On a podcast with Emilie Steckenborn of LVMH China, she insisted that I meet with Robert Foye to discuss a podcast appearance. She insisted.
After 2 minutes on a call with Robert, I moved from chatting to scheduling. Despite conversations on the web about how the trade should be more innovative and rethink, Robert feels you need experience to move forward. How can you innovate without knowing the pitfalls of what came before?
With Robert Foye, it is about leadership and adaptability. Hear it here.
Robert Foye doesn’t just bridge the world between Coca-Cola and Cabernet—he’s crossed it, mapped it, and poured a glass for the rest of us. If you think multinational beverage leadership and the romance of wine are oil and water, Foye’s the proof that sometimes, opposites blend perfectly. In this illuminating episode of Wine Talks, listeners embark on a journey through the tumultuous cycles and fascinating nuances of the wine business, as told by a leader who’s helmed both Accolade Wines and Treasury Wine Estates. You’ll learn why wine endures as a cultural ambassador, even as trends and consumption habits shift; how the COVID-19 pandemic didn’t just pause the industry but rewrote its rules (and reawakened dormant talents at both the kitchen table and the boardroom). Foye deftly uncorks the challenges of marketing wine in today’s saturated landscape—offering a rare look at what works, and what falls flat, on the shelf and online. He’ll walk you through what sets wine apart from other consumer packaged goods, exploring the rich stories and personal connections that make sharing a bottle an experience unlike any other. Whether he’s recounting tales of adapting wine language for the next generation, weighing in on the role of private equity investments, or describing the unexpected kinship between a seasoned wine executive and the humble “second cheapest bottle,” Foye brings an insider’s wit and worldliness to every anecdote. You’ll come away not just with a deeper understanding of today’s wine market, but with a renewed sense of why, through its ups and downs, wine persists—linking land, language, and laughter with each pour. This conversation will leave you thirsty, not just for your next glass, but for the stories behind every label.
✅ Ever wonder why wine is so much more than just a drink?
✅ Dive into the art, business, and soul behind every bottle with host Paul Kalemkiarian and guest Robert Foye.
✅ From global industry shakeups to the magic of sharing a special glass, this episode of Wine Talks uncorks what makes wine irresistible—and why its story is far from over.
✅ Whether you’re a wine lover or business buff, you’ll leave with a new appreciation (and craving for the next pour). Listen now and sip on some real insights!
-
Accolade Wines
https://www.accoladewines.com/ -
Treasury Wine Estates
https://www.tweglobal.com/ -
Coca-Cola Company
https://www.coca-colacompany.com/ -
Constellation Brands
https://www.cbrands.com/ -
Diageo
https://www.diageo.com/ -
Duckhorn (owned by The Duckhorn Portfolio)
https://www.duckhorn.com/
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Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
(00:00):
Your ability to kind of master some of these more
sophisticated skills, but keep the magic of
what makes your brand special and how you present it.
That's the magic of the wine business and that's what interests me so much more
about it than other businesses where it's just
about the business skill and everything else and less about the storytelling.
(00:22):
Sit back and grab a glass. It's Wine
Talks with Paul. Kate. Hey,
welcome to White Talks with Paul K. And we are in studio today in beautiful
Southern California with a little dreary today, but to have a conversation with Robert Foy.
Introductions in just a moment. Hey, have a listen to a show coming out.
It's on under the name Song of America. It's about the
(00:44):
Agonian family who have won INDY, the Indianapolis
500 five times, four times. And it's an incredible story
of immigration to America. And that's what the Song of America is about. But not
why we're here. Here to talk to Robert Foy. Had a great conversation with him
already. Welcome to the show. Great,
Paul, thanks. Kind of a weird thing. Welcome to the show.
(01:07):
And I'm not in studio with you, but I feel like I'm in your studio.
Are you. You go by Bob. Robert.
Yeah. More. Yeah, Robert. Okay. So Robert was the
CEO of Accolade Wines, one of the great
distributors of wine from Australia and to America, other parts of the
world, as well as CEO of Treasury Wine Estates, which you all know
(01:28):
about because they've made some huge news recently with some
acquisitions. But. And I want to talk about some of this
corporate America, part of or corporate part of the wine trade. But we're going to
talk about some of the, some of the states of the industry today and how
you got here. But let's talk about Accolade for a second.
