s background - was in marine biology and shifted to wine ~20 years ago

Giesen - family owned, 40 years old, large winery (crushes ~20k tons/year), a broad range of wines from large scale to single vineyard

Started non-alcoholic (“NA”) range 5 years ago (2019)

• ~17% of production today, growing
• Has a more significant reach and impact on the market vs. regular wines

The creation of the NA range came from a fitness challenge in 2019, when he could not drink alcohol for 1 month and discovered there were no good choices in the NA space. Spinning cone technology (good for quality as it uses lower temps than other processes) also became available in NZ at that time

NA winemaking process - create regular wine, then remove alcohol; for red wine, you need to balance the tannins (need ripe, soft tannins)

More expensive to make - costs 15-20% more

• Need to replace ~25% of volume
• Need to go through spinning cone technology
• Lower cost from no alcohol excise taxes

NA taste - loses some of alcohol’s texture, body, heat

NA wines age similarly to regular wine (except in cans)

NA wine markets - still in growth mode, needs higher quality wines to succeed

• The US is ahead of most markets, and the UK is slower with more traditional drinkers
• Mainland Europe is booming, and NZ is behind
• Most off-premise, some growing pains (e.g., Boisson closed its stores), mostly bought where people buy alcohol
• On-premise still embracing category (Giesen launching super premium range to target on-premise)
• Most large players (e.g., Constellation, Treasury) are looking at NA wine

NA wine drinkers - originally abstainers driving growth, now people substituting wine driving growth from moderation trend; broad market from boomers to legal age Gen Z; 35-60 females largest cohort

Price points aligned with regular wine ($9 low end, up to $18/bottle, some products ~$55/bottle)

Removed alcohol of high quality can be used for other things (e.g., gin, biofuel)

NA wines can have up to 0.5% abv, Giesen wines 0.4-0.5% abv

• You need to consume 5 bottles of NA wine to get 1 glass of 13.5% ABV wine
• .45% abv similar to ripe bananas, some fruit juices, bread
• NA wine should still be kept away from children as it is still a wine experience

Marketing NA wines

• Low calorie is significant; Giesen is low in sugar (drives calories), which plays into the health and wellness trend
• Most effective - social media and influencers - play well with Millennial and older Gen Z’s, essential NA wine growth category
• Older consumers know Giesen from regular wine

Nutritional and ingredient labeling - mandatory for regular wine in the EU; NA is a food product and requires it

• Giesen back labels specific for each wine, the main driver of differences are in sugar content
• Nutritional data has some positive elements (e.g., potassium)
• Large serving size (12 ounces, ~½ bottle) driven by US FDA, looking to change back to a 5-ounce glass

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Detailed Show Notes: 

US 3-Tier System

• Put in after prohibition to keep one tier from owning alcohol distribution
• Tiers - producer, distributor, retailer

US distribution heavily consolidated into 3 large ones, lots of smaller specialty distributors vs. many distributors in the 70s/80s

Distributor function

• Helps consolidate suppliers for trade accounts; accounts don’t have resources to manage each supplier separately (e.g., invoices, checks)
• Pay taxes, do compliance
• Logistics (heavy, fragile product)
• Customer service (mistakes, breakage, returns, samples)
• Sometimes act as a winery’s salesforce

Getting a distributor

• 2024 - distributors are shedding brands vs. taking on new ones
• Typically - look for fit w/in a distributor’s portfolio, pick someone with a good reputation
• Distributors will ask - what will be your investment in the market? How often will you be here? Do you have feet on the street?

LibDib - enables wineries to sell themselves, a tech-enabled distributor

• Started as a wholesaler in 2017 (CA, NY), enables distributor for any producer
• The platform enables rich content and e-commerce
• Has license in 9 states, enabled through RNDC in 6 states (e.g., Texas)
• ~1,500 suppliers w/ active accounts, ~700 wineries w/ ~450 actively selling
• Originally focused on spirits, wineries have increased by ~50% in the last few years
• Uses FedEx to send wine, integrated API to track status, negotiated good rates <50% of DTC rates; have cold chain, ice pack options for hot temperatures
• New markets launching late 2024 / early 2025

LibDib use cases

• Get wine to specific accounts in a market
• Enable wine brokers in other states
• Importers sell directly to accounts
• Ship special projects from large wineries that distributors don’t want to touch

Pros/cons of LibDib

• Pro - always have distribution, good communications/customer service, good technology experience for producers and trade accounts
• Cons - no salesforce, need to be a little tech-savvy

Business model

• Markup of 14-18% on sales (vs. 30-35% for most distributors) + producer pays for shipping
• Subscription service (Gold, Silver, Plus) - get lower markups and services (e.g., portfolio management, VIP chain assistance, advertising on platform)
• ~250 subscriptions (of 1,500), mainly on Gold for chain services

RNDC partnership - OnDemand division

• Onboard w/ both RNDC and LibDib, no sales support
• 28% markup, inclusive of shipping
• 6 states, ~400 suppliers
• Most people want to get regular distribution, which can act as a trial for RNDC

Trade account benefits

• ~30k accounts (~50% active), not including RNDC states
• No minimum shipments
• Enables direct contact w/ wineries
• Access to smaller items not available elsewhere

LibTech (launched Jan 2024 in TN)

• RNDC invested in the last round, and LibDib built e-RNDC
• Selling e-commerce platform as SaaS to other distributors

LibDib is developing AI tools for suppliers, early 2025 launch

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Detailed Show Notes: 

Finger Lakes region, NY - 150 wineries (of 400 in NY), NW NY State - 5 hrs from NYC

• Skinny, deep lakes that moderate weather
• Glaciers left diverse soils
• Tourism-driven, seasonal visitors (spring to fall) for lakes, hiking, close to Niagara Falls, Corning Museum of Glass

Dr. Konstantin Frank - PhD in Viticulture from Odesa, Ukraine; a grape scientist; fled to NY during WWII

• 35 years of cold climate grape growing experience when moved to NY
• 1st to plant vinifera in Eastern US
• Planted experiment station in the 1950s - 68 varieties, including Furmit, Pedro Ximenez, and Touriga Nacional) to research what would work best

Dr. K Frank Winery

• 17 vinifera varieties → 40 wines
• 60% wholesale, 40% DTC
• 40 states, 9 export markets (5%, incl Japan, Aruba (lots of NY visitors), UK)
• DTC 60% e-commerce (driven by wine club), 40% hospitality

Hospitality program

• The goal is to create brand ambassadors and loyalty, get the word out about the Finger Lakes
• Inspired by Australian hospitality programs - private, educational
• ~40k visitors/year (#1 PA - 1 hour away, NJ, OH, NY core markets) - all seated, paid
• Pre-pandemic - ~80k visitors/year for free bar tastings
• Moved to an experience-driven program with wine educators, take advantage of lake view

Three experiences:

• Eugenia’s Garden - modeled after great grandmother’s garden, most casual, can do a la carte glasses/bottles/flights; enables people to enjoy the day; targets a younger demographic
• Signature Seated ($15pp) - most popular, educational, 1 hr, 6 wines, 5 different themes that are part of the winery’s story (e.g., traditional sparkling, Riesling pioneer, groundbreaking grapes, red wines)
• The 1886 Wine Experience ($75pp) - only May-Oct, 2-2.5 hrs, led by wine educator, a tour of the vineyard, sparkling and still wine cellars, seated tasting of 4 wines with bites, followed by additional tastings; won best wine tour by USA Today last 2 years; lots of 1st-time visitors book 1886 due to unique nature
• Lessons learned - used to do 6 wine flight w/ bites, which was too many; did themed months (e.g., sparkling) - did not work with mostly tourists
• Differentiators - spend lots of time, has a separate private space for 1886

Wine club evolution

• Used to have people pay upfront for the year - bigger barrier to signing up, always feel like “playing catchup” to ensure value delivered, concentrated work during shipment periods
• Moved to more subscription model - quarterly, 3 wines w/ default package, fully customizable, no upfront fee, 20% discount on wines, and get free tastings (no limit)
• 8% club conversion - the only way to get free tastings now, used to waive w/ 4 bottle purchase
• Locals small portion of the club - pickup option only 10%, PA #1
• Avg tenure 1.5 years, seeing it extend with the new club model

Popular wines

• Hospitality - Rkatsiteli #1, traditional method sparkling
• Wholesale - #1 & #2 - dry & semi-dry Riesling
• Riesling 60% of production, traditional method growing

Increasing issues around climate change - 2023 had the largest spring frost in history, increasing water issues

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Detailed Show Notes: 

Covid altered the business model, led to re-structured organization and unified media and commerce divisions on wineenthusiast.com

2022 - WE paused reviews for emerging wine regions to recalibrate systems

Existing tasting process

• 1 of 2 publications that review every wine blind (high cost), taste in flights w/in region and price brackets
• Need to store, archive, organize wines, set up tastings (in paper bags with numbers), and hire reviewers
• 50% of reviews are done at HQ (imported wines), and West Coast wines are done locally
• The manual process of filling out a pdf and putting that into the box with wines, manually inputted into J Guide (legacy system, 20 years old), then stored and organized for tasting

New tasting platform (Sept 2024) - anyone can submit a wine for review and all will be reviewed

• New digital platform - bar code scanners, printed tabs, can track shipments and deliveries, a more fluid database
• Reduces large volume of questions from people submitting wine (can track digitally)
• It has the same # of reviewers, but a more flexible infrastructure can allow for more wines to be tasted
• $65/SKU processing fee - all reviewers charge in some way (e.g., require subscription, membership, or advertisement)
• 6-month processing time (same as before) - hope to reduce this over time, based on the schedule of reviewers
• Printed reviews selected by the tasting dept, all scores published online for free

Tasting platform benefits for new and small wineries 

• Opens up reviews to all regions across the globe
• The US market is still heavily score-driven for distribution (some major retailers, e.g., Costco, Kroger, Albertsons, require scores from major publications)
• Helps with tasting room and local distribution sales

Media trends

• Print is still doing well (e.g., books outsold movie tickets last year), and magazine subscriptions are increasing (free tote bags help)
• Advertising up slightly 
• Digital media is growing, with a targeted advertising focus
• Events - biggest growth area - launched Sip of South America, Sip of Italy, and biggest event is Wine Star Awards (25th Anniversary in SF this year)
• TikTok now allows alcohol advertising, getting Gen Z engaged with wine knowledge

New travel division for WE

• Tasting room directory, partnered w/ Tock - 1st agnostic travel global wine travel guide
• Leverages Tock’s wineries as launching list (~1,200 wineries, CA focused), building out globally with WE relationships (~100 wineries reached out in 1st month to be included)
• The 2nd most trafficked page on the site

WE revenue mix

• Covid - led to explosive commerce growth
• Today - back to 2019 levels, ~80% commerce / ~20% media

Getting Gen Z engaged with wine

• Print enables content absorption without ad bombardment (e.g., book reading bars in NYC)
• Need to change content for each channel to target audience (e.g., Google as people’s “secret diary,” article on how to hold a wine glass became a top 5 article)
• Influencers, infographics, video - bring in new consumers (e.g., wine & potato chip parking article led to major influencer doing every pairing on TikTok)

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Detailed Show Notes: 

Morgan’s background - wine PR, been in wine for ~15 years, became a yoga teacher in 2017

Wine & Yoga synergies

• Both are about mindfulness - yoga and the wine tasting process
• Not for hard-core wellness or yoga people

Vino Vinyasa 

• For the yoga teacher exam, the teacher encouraged something different, tried yoga & wine, and got a fantastic reception
• 6 cities - NYC (2017), Austin (2018), Nashville, Chicago, LA, Houston

Vino Vinyasa programming

• 45 min Vinyasa yoga (all levels), followed by wine tasting of 2 wines
• Taste wine after yoga - people are relaxed and have “yoga brain” in a quiet, focused environment → people may be better tasters
• Embed wine facts during yoga
• A comparative tasting of 2 wines, usually themed (e.g., Rose, Sauvignon Blanc)
• All instructors have a wine background (min WSET 1)
• 2-3 classes/month, 20-25 people/class for intimacy (capped at 30)
• ~30 classes/themes developed to date
• Very intentional class structure, certain poses not suitable for teaching

Business model

• The core business is to get people to do more classes and events, not be overly salesy with wine
• Do private events (90% are bachelorette parties)
• Sell swag (t-shirts), co-branded bottles
• Look to be good value (avg class price $30) vs. regular yoga classes (avg ~$20-25, range from $10-35 for drop in class)

Students often seek out wines after classes

Wine selection for classes

• Venue dependant, venues carry liquor licenses
• City Winery (NYC) - chooses the wines based on their selection
• Other venues - can get wines donated for classes
• Private events - Customers can select wines/themes
• Have worked with PR clients for wines
• Some wineries sponsored virtual classes during Covid

Marketing

• PR background has helped and got early press (e.g., digital Good Morning America), mostly wine market
• Email newsletter
• IG is the best channel, does some boosting, and is focused on growth during Covid (~11k followers)
• Digital marketing has focused on both wellness and wine people
• ~15-20% of people have attended multiple classes

Private events

• Bachelorette parties, birthdays, corporate events (e.g., Binny’s in Chicago)
• The focus area for growth
• Same format as classes

Wellness & wine market

• Other wine + yoga classes are not educational; some are tied to multi-level marketing wine programs that have long sales pitches
• Sees more yoga at wineries
• They have been approached by a couple of spas for partnerships, but the economics were not favorable yet (i.e., yoga teachers often are not paid well, ~$30/class)

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Detailed Show Notes: 

Biondi Santi’s history

• Family invented Brunello di Montalcino
• Founded in 1888 - Ferruccio Biondi Santi had a vision of quality wine with longevity during a time when people focused on quantity with wine as part of the diet
• Bottled in Bordeaux-shaped glass (a sign of quality) vs. standard Tuscan fiasco
• Tancredi Biondi Santi - one of the top consulting winemakers of the time, was asked to write appellation rules in 1967
• Franco Biondi Santi (“the doctor”) - selected the BBS11 clone in the ‘70s and organized a 100-year vertical tasting (1888-1988) in 1994 with important wine writers that boosted the image of Brunello. One writer gave the 1891 vintage 100 points

La Storica (wine library) - has all vintages since 1888, releases one old Riserva with a current Riserva each year

Path to Iconic Status

• The vision of the family - be good winemakers, high-quality
• In the global market regularly → elevated the Biondi Santi to a different level
• The wine offered to Queen Elizabeth II in 1967 was a favorite of Frank Sinatra’s

EPI acquired Biondi Santi in 2017 and installed Giampiero as CEO; the community was skeptical of French owners for an iconic estate had to convince neighbors by being transparent about what they were doing at the estate

• Before the takeover, prior 20 years, the business was not run well
• Rebuilt global distribution, did not have US distribution
• Re-connected with trade, critics, and consumers/collectors

What they kept the same

• Reinforced market position
• Style of the wines
• What they changed
• New vineyard philosophy (regenerative), replanted vineyards to improve quality, conducted soil studies
• Increased communications and more selective to the right people and thproperht channels
• Managed pricing to reposition the brand to increase demand

Keeping the brand fresh

• want s to be closer to the trade and consumer, spend more time in the market
• Storytelling of what is happening at the estate, not just the history, but today’s actions that protect the future
• La Voce di Biondi Santi - started 3 years ago, selects one word each year that is part of their philosophy (this year is “respect”); creates novel/audiobook based on a keyword (e.g., Joanne Harris, author of Chocolat) and podcasts with winemaker and Giampiero around the keyword

The most effective initiative so far - repositioning the brand by increasing price → gave higher credibility and put the brand up another step, old vintages increasing in price on the secondary market, high demand on Liv-ex (one of few growing while price increasing), one of the top 35 wines in the world on Liv-ex

Growth for Biondi Santi = value growth; volume is complex to grow

Value-driven by increasing distribution globally to rarify the brand further, not just taking price, but increasing value, which is a consequence of many conditions, and not rushing value creation in the market

Biondi Santi is now in 2.0 after 1st five years, and the next step is to increase the quality of its presence in the world and be closer to partners and consumers

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Detailed Show Notes: 

Italian Wine Podcast

• Initially created to develop content for VIA candidates
• Something different every day - up to 9 episodes published / week
• Example shows: Ambassador’s Corner - Italian Wine Ambassadors go deep with their favorite Italian producer; US Market Focus - different perspectives on the US wine market
• Now ~2,000 episodes, they had to switch podcast distributors to Megaphone (Spotify) as most only host up to 500 episodes
• Audience - early on, was ~80% US & English speaking countries (the podcast is in English), and VIA students
• ~6M total downloads with a broader audience than Vinitaly attendees

Funding the Vinitaly complex

• Significant investment by Veronafiere, which is majority-owned by the city of Verona
• Italian Trade Agency subsidizes some events - e.g., pays for transport for judges for 5 Star Wines
• Some ticket sales and sponsorship revenue
• Podcasts funded by Stevie personally

Veronafiere saw value in investing in Vinitaly products

• Wanted to become more international
• Allowed Stevie to experiment with new products and invest in them

Stevie’s team has a large staff of content producers (video, social media)

• Document everything they do
• Create tons of content, of which only ~50% is used
• Stevie believes in being prolific - promotes discovery

Marketing products

• Never advertise on LinkedIn - it is too expensive
• Instagram - sometimes does advertising, conversion doesn’t happen on IG, try to drive to the website to convert, more for attention vs. conversion
• Facebook - most wine producers on FB, more effective and efficient, can get ~$100k subscription revenue from ~$5k ad spend
• Less concerned with “vanity” metrics like views and engagement, more interested in conversions

Looking forward - wants to bring more people to Italy and Vinitaly - it is the best way to convert people to Italian wine

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Detailed Show Notes: 

Stevie's background: born in Korea, grew up in New York, married an Italian, and moved to Italy; Veronafiere recruited her to lead Vinitaly

The Vinitaly "Marathon" (2025 schedule)

• Vinitaly Int’l Academy ("VIA") - 5 days 
• 5 Star Wines - 3 days (April 1-3)
• OperaWine - 1 day (April 5)
• Vinitaly - 4 days (April 6-9)

Also, do events outside of Verona (New York, China, Hong Kong)

Vinitaly - established in 1967 in Verona

• It started as ½ pavilion, now 14 pavilions
• Largest Italian wine event, primarily B2B
• The entire town of Verona becomes Vinitaly
• Vinitaly in the city events for consumers
• ~4k wineries (~60% of export market), accessories, winemaking equipment
• About building long-term relationships - "the Italian way" - not just about doing business vs. Prowein's more business-oriented

OperaWine

• Partnered with Wine Spectator as the most influential entity for Italian wine
• The winemaker or principal must pour
• By invitation only, each producer chosen (130 producers) gets 10 invites