I did some business with Accolade and this was an Australian
(01:50):
based distributor or did they
manufacture too? Of course,
we're the brand owner. Yes, absolutely. So we have about 70
brands and we do everything from
viticulture to winemaking to
filling the bottles to marketing and distributing all over the world. So
(02:11):
complete a full company. When did you
retire? Well, technically
I'm not retired yet. Oh, well, then we'll put you on payroll.
Much interested in work, pa but, but
technically from Accolade Wines as
CEO. I left end of February this year. You know,
(02:34):
I, I supposedly retired and I had to get out and I want to say
I had to get out to because as you know, the DTC wine market
is suffering greatly here in the States as well as Other parts of the world
in the first quarter of 2023 was looking so great.
But after 35 years, you know, did I want to
regen the company? Did I want to? And I. We were prolific
(02:56):
marketeers, prolific digital marketers. Just
decided not to. But I can't. I don't know how I had time to work.
I'm so busy today, it's like. I
don't know. I don't know where the time went. I know exactly how you
feel. And. And definitely I could flex my total
schedule as needed, depending on how much work I get. But I. But
(03:18):
I'm totally open to a new CEO role. We'll see how that goes. Or
board or. I've got a book I want to write on some of
my experiences in wine and private equity.
And also probably I'll teach an MBA class
on private equity and consumer products and things like that. But
(03:38):
I'm still pretty young, 58, so I've got
at least one more gig inside me if it comes to full time. But I
know exactly what you're talking about. There's certainly enough things to
fill up the time, whether you're working full time or not. You're a kid.
Let's talk about that for a second. And I brought it up, you know, during
COVID Well, first of all, I saw some writing on
(04:00):
the wall pre Covid. So 2000, you know, I started seeing some.
Some saturation, some congestion,
quality issues in the Marketplace somewhere around 2015.
But 2019 wasn't looking all that great, though it
would have been profitable for us. But 2020, of course,
incredible for most wine businesses, particularly people that had a robust E
(04:23):
commerce platform. You know, we were like 30%.
Robert. I could tell you that I could do no wrong during
COVID Whatever I told them to buy, they would buy. They could have been
Burgundy to Napa Cabs to, you know, white
Yellowtail. But it didn't take long, maybe
days, really. Since when Covid ended that the writing
(04:45):
on the wall for the wine trade was starting to be written. What do you
think? What do you think attributed to this, this current
situation that we're in, which is the industry is suffering, Everybody's trying to clamor. If
you listen to LinkedIn gossip, there's a billion reasons why,
but there's a billion solutions that nobody knows how to implement. Where do you
think that came from? Well, it's a really interesting
(05:06):
question. I think the first thing that you got to kind of go back to
as humans, we're very short term, so we kind of look at short term
trends, you know, and is this time different, you know,
than past times? But in reality, if you, if you look at
the long term, I. E. 30 to 50 years, I mean, the wine
(05:26):
trade goes through these cycles. That's the first thing.
And you know, we've had the discussion before, Paul, Wine is here
to stay. It's probably the most
culturally integrated beverage into
humans other than water. Yeah.
And for thousands of years. And it'll be here for the next couple thousands
(05:48):
of years. And it's a fascinating business. But I think these cycles, as,
you know, you know, growth comes in, people get really
excited. Maybe they over invest, you know, the industry over
invests in, in vines and capital and then, you know, something
changes and then it goes the other way and people start taking vines
out and kind of hunkering down. But
(06:10):
with COVID definitely there was that period. I
honestly, I think it was only about 12 to 14 months
where people stocked up at home, especially on red
wine, and kind of got their inventories ready. And
this is the brave new world of, you know, not working in the office.
And every day I might have a glass of wine at five or six o'
(06:32):
clock and that's fine because I've worked all day. And
then Covid ended and I think honestly, it's probably
taken, you know, 12 to 24 months to
get through that. I think we're starting to get through
it now. We do have, as you know, some other
trends of innovation and spirits
(06:54):
and beer and seltzers and all these kinds of
things. We got shifting channels with restaurants
and supermarkets and everything else. And I think all
that has kind of muddied the water a bit. So
definitely we're still in the slowdown. You know, these things
tend to take longer to get through. It might be another
(07:16):
12 or 24 or 36 months. But I think
wine will come back, you know, will it come roaring back
to premium wine growing 8 to 10% a year?
Maybe not, but I don't think it'll be negative growth or
even necessarily flat growth over the next 10 years.