VIA

• 1,300 candidates so far, 398 certified Italian Wine Ambassadors
• Used to do Vinitaly tours and masterclasses globally, now transformed to VIA
• Developed based on Stevie's experience building a medial master's program that created a deep community
• Faculty - Sarah Heller MW, Attilio Scienza - vine geneticist
• Difficult exam, deep and wide syllabus primarily based on grape varieties, uses Italian Wine Unplugged 2.0 as the textbook
• Has a course that includes 4 days of tasting ~300 wines before the exam
• Requires a group video project to ensure ambassadors can speak about wines
• Creates a big community around candidates and ambassadors - more important than the material itself

5 Star Wines (fka Vinitaly Int’l Competition)

• Gets international judges & VIA community opportunity to taste and rate Italian wines
• Helps producers - 90+ scores get a diploma during Vinitaly to display, which helps attendees navigate booths
• Did a masterclass for producers w/ top scoring wines on why they scored highly, which helped them understand quality better
• Every tasting panel has an enologist, enabling the international community to connect with Italian winemakers

Wine2Wine business forum (Nov - after harvest, before Christmas)

• The goal is to help producers better prepare for Vinitaly
• Historically, they had 40-70 workshops on business topics
• 2023 - did tastings where wine critics taught how they assess and rate wines
• 2024 - getting an overhaul, no parallel session, 8 plenary sessions, 6 tastings, new structured networking - rooms led by specialists w/ 10-12 attendees

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Detailed Show Notes: 

Giampiero's background - studied economics, worked at Procter & Gamble, entered the wine industry by chance

Brunello di Montalcino - hill in Tuscany, b/w coast and Apennine mountains, protected by mountains and with altitude

• There are lots of different soils, and each location on a hill is different
• Sangiovese - only appellation in Italy with only one varietal, >150 clones (Biondi Santi uses 46 clones)
• 1967 - 78 producers; today >250

Quality has improved over the last 20 years, with more emphasis on viticulture

1970s - Franco Biondi Santi trialed 40 clones and chose BBS11 for their soil

Regulated production system

• Created by the Biondi-Santi family in 1967
• Limited yields (Brunello - 8 tons/ha; Rosso - 9 tons/ha)
• Strict aging requirements - barrel min 12 months (Rosso), 24 months (Brunello, Riserva); bottle min 4 months (Rosso), 24 months (Brunello, Riserva); Brunello min 5 years total
• Samples tasted by the Commission panel
• Appellation expanded ~20 years ago, now frozen at 2,100 ha
• 2023 - Rosso appellation expanded (550 → 900ha)

Biondi-Santi has a target style for their wines and matches vineyard lots to create style (~60% Brunello, 25% Rosso, remainder Riserva when made)

Some producers make single vineyards now (both Rosso and Brunello), but Biondi-Santi is not focused on that

The most expensive vineyard land in Italy ~₠1M/ha, a significant rise in 2015 when the 2010 vintage was released

Foreign investors (France, Brazil, Belgium, Swiss) are increasing the value of the land

Market for Brunello

• The biggest is the US, developed by producer Banfi
• Other vital markets: Switzerland, the UK (higher-end wines), Hong Kong, Italy

Sales Channels

• Rosso - more casual restaurants, wine bars, BTG
• Brunello - 50/50 on and off-premise
• Riserva - mostly high-end retail as it is for collectors

Future of Brunello - hopes the focus is on value and quality and not higher volume

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Detailed Show Notes: 

She finished university in Milan, started making wine in 2004, and is interested in natural wines that speak of terroir

Based in Vittoria, Sicily, she makes wines from reds (Frappato, Nero d’Avola), whites (Albanello, Zibbibo, Grillo)

• Started w/ 1ha farm in Fosso di Lupo (Frappato, Nero d’Avola)
• Cultivates a pluricultural farm for biodiversity - vineyards, orange, pear, wheat, vegetable garden
• 2006 - built a small winery
• 2013 - moved to another farm in Bombolieri

Terroir - limestone (lots of fossils), red sand, 250m above sea level, 8 km from the sea, 8 km from mountains, windy and dry -> lead to low pH wines

1st meeting with Louis/Dressner in 2006 at a Vinitaly adjacent natural wine fair

• 1st presentation of wines
• Kevin McKenna tried the wines and got Jules Dressner to try them, where they immediately asked if they could import them
• Still working together, they are “very pure people”
• One of the 1st Italian producers that Louis/Dressner represented

1st trip to US (“Real Wine Tour”) - Louis/Dressner organized a young group of producers, with a lot of energy that toured the US

Traction partly from being an early mover in the natural wine movement

At the time, San Francisco (and Paris) were leading the world for natural wines

• Natural wine bars (e.g. - Terroir Wine Bar)
• Leading restaurants (A16, Bar Agricole)
• LA (Domaine LA) and NY followed
• Sommeliers promoted the wine and created strong relationships

Traction was a combination of wine quality and consistency, restaurant promotion, and good communications

Convincing people who know a lot about wine (e.g., sommeliers) helped

In the US market ~1x / year

Louis/Dressner did a great job of selecting wine producers and having good relations with their clients

Advice for others - do everything with passion, potentially spend more time on trips to spend more time with people

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Detailed Show Notes: 

Antinori Family - started in wine in 1385 as wine merchants in Florence and became a producer in the Chianti Classico region

• Alessia is part of the 26th generation, the 27th generation also in the company
• Father was part of the important 25th generation - in the 60s/70s changed towards a quality mindset vs. quantity focus for most of Italy, e.g., launched Tignanello (1st Super Tuscan)
• “Blending tradition and innovation”
• Family members are not obliged to join the company but grow up around the winery

Primum Familiae Vini (“PFV”)

• Founded in 1993 by Joseph Drouhin and Miguel Torres wineries
• Current members include Vega Sicilia, Pol Roger, Chateau Mouton
• 12 members, family-owned, old world (the exception was Opus One w/ Mondavis and Mouton Rothschild)
• When a family sells, a new winery is invited, often from a missing region (e.g., Jaboulet replaced by Beaucastel to keep a Rhone producer), look for high quality, shared values, and families get along (including children)
• Exchange one case of wine with each other every Christmas

Family businesses are important to: 

• Transmit values from generation to generation (e.g., for Antinori - passion, integrity, obsession for quality)
• Can make decisions for future generations (long-term mindset)

Two committees in the PFV - marketing & technical

• Meet 3-4x / year virtually or in person
• Meet at least 2x/year (1 annual meeting - 2024 in Oregon hosted by Drouhins)

Annual Meeting

• Up to 100 people, several generations per family
• Business meetings, lunches, dinners
• Each year, a different family hosts an event and then becomes President of PFV for the following year
• Topics - technical (Torres often has good topics), issues in family businesses, sales, legal issues, future PFV planning
• Mostly, internal PFV presenters

Promotion/marketing events

• 2024 - after Oregon hosted a press tasting in Napa
• Usually, press, charity, or walk-around tastings

PFV Family Prize - “the most beautiful company of the year”

• Family-owned businesses, not only wine, must have 3 generations working in the business
• Receive financial and market support/cross-promotion
• 1st year was a Belgian violin company
• Given every two years
• Do an event together with the press to present the award

PFV is funded by an annual fee from members

Collector Cases

• Haute Couture case - 1 back vintage, iconic wine from each winery, only for charity, includes the PFV Passport, which is an invitation to visit each winery with lunch or dinner with a family member (many wineries closed to the public)
• Limited Edition case - 1 recent vintage wine for each winery can buy for €25k

Advice for other family wine businesses - be very passionate about the work, be curious and passionate

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Detailed Show Notes: 

Ferrari Trento overview

• Founded in 1902 by Giulio Ferrari
• 1952 - Bruno Lunelli (Matteo’s grandfather) acquired the winery
• Trento DOC in NE Italy, in the middle of the Alps, famous for the Dolomite mountains
• A leading brand for luxury sparkling wine in Italy
• Methodo Classico - 2nd fermentation in the bottle
• Mainly Chardonnay, Pinot Noir
• Mountain sparkling wine - gets sunlight, but big diurnal shift to keep acidity
• Pioneer of Trento DOC, started denomination, now 60 wineries
• Won Sparkling Producer of the Year several times
• All estate vineyards are certified organic, winery carbon neutral

Il Ferrari (masculine, the wine) vs La Ferrari (feminine, the car); separate companies, no familial relation

Formula 1 (“F1”) partnership - “Official Toast of F1”

• Started as a dream, Matteo passionate about F1
• A team member who used to work at Heineken, which sponsored F1, started the conversation in 2019
• Share common values of search for excellence, tradition, and innovation
• Started in April 2021
• Jeroboam used to celebrate wins on the podium, served in Paddock Club (hospitality)
• F1 exploded with Drive to Survive movie on Netflix
• New races started in Miami and Las Vegas
• Formerly used Champagne, 1st Italian wine used to celebrate
• ROI is measured by growth in international sales (US sales 3x, TX 10x, Las Vegas huge growth since 2020), increased attention from key international accounts

Key benefits of F1 partnership: 

• Visibility - social media key, particularly pics with drivers showing bottles during the celebration (easier to do for sparkling wine)
• Paddock Club - >5,000 guests in Las Vegas, serves fine dining during race weekends, high-end clientele experience Ferrari Trento, fine dining, and F1
• Create customer experiences - invite some customers to F1
• Race weekend activations - organize and partner with events around the race weekend, replaced prior market work
• Best article - Financial Times “Why there will always be a Ferrari on the podium of F1”

F1 label series - limited, special editions

• Big interest in Jeroboams, celebrate like F1 champions
• F1 Editions - dedicated to some of the iconic Grand Prix, the shape of the racetrack on the label, very successful in race markets (e.g., Suzuka in Japan had a long time to buy wine)
• Creates a collectible wine

Emmy Awards sponsorship

• Ended w/ Covid, sponsored for ~5 years
• Served at Governor’s Ball just after the show, ~5k guests, black tie in LA
• Helped in the CA market and positioned Ferrari as a lifestyle brand
• Timed well w/the rise of importance of TV (e.g., Netflix/streaming movement)
• Only 1x/year vs 20 races/year w/ F1
• 1st non-Champagne organized blind tastings w/ prior sponsors

Creating value w/ partnerships requires activation and communication; the rule of thumb is to invest at least 1x sponsorship fee in activations

Mass market partnerships like F1 benefit Non-Vintage more than vintage/reserve wines

• Vintage/reserve wines sold mostly to collectors, highly limited supply (only 60k bottles of Giulio Ferrari/year), and need different communication channels

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Detailed Show Notes: 

Charlotte’s background - dairy industry, lived in Asia and the UK, in wine for the last 20 years

NZ Winegrowers

• Est 2002,1,400 members (50% wineries, 50% growers)
• Only unified winemaking and grape-growing organization
• Funded by compulsory levies
• Mission: to enhance the reputation of NZ wine
• 5 key workstreams: Brand, Environment, Efficacy, Research, People

Tagline - “NZ wine, all together unique”

Supports the 10 wine regions

NZ exports 88% of their wine to 100 countries

Top markets - US (~40% of exports), UK, Australia

Focus markets - Canada, China

Focused on white wine (93% of exports) for May - 3 events, Sauvignon Blanc Day, Pinot Gris Day, and Chardonnay Day

White wine emoji - leading a campaign over the last few years to have this implemented

• Kendall Jackson previously campaigned for it
• Changed the glass shape to focus on white wines
• Gotten great press
• Reached >20M people in 2022, 79M in 2023

NZ has significant wine diversity - >50 grape varieties planted, SB #1, Pinot Gris, Pinot Noir (largest red, 3% of exports)

NZ wine style - purity of fruit, backbone of acidity

Marketing metrics used - estimated advertising value, reach and engagement, social media engagement, toolkit downloads

Lighter Wine Research Project - 7 years, $16M project w/ 18 wineries and government, led to the early launch of no and low alcohol wines (e.g., Giesen 0%, Kim Crawford Illuminate)

Overall, wine imports to the US are down, but NZ has outpaced the market; premium price ($15+) grew 15% in 2023

Targeting a group of “Generation Treaters” (mostly Millennials) - 1/10 of drinkers, but ⅕ of spend

Can cross-promote white wines - 63% of SB drinkers drink Pinot Gris, 67% of SB drinkers drink Chardonnay

NZ as innovators - moved to screw caps early (early 2000s), fast adopter of concrete eggs, experimenting with green tea as a preservative, no alcohol wine residual alcohol used for gin

Highest impact marketing - influencing the influencer (e.g., a WSET partner, work with Sommelier associations)

Major events

• Has a booth at ProWein and Vinexpo Hong Kong
• Hosts International Sauvignon Blanc Conference every 4 years (2027)
• Hosts Pinot Noir Conference in between (Feb 2025)
• Sommit - summit for sommeliers, a master class setting

Trends to watch

• Sustainability (NZ has 96% of vineyards certified sustainable)
• Packaging innovation
• Growing wine tourism

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Detailed Show Notes: 

Insurance trends - very volatile now, Covid supply chain issues, wildfires / other natural disasters

Rates are soaring

FL/CA - natural disasters happening more, impacting insurance

If >5 mi from a fire station, insurance premiums can be double

Winery insurance is a niche market, so it is better to have expertise

• Leakage & contamination are a big issue - often wineries do not have enough coverage
• General liability and liquor liability are base levels of coverage
• Rest is optional - a winery should look at what will break the business if it happens
• Premiums based on gross sales, inventory, and assets (e.g., buildings, barrels)
• Range of costs - small wineries ($1,500-2,000/year), larger wineries ($50-60k/year)

CA - many companies have stopped writing business

Sometimes, there is state coverage for catastrophe-only coverage

Insurers often value inventory based on “final destination” (e.g., DTC vs. wholesale)

A wine library with increasing value should be looked at annually to see if coverage needs to be adjusted

Vineyard insurance is different from winery

• Farm policy for an agricultural commodity (e.g., for runaway tractors)
• Crop insurance, which is federally subsidized, covers annual crop value and covers against smoke taint, fire, etc…; often can insure at different value levels of the crop
• Can buy specific coverage for vines and equipment in vineyards
• Climate change mostly impacts crop insurance vs farm policy

Base level of insurance needed for winery w/ vineyard

• Winery policy - covers tasting room, production, buildings, the commercial business
• Farm policy - covers vineyard, buildings, farming operation, home autos
• Depending on assets - umbrella policy to cover assets (e.g., drunk driving accidents are expensive)

When to stop buying insurance?  Need a good agent who is your advocate

Value of a broker vs. direct from the insurer - can provide different options of insurance, the downside is they do not know policies as deeply

Wine Crush Podcast

• Share stories of winemakers, encourage people who do not drink wine regularly to try it
• Mostly OR wineries, expanding to WA, ID

Key trends for wine insurance - circling in on natural disasters and how they affect policies

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Detailed Show Notes: 

Wine Market Council (“WMC”) - non-profit, formed in 1996

• Mission - provide cutting-edge research on the US wine consumer purchasing habits, trends, and attitudes
• Members use WMC data for marketing and brand strategies

US wine sales

• From 1934 - today - there have been several declines in consumption
• The last decline - 1990s - showed similar factors, increased anti-alcohol groups, large excise taxes; catalysts to growth (French Paradox, introduction of new products - e.g., White Zinfandel, wine spritzers, Merlot getting popular)
• Growth for 20+ years from the late 1990s, peaking during Covid
• 2022 - decline in volume sales, 2023 - decline in volume (-9%) and $ sales

WMC does a benchmark segmentation study of wine consumers every 2 years

• Has done 19 over 27 years, the largest database of wine consumer trends
• Boomers - drinking less (61% cutting alcohol, faster than expected)
• Millennials - finally coming to wine, took until they were in their 30s (have children, bought homes, settled down, more financially stable); spend more on wine (often $20+)
• Gen Z (oldest is 26) - had high wine adoption initially, but in the last 3 years, it has declined (“cool to be sober”); 9% of Gen Z drinks wine, though only 33% are of legal drinking age; concerned about transparency of products (saw food scares, recalls), climate, and social equity

Wine drinkers are 60% married, 71% own homes, 53% live in suburbs

Ethnicity diversification making progress

• By 2050, the majority of the US will be non-white
• Today’s wine drinkers are 66% White (vs. 77-78% in the past), 15% Hispanic, 11% Black, and 5% Asian
• Significant progress with Blacks and Asians, but less with Hispanics, which are the fastest growing population in the US
• Ceja an example of a successful Hispanic owned winery, links wine and Hispanic cuisine and been successful
• Other ways to enhance diversity - ads that look like “us,” diversity in the workforce, pop up events where the consumer is (e.g., a Mexican wine importer did pop-ups at Hispanic events with taco trucks)

Premiumization is still happening, people drinking less, but better

• $20+/bottle drinkers are now ~7-15% of the total US population
• Younger people (21-30) purchasing more high-end wine
• Boomers dropping buying more expensive wines

Where people buy wine

• Supermarkets
• Wine shops
• Online now 12% vs. 5% pre-Covid
• 29% buy on their phone

93% of wine consumers on social media

• #1 Facebook (Boomers)
• YouTube - 61% use
• Instagram - 55%
• TikTok - 40% (wineries can’t advertise, but influencers can post)
• X/Twitter - went from #2 to #6
• Wine apps - 17%

2024 trends

• Anti-alcohol movement 
• Talking about the benefits of wine (illegal for alcohol brands to discuss health) - WMC launched a social campaign called “Wine is…” (e.g., wine cocktails, family dinners…)
• Transparency/ingredient labeling (e.g., 50% of Americans believe wine has added sugar)
• Low / no alcohol movement - 40% of wine drinkers drinking less (of those, 40% drink non-alc spirits/cocktails, 35% NA beer, 34% NA wine)
• RTDs / single serving sizes

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Detailed Show Notes: 

Background - mostly wine retail, did harvests in France (Vieux Telegraph, Chandon de Brialles in Burgundy - 2012-2014)

• Inspired by Kermit Lynch, he was interested in writing

Offshore Wines Portfolio

• Christian Knott of Chandon de Brialles started a new project, Domaine Dandelion, and asked him to import them
• 2017 - 1st shipment - 4 cases of Domaine Dandelion, 20 cases of Champagne Charles Dufour
• 15-20 producers now
• Goal: find high-quality wines made in an artisanal way from lesser appellations that are “affordable”
• “Affordable” = $30-100 in US retail

Starting an import business

• He did it on his own, with no lawyers
• ~2 months to get a license, ~$1-2k in fees
• Need a licensed warehouse to receive wines (uses CA Wine Transport)
• Self-financed 1st shipment

Cash flow is challenging

• 2-3 months for wines to land in warehouse (from France)
• Restaurants/retailers get 30 days terms
• Payment to wineries varies - most ~60-day terms from shipment, while others want payment upon shipment or 50/50 terms (upfront and on delivery)

Lifestyle is fun, traveling and visiting rural areas

Choosing winery partners - a lot is timing, being at the right place, getting to know communities, and very relationship-based; most wineries are referrals from existing relationships