You know, I think you said a mouthful there when it comes
(07:39):
to, you know, the reason why, because wine is historically, and I always
say when I talk to people, I said it yesterday in a podcast as well,
which is there's probably no product in the, on, on the
planet that's as historical or culturally relevant than wine.
Like, if you were to pick the five elements of a culture, you would take
a language, if the has one land, if they still have it, the
(08:00):
cuisine and that's not always the case.
And then wine is probably one of the top five
representatives of a culture again, if they have, if they have a
wine trade. So I think you're right. I don't think it's going anywhere.
But it seems deep rooted, like when the, when, when Covet hit.
Let's talk about the Silver Oaks and the Cuses of the world. They would never
(08:22):
speak to a guy like me. They would have in the early days when I
first started working in this business. But as they got more popular, they
didn't need direct to consumer clubs and they didn't need this, the press.
But then they came back and I thought this was fascinating. I told him, I
said, look, you want me to help sell some of your wines during this period
because you were a house poor or you, or at least a buy the glass
(08:42):
program at some restaurant and now there's none, you know, you're not getting any
sales, then don't forget me when you're gone. Okay, so here's the
phenomenon. I sold a ton of Caymus 1 liters, tons of them.
Stopped selling them the day Covid was over. I still have like nine cases here,
the warehouse and, and, and I
was, I was getting, you know, much more than the current retail price was
(09:05):
because of COVID And. But I don't think the restaurants
have recovered completely from what the traffic was
prior to, prior to Covid. I
think that's absolutely right. And again, I think
the restaurant business is in recovery.
It's pretty slow, but it's coming back. I think it will
(09:29):
come back. I think those habits that we kind of built over
those 12 to 18 months of COVID or 24 months, depending on where
you were in the world were real. And some of those are still
kind of there. I, you know, I'm going to be at home more. I'm
going to, you know, cook more, maybe watch Netflix a little
more than I normally would. But I think
(09:52):
again, these trends over time are going to
go back more toward normal, but sometimes it
takes longer than we think. And I was just reading the other day also about
the housing market. Not the housing market, sorry, the office market
in New York and some of these other cities is just now
starting to get more exciting. And again,
(10:14):
those kind of trends of people back in the office and having the
business dinners and do, you know, and being more
in the city and outside the home, I think that's going to continue
and it will get back to normal, but it's going to take a couple more
years for sure. I have a building here in Monrovia,
had 7,500 square feet of office space. I built them
(10:35):
years ago for a tenant and they moved out. And I
said, you know, I'm going to turn these into executive suites because people are coming
out of this work at home mentality, which
I don't know if you ever tried. I, I can't do it for a
variety of reasons, not the least of which is I'm constantly being called away from
my desk to get something off the top shelf.
(10:58):
But it start, it's filled, it filled up very quickly. A very
reasonable 500 to $1,000 a month for a, you know,
shared conference room. Two of them, you know, obviously bathrooms, the kitchen, all that
stuff, but nicely done offices. And I, and I
didn't have any prognostication to do this except that the space was
empty. But I think people are coming out now saying
(11:19):
this old, this new methodologies really aren't working for
us. And it's time to do, you know, what we need to do.
Because you've been, how long you been doing this? You talking
about working in general or. 35 years,
10 years in wine, 25 in beverages.
So in non, non alcoholic beverages. Prior
(11:43):
Coca Cola company All over the world. Yeah,
we talked about that briefly and I thought that was fascinating. Was there
a, was there a bridge between, you know, consumer goods
like Coca Cola or anything else to, to wine or you just had a fascination
with wine and liquor to. Yeah, yeah. The bridge was called
going to sleep one night and having been a Coke executive for 25 years,
(12:05):
waking up the next morning as a new wine executive and trying to
learn everything about wine. But that's like the Taylor Sellers, is it?
Exactly. There was a natural bridge, I would say
two things. One is when I was at Coke and I was at Coca Cola
for, you know, roughly 24 years all over the world, you know, I
learned how to build a beverage business. I learned everything
(12:28):
from, you know, making a beverage to distributing it,
marketing, selling it, you know, building a team, getting,
you know, showing up in a new country and a new job. And how do
you build the business? So that's the first thing. And the second
thing is just all that fmcg, fast
moving consumer goods, consumer CPG knowledge.