Offshore differentiation - speaks the winemaker’s language (French, Spanish), worked production, and is building deep personal relationships

• Wineries are exclusive to CA, and only market Offshore works, though they sell to a small distributor in CO
• Focus on small producers precludes needing to be in all 50 states
• Optimal portfolio size ~25 wineries to be able to respond and represent wineries well
• Gets wine out for people to taste them, prefers personal connections over social media
• Shares other aspects of what people are doing (e.g., got and gave away bags of coffee from a producer experimenting w/ carbonic coffee bean ferments, giving away sweatshirts from Domaine Hausherr with an artistic word game on the back)

Devon is the only salesperson now, and he would ideally like 1-2 salespeople

• Other salespeople have opened doors for him to help him

Building small brands

• Many people struggle with name pronunciation
• He tries to share wines, stories, and pictures of brands
• He doesn’t agree with the need for scores and tasting notes; he uses email to share stories, wants to publish a newsletter eventually
• The new style of wine writing can help small brands - e.g., Alice Feiring, Ray Isle’s new book

Advice for others - be able to sell the wines

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Detailed Show Notes: 

Background

• Founded KOT in 2011 - they couldn’t get the wines they were buying in Singapore, three partners
• Work w/ 57 winegrowers, mainly in Europe, 6 in the US

Singapore wine market (~6M population, ~20% Muslim - don’t drink)

• No 3-tier system, no gov’t monopoly
• It is a pretty open market, like the UK
• Many players are vertically integrated - import, distribute, retail - with lots of captive distributors and retailers
• Very low barriers to entry - founded KOT in 2 months for S$200 to get licensing and paperwork
• Horizontally spread - ~2-3,000 active importers (in 2011, ~700 importers, mainly focused on Australia/NZ with either big brands or high-scoring wines)
• Two casinos / integrated resorts provided the spark for other wines (e.g., Marina Bay Sands opened in 2011)
• Generally, 1-1.5 generations behind the UK and US wine markets

Took inspiration from other importers - Kermit Lynch (CA), Louis / Dressner (NY), Yapp Brothers (UK Rhone Specialists) - importing wines others were not

• Yapp - focused on winegrowers
• Dressner - spent a lot of wine visiting growers, good storytelling
• Kermit Lynch - newsletters (1970s) were key to storytelling for the wine growers
• Storytelling is critical to standing out in a crowded market

Sourcing strategy - most wineries they bought from personally (90%) were not represented in Singapore

• Informal rule - 5 visits to winegrowers between the three partners before they import
• Broad portfolios - easier to serve clients and fulfill their needs
• Focused portfolios - clearer story and differentiation
• Optimal portfolio size - ~50-70 to give each winegrower ~1 week/year of focus

KOT differentiation

• Market knowledge
• Links to trade, client base
• Trust of the people (have only signed one contract, mainly handshake deals, exclusive relationships) -> been burnt occasionally with generational change

Build brands in Singapore - a very organic approach

• Get the right people to taste them - professionals, and influencers / Key Opinion Leaders (“KOL”)
• Host tastings every year, even for highly allocated wines (e.g., Pierre Gonon)
• KOLs can drive demand

Int’l media have a strong influence - English is the primary language

• More important than local media
• Only the top few have an impact - The Wine Advocate (Robert Parker), Jancis Robinson (less emphasis on scores, more on editorial content)
• Robert Parker had a big impact on the local market; a Singaporean bought the company
• 100-point scores can drive sales spikes

Consumer data/reviews can start trends, increasingly important

• Vivino, Wine-Searcher, CellarTracker, Instagram

75% wholesale, 25% direct-to-consumer sales (mainly e-commerce)

• Private clients saw KOT through the pandemic
• Trade is vital for tourist demand

Singaporean wine trends

• New regions increasing, Japanese and Chinese wines
• Value increasing - ~$20-30 retail, ~$5-10 FOB
• The low/no alcohol trend is not a thing yet
• Rose has never been a trend

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Detailed Show Notes: 

Wilson Daniels (“WD”) overview

• Founded in 1978, they started as a domestic wine brokerage,
• In 1979, they were asked to represent Domaine de la Romanee-Conti (DRC) and became an importer
• Represents 37 families with ~50 producers, ~⅓ France, ~⅓ Italy, ~⅓ New World
• Owns distribution in 5 states
• ~35 sales managers, sells ~600k cases/year

Importer role

• Curate portfolio
• Distributor management - make sure strategy is executed
• Create messaging with the wineries
• Pricing - for WD, keep consistent around the country
• Education
• Channel mix - on/off premise, national accounts, chains
• Work with press
• Keeping wineries top of mind in trade - does a lot of events

Sourcing

• Sources wineries with estate vineyards, some with the ability to scale (~⅓ of the portfolio), look for regions where they will not take away from existing producers
• At optimal book size now, additions could be grower Champagne or 1-2 new Burgundy producers
• Grew portfolio a lot in recent years - ~20/37 families added in last 8 years, ~10 in last 3 years (including Gaja, Faiveley)

Distributor management

• With RNDC and Breakthru in ~50% of states
• Create groups within the portfolio to help distributors
• Manage pricing, inventory, programming (sometimes)
• Does not allow wine closeouts, prefers to buy back
• Fast Start program - incentives for new placements, not volume
• Wholesale Manager Bonus - for distribution managers, often trip-based
• Other support methods - ask to be on focus, market work, getting the producer in market

Marketing wines

• Crafting messaging is critical, and some producers already know what they want (e.g., Gaja wants to be known as 4 different wineries)
• Does a lot of grassroots marketing - events around the country at top restaurants, visibility of on-premise placements
• A lot of trips to wineries
• Iconic brands - taking care of the wine from start to finish, the allocation process is essential (~⅔ of brands are allocated)
• Lesser known brands - more about visibility, messaging is critical, can target a broader base (e.g., use more social media)
• Luxury - 3 key segments - sommeliers, collectors, critics
• For larger brands, does some consumer marketing: e.g., Bisol Prosecco - did 15 city tours, wrapped an Alfa Romeo car in Bisol green, did press, consumer, and trade events; went from 7k cases (2015) to 120k cases (2024)

Process for building brands in the US

• Create messaging
• Education - WD wholesale team, WD national team, distributors
• PR launch kit and sales kit
• Identify channel mix, including target account list
• Events (very different for each producer - e.g., vintage tastings for Biondi Santi, Faiveley; Gaja - white launch, Tuscan properties, Sicilian tasting)

Re-establishing brands that had poor marketing (e.g., Biondi Santi, Dal Forno)

• Need to work through inventory in the gray market
• Don’t lower prices to match the gray market
• Make a splash on new vintage releases
• Dal Forno - launches in the US 6 months before the rest of the world, helps reduce gray market activity

Private client group / direct-to-consumer

• ~300 people by invitation only
• Experience-driven
• Members support the entire WD portfolio

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Detailed Show Notes: 

Two types of brands

• Perennials - brands where accounts grow in value each vintage; very few become this
• Annuals - need to sell the same case to a new account each year; everything starts here

The goal is to build brands into perennials

Getting to perennials includes having value in the bottle, packaging (VC has three designers on staff), relationships (finding the right spots/customers for brands and supporting the accounts (staff trainings, consumer events)), identifying champions on the distributor sales team, and press

Creating brand value as an importer - consumers believe in the importer’s book through consistent producers and quality across the portfolio

Consistency helps develop brands

Marketing strategies to build distributor demand

• Press (primarily critics)
• Effective distributor work withs (distributors need confidence importer will support them)
• Creating credibility in the marketplace (trade events, work withs, samples, incentive/launch programs)
• Can’t outspend more prominent importers for incentives, need to create unique ones - e.g., one supplier affiliated w/ custom made shirts, created incentive around the shirts

Setting suggested retail price (“SRP”)

• Through tasting, looking at the competitive set, and where the winery wants to be
• $1 in home country becomes ~$3 at retail in US

Sales strategies

• VC has ten salespeople across the US
• Do work withs with distributors, but also on their own to not overwhelm distributor reps
• Partner with reps, sending recaps for follow-up

Sake - started in 2002

• He went to Japan to work in a brewery to study the process
• Had to make more accessible - standardized back label, 1st to put English names on front labels
• They use the same distribution network as wine
• Place importance on education; VP of Sake Monica Samuels is a great educator
• Now, 20% of the Japanese imported sake market
• Recommends drinking sake from a wine glass, at cellar temp, or warmed to order for hot sake
• Kome website is more focused on the style of sake (e.g., fruity/floral vs. round/rustic) vs. grade now
• 46 prefectures brew sake - lots of expression of place
• Gluten and sulfite-free

Wine importing trends - people drinking less, but better (Gen Z - less alcohol, and non-alc drinks, believes they will look at wine more as they age; value premium products that are authentic, smaller, good stewards of land)

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Detailed Show Notes: 

Vine Connections

• A national import and marketing company based in CA and has a retail license
• Focus on regions with winemaking history but not globally recognized
• Started as a broker and distributor (when Nick was 25)
• Worked with Billington Imports and met Laura Catena, went to Argentina, and fell in love with wines
• Established 1st premium portfolio of Argentine wines (1999-2000) - least expensive wine was $24 retail
• 2002 - imported sake
• 2013 - 1st premium Chilean wine portfolio
• Has wholesalers in all 50 states, including RNDC (#2 in the US), Breakthru (#3), and other smaller ones
• 30 people today, from 2 originally
• Split company in 2 - Kome Collective (Japanese), GeoVino (wines)

Types of wine importers

• All importers are also distributors in their state
• Sales Geography - can be state, regional, or national; Vine Connections is national for control over brands all the way through, exclusive for all 50 states, contracts w/ producers outline the responsibilities of importer and producer
• Portfolio Focus - world or specialized; Vine Connections is specialized in S America and sake

Role of importer

• Bring wines in, warehouse, sell to distributors, & work with sales teams to sell to various channels (on-premise, off-premise, chains)
• Work with press, do consumer events, lots of training and education

Sourcing wines

• Looks at people first, then property, and consistency in product and pricing
• New wines don’t cannibalize the current portfolio
• Complementary driven by a sense of place and identity, even if the same region, varietal, price point
• Looking at expanding to more regions to take advantage of the distribution network
• Originally specialized to have more of an identity as an importer
• Optimal book size - has ~120 SKUs in portfolio vs. ~900 at some importers and ~10,000 for RNDC as a distributor; optimal size varies by business model (e.g., focused on chains vs. independent stores/restaurants)
• More in not better - high cost to inventory and more challenging to prioritize

Pricing wines

• In general, SRP is fixed, but each state is different (based on freight & tax differences, distributor margins (larger tend to work on lower margins), and retailer margins (some take less margin)

Selling wines

• Used to self-distribute in CA, now uses wholesalers (couldn’t service all the accounts, wanted to focus on national sales)
• Distributor salespeople don’t have time to focus on everything
• Importer needs to generate interest in brands

Key elements for success

• Find good partners - share the same philosophy (quality, value, consistency), support each other
• Vine Connections doesn’t add new wineries often (only one new Chilean winery); only one winery left in 20+ years
• $1M revenue/employee benchmark for success

Vine Connections differentiation - good communications, both in transfer and transparency (e.g., sales by state), consider Vine Connections an extension of the winery

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Detailed Show Notes: 

Curtis’ background

• Worked at IRI / Circana (database of retail scan data)
• Worked in retail wine stores and restaurants
• Was head of beverages at Raley’s (grocery) before Albertsons

Albertsons Companies

• 1,900 stores that sell wine
• A lot of value wine, some specialty stores (e.g., Pavilions, Hagens) sell fine wine
• West Coast - more domestic (~40% import, 60% domestic), East Coast - more imports

Vine & Cellar (“V&C”) online wine store

• Wine only now, no beer & spirits yet
• CA only now will expand to others (e.g., WA, IL)
• Extension on top of the grocery store website
• Has a larger selection of wines (2,300 items vs. average 800-1,000 at typical stores, up to 1,500 at some stores) - e.g., Super 2nd Bordeaux, allocated CA Pinot Noir
• Wines are only available to ship via UPS (vs. in-store pickup or delivery)
• Can use the same checkout process for groceries and V&C

Benefits for consumers of V&C

• Curated wine selections that are representative of their regions
• Buy groceries and V&C wines and checkout together
• More flexibility - can do wine dinners, in-store tastings, wine clubs

Goals of V&C

• Let customers continue to explore and trade up on wines and not trade out of Albertsons
• Don’t cannibalize in-store, but more add-on, incremental purchases
• Capture a portion of the wine DTC market

Online vs. in-store buying

• More imported wines online
• Broader selections vs more volume of the same wines in-store
• Avg bottle price is $10 higher on V&C than highest in-store
• ~½ V&C customers buying iconic wines (e.g., Silver Oak), ~½ exploring (e.g., Burgundies in the $50-100 range)
• V&C customer is both existing Albertsons and some new customers
• You can put a lot more details/descriptors of wines online
• Online buys in 6 or 12 packs to economize on shipping

Marketing V&C

• QR codes inside stores
• Vinecellar.com
• Some ads on the website, V&C wines come up during a search for wines if they are not offered in-store
• Events / PR
• Napa Safeway has V&C featured wines in-store
• Some paid search, Wine-Searcher

Loyalty programs - now Albertsons customers get promo codes for V&C

Wine trends - less high-end wines, people focused on value / high QPR

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Topics we covered in 2023

• Sustainability (8-part series that had Drew Bledsoe to CEO of Silver Oak David Duncan and across the world from the US to Spain to Bordeaux)
• State of the Wine Collector (LA, Dallas)
• Leveraging non-gov’t organizations (VDP, Grand Pagos) to promote wine

Revenge travel

• Post-Covid move back to in-person / offices -> delivery of wine -> reduced visitors to wine country and people buying wine to stock and drink at home
• Americans Took Record-Setting Vacations In Summer Of ‘Revenge Travel’ - 32.8% of households went on vacation (a record since data kept in 2015)

Online retailer issues - Underground Cellar (April 2023), SommSelect (July 2022), Winc (Nov 2022, 1 year after going public) all went bankrupt, others struggling back to 2019 or even lower levels

• More missing bottles w/ Sherry Lehman (~Mar - Aug 2023), Chelsea wine storage

Inflation / economic slowdown globally and impact on wine market

• Bleak outlook for 2024 as fine wine buyers narrow their focus - Liv-Ex indexes down double digits year to date; “flight to quality” - Bordeaux benefiting, Burgundy, Champagne down
• Inflation is used as the “reason” many wineries increase wine prices
• BBC article on wine pricing increasing - glass, labor, fruit - all getting more expensive and wineries increasing price; and burgundy/napa/champagne got very expensive, consumers starting to pull back
• Many napa wines taking prices up to $300+ (Memento Mori - $225 -> $300)
• Chinese consumption is as low as 1996 levels, - the peak of 19.6M HL in 2017 to 8.8M HL in 2022 (#8 globally) vs. US in the top slot at 34M HL

Global health/wellness; Millenial/Gen Z slowing down alcohol consumption

• WHO says no alcohol is good for you (released a statement Jan 2023)
• Gen Z drink 20% less than Mill, who drink less than prior generations - college-age abstainers went from 20% -> 28% in the last 20 years (to 2020)
• Better non-alc and low-alc alternatives (kombucha, pot, mushrooms, better no/lo options for alcohol)

Is wine part of the good life? 

• Wine, particularly fine wine, is used differently than beer & spirits; it is also better from a health perspective
• The Wine Access interview re-emphasized - the experiences with wine
• The Italian lifestyle / holy trinity of the good life - cheese, wine, & bread

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Detailed Show Notes: 

Wine Access background

• Launched in the late ’90s, it hosted wine retail websites and described wines
• 2004 - offered wines on their platform
• Curate wines (team includes an MS), tell the story behind every wine, excellent customer service, and technology (powers wine clubs like Michelin Guide, Sunset, Decanter, and Williams Sonoma)
• Goal - to be a loved wine brand

Wine Access Unfiltered podcast

• Launched in 2020
• A wine podcast w/ conversations around wine w/ wine, but not about wine
• Released every other week, 45 min - 1 hour show length
• They have done podcast ad buys and have seen success
• Format - Season 1 - talk about wine stories, mostly with celebrities
• Season 2 - off more value add, more thematic (e.g., wine regions), added a wine club to drink the wines w/ the show (full 360 experience)
• Has IG (>10,000 followers) and YouTube (>300 subscribers) channels

Listener base

• They assumed it would be the same as Wine Access customers
• They found it to skew younger and less wine-savvy, but very curious
• Another way to connect with members

Traction

• >100,000 cumulative downloads
• Past episode performance increases with new listeners
• Holds people’s attention for an extended period of time
• Most podcasts fizzle out after five episodes

Getting celebrities on the show

• “Do you want to drink wine with us?” worked during the pandemic
• They did a lot of cold calling, worked with a few producers
• More prominent celebrities didn’t always have the best performance
• Bert Kreischer’s episode was very successful; he cried on the show and then mentioned it and FaceTimed Amanda while on 2 Bears, 1 Cave podcast

Wine Club

• Four wines for four episodes, sent every other month, curated by Amanda
• 10% off all Wine Access purchases
• Includes shipping, can add wines w/ free shipping to shipment
• Some wines exclusive to the wine club
• Q3 2023 - Unfiltered Wine Club had more new members than any other club that Wine Access runs

ROI

• The wine club helps cover the cost
• The goal is more brand awareness
• Retention through connecting w/ members in a different way
• Content creation (audio, video) that can be reused

Podcasting

• Spotify is bringing new energy to the space with a better listening experience (went from 15% -> 30% of Unfiltered listeners)
• YouTube has a podcast section
• Repurpose clips for social media is a best practice

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Detailed Show Notes: 

SOMM movie (2012) - Genesis of the movie

• Made when he was fresh out of film school (where he didn't focus on documentaries)
• Met Brian McClintic, who asked him to watch their tasting practice
• Jason found the practice similar to a sporting event
• Met Ian Cauble and found his determination to become a Master Sommelier

The success of the film

• The obsessive personalities made the film
• Builds to an actual event (the MS exam)
• The wine industry was ready for something like the movie
• Not a "wine film," a different way of looking at wine
• Introduced a new group of people who can tell you what to drink (vs magazines)
• Documentaries became popular with Netflix
• Not made by wine people, the outsider perspective made it enjoyable for outsiders

Media business model

• Movies usually have a distributor
• Theaters are a big marketing arena for wine
• iTunes - make a % of revenue
• Netflix - pays the distributor a fixed fee; if put on the 1st page, it can reach millions of people. It often pays based on what it costs to make. They can own rights outright or rent the film
• Amazon - get paid 6+ months after it's up, get a tiny cut of incremental revenue
• YouTube - don't make any money on
• Created SommTV to control more steps in the business model - more control of content pipeline, partnerships, and a place to premiere new films (e.g., SOMM 4)
• Before Covid - events were a big part of the business