(12:51):
And then the opportunity came to move over to Treasury Wine
Estates and move into wine. And
I had looked at all kinds of industries. I had looked at beer, other
beverages, hotels, et cetera, et cetera. And what
I saw at treasury at that time was a
dynamic business. It is a beverage.
(13:13):
The Beverage is quite different. And we could talk about the
magic in the history of winemaking and
storytelling, of all the winemaking. And I embrace that. And I thought that was a
really unique part of it. But the other part of it is that the
business still has customers and
consumers who, if they can't find your product and can't
(13:35):
buy your product, then you don't sell it. And when they do find your
product and it's in this long, huge
wine aisle, you know, amongst a thousand other
products, how do they actually notice it? Because of the
packaging and the. And the way you've presented it in
store? And then how does it taste? And does it. Is it
(13:58):
good and does it fit their needs? Can you tell that story?
Is the price right and do they come back and buy it? And that whole
journey is. Is a little bit the same
and a little bit different for wine and Coca Cola and
beverages, but where I looked for where the similarities
were that could actually use in, you know, use in the wine industry
(14:20):
and the wine business. And I also appreciated the
differences. You know, it's a lot different to.
To plant a vineyard, grow a wine, put your heart
and soul into it, put it in a barrel for two years,
and then go out and explain to someone what it is and why they
should pay so much for it. That's a lot different than, you know,
(14:43):
mixing some ingredients and putting it down a Coca Cola beverage
line, although some of the marketing and sales is similar. So
I think just the appreciation for the industry, the history,
and also the curiosity of wanting to learn. And I
always tell the story. When I started with. With. With in wine 10 years
ago, I was kind of an 80% beer, you know,
(15:05):
20% wine guy. And now I'm a, you know,
80%, 90% wine guy. 10, 20% beer
guy. And that's what the wine industry does because it's such a fascinating and
amazing business. That was very articulate because that's really important part
of what we do and how we land here as well. Were you. Were you
at Coke, let's say, 88, 89? I guess so, Yes,
(15:27):
I was. Do you know where you were at that time?
Sorry, I was not. I started in
1992. I'm sorry. Yeah, so it might have been around
that time. A quick story then. I want to ask you a question about some
of this. But they were into wine trade for. Didn't they own Sterling Vineyards and
they owned Taylor Sellers and a few other. That's absolutely right. Yeah. And
(15:48):
the wor. I think the worst place for A wine business is probably
a corporate conglomerate. Yeah.
The reason I brought it up is my. My wife's uncle has passed away since,
was the inventor of the spoon straw and the flexi straw mit,
you know, type guy. But he had sold his
company to Coca Cola. It was called Wink. Then they merged them
(16:12):
with a company called Winkler Products. And they were making plastic plates and stuff and
Coca Cola. But one of his tasks was to create the synthetic
cork for the Taylor Sellers. Three, I think they're three
liters or one and a half liter. You know, the Gallo rivalry back
then for the Rhine wine and the Hardy Burgundy and stuff like that. And we,
I made a deal with Coca Cola and I gotta go find the contract and
(16:34):
that was to take over. And we found the molds for these, for the
synthetic corks for the bar caps in here in El Monte, Southern
California. And we went and looked at them and they were still had virgin plastic
in the hoppers ready to make corks. And I made a deal with
Coca Cola to get. They were going to skim off the top, give me the
product, give me everything that they had. And I was going to set it up
(16:55):
and then start making synthetic corks. This is before
they were popular. And we won't get into the details of the engineering
problems that the other ones had, but Coke had figured it out
and my uncle had figured it out, and so they had a superior cork product
long before synthetic corks were even used. And
I suppose that's part of the, part of your comment,
(17:18):
sometimes corporate America, the conglomerate gets in. This gets in
the way of its own feet, you know, just stumbles on its own feet. But
let me ask this question. Coca Cola, all
those beverages that they made, is for everybody. Every person in the world is
a potential customer of a can of Coke or a bottle
of Coke. But wine, you know, if you, if you ask the, the
(17:40):
Institute here in America, you know, 25% of the people would
raise their hand if you ask them, do you drink wine? It's a considerably
different marketplace to, to address.
It is. But the first question I would ask too
is, you know, 25% of the
people would raise their hand. But what about during their whole life? And
(18:03):
people kind of, you know, move through different beverages during their whole
life. And one of the things you and I talked about was the young consumer,
for instance, and the fact that, you know, they're more
open to having cocktails and spirits and,
you know, low alcohol beer, et cetera, et cetera. And
I think that's great. And that's part of innovation in beverages and alcohol.