Media platforms

• Hulu - Jason's favorite, takes the biggest swings in content
• Stars - has the best movies
• Netflix - very careful; content is very similar to each other; often licenses something then makes their version if it works (e.g., Uncorked is a similar series to Somm)

Cost of making films

• Big range - SOMM 2 ~$100k vs ~$850k for another wine film made by someone else
• Documentaries - can be millions, when there's real music, at least $500k
• Do not pay people to be in the film

SommTV business model

• Employees on salary, which is unusual in film
• 90% original content
• It started with originals and, now, trying to license other content
• Focused on wine, food, and alcohol; food is going to be a big part
• It started the streaming service because it's an underserved audience, and wanted to super-serve them
• Content pipeline - they would ideally love to have new content every day
• Hundreds of thousands of subscribers (as of Jan 2022) - believes the potential audience is in the millions
• "Somm" is defined by Jason as someone who curates - wine at the center, but food, travel, etc…surrounding it
• Pricing - $6/month, $50/year
• Lower cost doesn't necessarily mean more subscribers
• Technology - a mix of own-developed and 3rd party apps; the goal is to bring the technology in-house

SommTV subscribers

• Younger, usually 24-37 years old (~70%), middle class
• Screenings/events - more varied audience
• 52% male, 48% female - women growing fast
• Key markets - US largest by far, UK, Brazil, Nordic countries (not allowed in Iran or China)

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Detailed Show Notes: 

Tastry was founded around 6 years ago, but 1st 4 were more of an R&D project, officially launched Dec 2021

• The wine industry is trying to anticipate what consumers want
• New wines have an 85% failure rate in the 1st year
• People describing flavors in wine doesn’t correlate with if they like it

Tastry uses AI and Machine Learning with chemical analysis to break down a wine’s flavor

2 databases - wine’s flavor profile and consumer taste preferences that are matched together

Wine database

• Analyze 10,000’s of wines/year
• Chemical analysis is done in-house on standardized equipment but with proprietary software
• The Top 2,000 wines based on IRI annually are analyzed to build a baseline data set as wineries’ samples are proprietary

Consumer taste database

• Did double-blind tasting panels, asking consumers if they both liked or did not like wines; the negative preference is important for the flavor profile building
• Consumers also asked analog questions that became the Recommended by Tastry quiz
• Use algorithms to relate data and predict preferences for the rest of the population (248M taste profiles)
• Can now predict individual consumer taste profiles if they take the Tasty quiz with 93% accuracy in how they would rate the wine
• Palates are very unique; the largest cohort is only 13 people
• Demographics don’t show a lot of differences in taste preferences

Customers - work with >100 wineries, 22 of 25 largest wineries

Winemaker use cases

• Computational Blending - uses simulation to match profiles from different blends and adjustments; winemakers set parameters on what they are trying to achieve
• Winery had to switch from barrels to adjustments to 5x production and used blending to get a similar profile
• Navigating smoke taint (3k tons, $10M worth of fruit) - came back with a recipe that solved the issue
• Maintaining year-over-year consistency

Winery marketing use cases

• Recommended by Tastry plug-in for wine clubs
• Look more at finished wines and at competitive sets and overlap of consumer preferences

Retailer use cases

• Recommender helps get more niche brands discovered
• There is more traction for e-retailers now; pilots with big box retailers
• Dec 2023 - Tastrt will announce a scalable way to access a broad # of wines

Strong ROI - 44-215x, benefits mainly cost savings, increased revenue

Business model - Vertical SaaS with consumption-based model

• Subscription to dashboard
• Lab analysis of samples provides ~$3,000 worth of analysis for a $370 list price
• Compublend - per simulation charge
• Access to competitive data sets from the Top 2,000 wines
• Pricing is the same for winemakers, marketing, and retailers

Raised ~$10M in funding from individuals, early stage VC’s, and strategic investors (wine, AI, retail)

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Detailed Show Notes: 

Enrique’s background - studied agronomy and enology, joined Don Melchor in 1993, became winemaker in 1997, in 2011, Don Melchor Winery was created and became CEO

Don Melchor overview:

• One specific vineyard in Puente Alto on the north bank of the Maipo River at the foot of the Andes Mountains
• 1st vintage - 1987
• 127ha, 151 parcels
• Mainly Cabernet Sauvignon
• Uses ~60-70% of the vineyard for Don Melchor wine
• ~12-15k cases of 1 wine produced each year

“One unique history, one terroir, one wine” is the ethos behind Don Melchor

The remainder of the fruit goes to other wines in the Concho y Toro portfolio (e.g., Marquis de Casa Concha)

Becoming an iconic Chilean wine

• It was 1st to create an “icon” wine in Chile
• It was the most expensive Chilean wine on initial release
• 1988, 2nd vintage, was in the Top 100 of Wine Spectator - the only Chilean wine and a big deal at the time which established Don Melchor’s status
• A string of critical praise - WS Top 100 9x, 3x in the Top 10, 100 points from James Suckling, Best of the Best from Robb Report

Export 90% of the wine to 70 countries; main markets include the US, Brazil, China

Becoming iconic today

• It is easier for other Chilean wines as Chile’s reputation is more established
• The country’s image is critical and requires collaboration with other producers
• Consistency of quality is critical for both winemaking and the commercial side
• Add value to the wine world - e.g., come from a unique place, have a unique expression and personality

May create a 2nd wine in the future

Staying on top

• Requires a singular focus on quality and consistency
• Need to focus on communication and optimizing the best routes to market
• Wine critics are still important, and they make consumer communication faster
• Customized routes to market by country (e.g., US, Brazil) and have offices in different countries

Sold by the Concha y Toro sales force

• Have a specific team for premium wines
• Not on La Place de Bordeaux 

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Detailed Show Notes: 

Fabyola's background - studied to be a sommelier in Brazil, joined Pernod Ricard in 2013 as 1st Champagne Ambassador in Brazil, now oversees global education program and Champagne & Provence Brand Ambassadors (“BA”)

Pernod Ricard (“PR”) is #2 worldwide in wines & spirits, >200 premium brands (e.g., Absolut Vodka, GH Mumm, Perrier-Jouët)

Pernod Ricard has a range of Brand Ambassador programs

• Programs overseen by brand owner
• The oldest program is for Jameson Irish Whisky, founded in 1991 with 80 BAs in 15 markets worldwide
• BA programs don’t span multiple categories but could represent similar ones, e.g., 2 Champagne houses
• The scope varies by market - e.g., Hong Kong BA represents Champagnes and Provence, France - different BAs for each house, US - 1 Sr BA for Champagne

Champagne & Provence Brand Ambassador program

• 30 BAs, 15 international markets

Brand Ambassador roles

• Targets trade and passionate consumers
• Mission - “to win hearts and minds”
• Engage in brand education, trade activation, business development, interact with media/journalists, organize cellar master visits, and teach wine certification programs
• Collaborates with marketing and commercial teams
• Don’t sell wine - commercial teams (Private Client Directors, Prestige Sales Teams) responsible for sales across the portfolio
• Career paths - can be promoted to senior BA or join global market and strategy team (7 former BAs work there)

Rare wine offers - mostly sold via auctions (e.g., 1874 Perrier-Jouët sold at Christie’s in 2021 for a record £42,875) or private client directors

Key Brand Ambassador traits

• Need to be credible and respected by experts - focus on formal wine training, launched WSET in-house and developed Champagne Specialist Course with the Wine Scholar Guild
• Must embody house essence and be an effective spokesperson
• 4 key characteristics PR recruits for - passion for wine, strong communications skills, adaptability/resilience, and spontaneous charisma
• Must be able to personalize interactions and customize messaging to meet customers’ interests
• Prior relationships are a plus, depending on the level being recruited for

Building relationships

• PR founder often said, “Make a new friend every day” - key for BAs
• Commercial teams will make introductions to local customers
• Connect with as many people as possible, often surprised by who brings in new business opportunities

Benefits of relationships with BAs - e.g., invitations to curated events and experiences such as the Belle Époque Society by Perrier-Jouët

Social media is more important in some markets (e.g., Brazil) than others

PR also has Lifestyle Ambassadors (part of the Marketing team) who have social media as a KPI

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Detailed Show Notes: 

María’s background - was a translator, husband took over family winery in Rioja, 2002 - bought a 56ha vineyard and started Alonso del Yerro

Enrique’s background - worked at Diageo and Gonzales Byass, became CEO of Abadía Retuerta

Grandes Pagos de España (“GPE”) history

• 2000 - 5 wineries established Grand Pagos de Castilla
• 2003 - included other wineries from Spain and renamed to GPE
• 35 wineries, all single vineyards
• Pago is defined like “terroir”, a vineyard with different characteristics
• Common Goal: produce exceptional wines that reflect unique terroir
• Inspired by VDP and French concept of Grand Cru, but adapted to Spanish context

Goals & Objectives of GPE

• Promote and safeguard “diversity and personality” of wines
• Foster research and innovation
• Conduct educational and promotional activities

Criteria for joining

• Most wineries apply to be a member
• Criteria - single vineyard, 100% estate fruit, min 5 years of internationally recognized quality, must pass internal tasting committee that assesses the personality of the vineyard
• Most vineyards ~50-75ha
• Some wineries may produce wines that are not Grand Pagos

Member benefits and requirements

• Fees based on quota system by # of bottles produced (3 levels - <40k, 40-150k, >150k bottles), no winery is >500k bottles
• Networking w/ other wineries; e.g. - winemakers meet 2x / year to share learnings
• Promotion of wines domestically & internationally (e.g. - wine fairs, education)
• No logo on label

Priority markets

• Spain is the primary market
• 4 international focuses - USA (include for broader influence of press and blogs), Mexico, UK, Switzerland

GPE wines at least 4-5x more expensive than avg price of Spanish wine (~$40-300/bottle in the US)

Wine tourism program - many GPE wineries will showcase other GPE wineries in their tastings

KPIs for GPE include # of people at events, PR/comms results, results of last 10 years of new applicant tastings

Marketing GPE

• Building CRM of trade / sommeliers from tastings to keep in touch
• Partner w/ wine influencers, somms, other associations
• Highest impact initiatives: US - big tastings; Spain - tastings w/ somms

Launching a new Terroir Workshop Series

• Main push for the next 3-5 years
• Global education program for concept of pagos and 35 GPE wineries
• Starting in US, Mexico
• 3 brand ambassadors chosen and trained - help bring a 3rd party voice and local perspective on GPE
• Partnered w/ Gregory + Vine - helped clarify messaging and identified brand ambassadors
• Designed primarily for wine trade

Next priorities for GPE

• Climate change
• Global competition - need to maintain a high reputation
• Sustainability and social responsibility

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Detailed Show Notes: 

Verband Deutscher Prädikats- und Qualitätsweingüter (“VDP”)

• “P” standards for quality, those looking to produce top wines from top vineyards
• The goal is to bring the global recognition of German wines back to when the wines were considered some of the best in the world
• 201 members (2023), up from 160 members (1990)
• 10 regional associations

VDP history

• Started end of 19th century
• A movement to counter the industrial winemaking trend
• Created quality requirements (e.g. - estate bottling, wine was sold in auction by the barrel and bottled elsewhere; no additions except sulfur, sugar was added before)
• Post WWI/WWII - cheap, sweet wines became popular
• German Wine Law of 1971 - created quality classification based on must weights, varietal agnostic, leading to consumer confusion
• The late 70s/early 80s - German wine quality sank (yields too high), and the law created consumer label confusion, leading to VDP revamp, focus on vineyard sites

Joining the VDP

• 1990-2023 - 130 new members, 1-2 new members/year
• Must fulfill criteria, blind tasting, vineyard, and cellar inspection
• You can’t apply or buy a membership; a region must invite a winery

Benefits for VDP members

• Knowledge sharing 
• Leveraging the VDP brand (eagle logo) - an international sign of quality
• VDP events and marketing
• Exporting expertise - 27% of VDP wines exported

Leaving the VDP

• 1-2 members/year leave
• Most coached to leave
• Mostly leave post generational change - don’t want to follow VDP rules, quality not at the top level

Dry German wines

• Traditional style before 1900
• Germans drink as much dry as anywhere else in the world, and the reputation for sweet wines is an international perspective
• Historically - 2-3% potential abv difference between entry-level and best wines. Today, due to climate change, the sugar levels are the same; only the yields and quality of site create differences
• ~60-70% of VDP members don’t make sweet wines, Mosel/Nahe most make sweet, Rheinghau ~20-30% do sweet

Grosses Gewächs (“GG”)

• 2002 - implemented in all regions, started w/ Rheingau 1994/5, Pfalz 1996
• Created positive brand for dry German wines - increase in the average price of GG wines - 2002 - €16, 2023 - €40 (range from €25-150+)
• German market response was positive, creating pride in German wines
• UK pushback - writers thought dry German wines were too sour and lacked quality; last to adopt the new style, only in the last 5 years
• Scandinavia - a hot spot for German wine
• Elements for GG success - wineries can only make 1 GG wine from 1 Grosses Lage site; wines have gotten better
• Significant markets for GG - used to be Northern Europe, Asia (China, S Korea, Thailand, Singapore)
• Africa/India/S America - not strong for German wines
• More than Riesling - Pinot Noir, Pinot Blanc, Silvaner

The next priorities for VDP

• Renewing German Wine Law, potentially moving VDP classification into law
• Sustainability/climate change

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Detailed Show Notes: 

Lettuce Entertain You ("LEY")

• ~100 restaurants in Chicago/IL, CA, NV, FL, TX, VA, DC
• Partitions of different culinary groups

Beverage impact on sales - can be 0% - 50% of sales

• Fine dining and wine sales used to have a positive correlation
• More casual concepts w/high-end beverage programs (e.g., luxury whiskey w/ casual BBQ)
• LEY - Wine was single digit of sales, now high teens-20% over the last 20 years
• The volume of sales driven through by the glass ("BTG") programs (e.g., RPM Seafood sells 4-5x Pinot Grigio vs. Sancerre, which is 2x the price)
• Wine program drives return visits vs. initial visits - people come back for the person who recommended the bottle

Definition of a good wine program

• Used to be verticals of great traditional producers
• Now, more about how the wine program fits into the restaurant (e.g., Piedmont wines w/ Piedmont food)
• Need good stemware; not great stemware
• Wines at the right temperature and match the menu

Role of the Sommelier

• Operations - wine binning/storage, ordering, tasting, building wine menus
• When not involved in wine, they should be "hospitalians," helping with everything else
• Best somms build relationships with wineries (get access to unique wines) and guests (getting them into the right bottle, not the most expensive -> brings customers back)
• Average fine dining ratios - 24 tables, 1 somm per 12 tables

Somm turnover

• Pre-Covid - average tenure 18 months
• Re-training takes 6-12 months
• LEY - tries to retain employees, treats them well w/ 401k, benefits, opportunities to grow career w/in LEY

Restaurant pricing

• Rent is the most significant expense -> increases COGS for everything, including wine
• Food/cocktail ingredients are blended together, but wine is not, making pricing a more significant issue
• Goal - keep COGS down while holding price (sometimes achieved through relationship w/ wineries)
• Try to get less available wines - have less price transparency
• Markups lower on higher-end wines - standard markups would make the wines unsellable

Oakville Grill & Cellar - opened April 2023

• CA wine area themed restaurant
• Napa inspiration - "Never pretentious, never formal…very comfortable, pleasurable, elevated service & quality of food, rarely decor"
• The entire wine program is from CA

Cellar Door - tasting studio w/in Oakville Grill

• 6 person suite
• Partners w/ different winery every month
• Re-creates the winery tasting list down to vintage and wine pricing
• Gets training from the winery
• Guests can sign up for winery, take home wine
• ~500 guests/month capacity (4 seatings/night, 5 days/week)
• Winery requirements: right pricing (not low or high), interesting tasting list, pedigree, make sense w/Chicago's seasonality, open to all of CA
• Also, BTG in Oakville Grill and usually on the wine list before and after

Trends for Restaurants

• Authenticity - e.g., Aglianico w/ Neapolitan pizza
• Wine getting more expensive -> The cost of building a cellar is higher, which leads to more focused wine lists

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Detailed Show Notes: 

“The Vice” named after Malek’s main vice of wine

• Focused on value and discovery of Napa Valley

Production

• 27k cases total
• ~65% house tier, ~30% single vineyard tier (~20 wines/year), ~5% ultra-premium
• #1 SKU is House Napa Cab - ~11k cases
• They make 18 varietals, from 14-16 sub-regions w/in Napa, a little bit of Russian River Pinot and Chardonnay
• Sources both fruit and bulk wine

Cost mitigation measures

• Secure better pricing through pre-paying for grapes
• Being proactive - purchasing fruit from southern Napa vineyards in 2020 that weren’t impacted by fires, talked to 12-15 glass distributors to mitigate the 200-300% price increases

Focused on the wholesale channel (~80% of sales)

• Spends ~75% of the time outside Napa working markets
• In 2020, traveled every month except April working w/ retailers -> 100% success rate, added 400 retailers in NYC
• FL/TX buy more single vineyard wines; NY/NE - very House tier driven, CA/CO - good mix
• FL - a red wine state (driven by Boomers), NY - big in orange wine, nearly outsold House Cab in spring 2023

Customer demographics

• Equal split - Baby Boomers, Gen X, Millennials / GenZ
• Orange wine (~3,500 cases) - 75% Millennials / GenZ, ~25% Gen X
• Single vineyard Cabs - ~85% Baby Boomers & Gen X, Millennials focused on lower price points
• Appellations important primarily to Boomers who grew up with Napa becoming famous, Gen X sees Napa as a symbol of status, Millennials/GenZ appellation less critical, more price-driven
• Believes Napa will remain important, driven by tourism - 4M visitors/year

Orange vs. Rosé

• Swapped production of rosé wine for orange wine
• Believes rosé hit the ceiling in 2019 - rose a more social drink, also very vintage driven with closeouts on prior vintages damaging brands

Spirits vs. wine marketing

• Spirits has lots of product innovation, e.g., many flavors of vodka -> led to The Vice producing many different varietals and Napa sub-regions
• Spirits spend millions on advertising -> likely would not work for wine; better for the brand to be built account by account w/ gatekeepers

Consumer awareness of The Vice

• 2020/2021 - spent heavily on Google, FB/IG ads, had to shift when Sept 2021 privacy laws changed
• Awareness from a lot of referrals and through retail placements
• Some social media, in-person visits, and press/media - ratings are still important
• Pair wine w/ other vices - e.g., cannabis, candy, ice cream
• Thinks about pairing w/ the senses - e.g., vision (most important), hearing, smell (linked to memory and emotion) - instrumental hip hop, sex toys for a bachelorette party
• Works under targeted regions - e.g., Staten Island and the Bronx retailers
• Likes to go against the grain - be more value-oriented vs. higher end