(18:26):
But as those younger consumers age and get more
money and also get more into food
and cuisine, as you mentioned, and
you know, they're going to get more into wine and wine will slowly creep
into more of their offerings. So I think,
I think, you know, there's always the snapshot of who the consumer is today,
(18:50):
but there's always that journey. And, and that's what
also makes wine very interesting, is that, you know, with
Coca Cola you kind of learn how to drink it earlier in your life
and then you kind of practice not drink or drinking it
less as you get older and, and substituting things for it.
And wine's the exact opposite. You kind of, you kind of take your first drink,
(19:12):
you know, and then you either fall in love with it or, oh, you know,
I, I like other things right now. But as you age and get older and
get a bit more sophisticated with your palate and cuisine and, and
experiences also I think you're much more open to wine. And that's the,
that's the journey you got to figure out as a, you know, selling your
products and marketing your products is how do you get some of those consumers as
(19:34):
well. That's really interesting. I had a conversation with an
MW who's been studying the palate and the, and
gastronomy and its relationship, and he was saying that there's some
studies now that show that, that at least in
the wine sector, that if you start out drinking the entry level stuff, the
slightly sweet stuff, the Josh's and the apothic reds, that eventually you get
(19:57):
your pallet gets bored of that and you learn that the
complexity and you know, what makes a fine wines a
fine basically. And I, and I reflect on what you're saying.
Do you agree with me that most generations eventually,
maybe at different times in their lifespan, come to that glass
of wine that they go, this is kind of interesting in,
(20:20):
in bulk, obviously not 100 of a generation, but there's a
movement like the baby boomers a little earlier than I think that the millennials were
and certainly with the Gen Z's are when they realize that this,
this is a very special beverage. I would 100%
agree with you. And I think, you know, again, as you,
you have to look at how people kind of operate
(20:44):
as they age and how they get more interested in
experiences, cuisine, all that kind of stuff. And
I think wine just fits totally into that. And I think
definitely the amount of wine consumed goes up
as you age, especially, you know, when you start getting, I would
Say, into your late 40s, early 50s and
(21:05):
beyond. It does. You know, tonight, I think I. I'm sorry
I had to postpone this call from yesterday. Had lunch
with Pio Cesareo Cesare, and had an incredible
Barolos, but only
because tonight I'm having a dinner with some friends, and we had visited Cesare
Pio Cesare together in Piemonte, just not just a few months ago. And
(21:27):
I wanted to express that, but I was thinking about what I was going to
tell them. This is 12 people in total. And I think the
concept was that my little speech was going to be about,
you know, wine creates this conduit
to the human soul that. That we want to share.
Like, you don't want to share a glass of Sprite and talk about Sprite
(21:50):
or even Jack Daniels or, you know, or a, you know,
Heineken. But you do want to share the cultural
differences, the expression, the. The
thought process you have when you taste a glass of wine.
And I got a chance to taste some pretty special Barolos yesterday and bring them
tonight to the party so we can have that discussion again. Is anything
(22:12):
that you think of evoke such memory
about culture, about, you know, where you're at when you
were at and what you felt when it happened? Yeah, absolutely not.
And I think it's just.
It's hard to explain to people, but they start to get it when they experience
it themselves. You know, I can ask
(22:35):
anybody at any time, hey, would you like to have a dinner? I've got this
interesting wine and, you know, unless they're. Unless they don't
drink alcohol or they're just, you know, not
interested in wine. 100%, you know, the
response rate's like 97. Absolutely. We can reschedule
it. That's pretty good. And it is. And if you notice. If you notice
(22:57):
a wine dinner, too, it's quite interesting. You know, the first
kind of 30 minutes are, you know, can be fun and
interesting and stuff, but it's not nearly as fun as
the last 30 minutes after everybody had two or three glasses.
And. And they always say that, you know, wine, obviously, in moderation,
but wine, you know, in those discussions
(23:21):
become richer and more interesting. And I think it has
to do with, you know, it actually does help, you
know, the thinking process or at least
unleashing a bit more creativity and talkativity
in the conversation. And. And, you know, rarely do I have a
dinner now if both parties or all the
(23:43):
people there, a couple glasses of wine that I find not very
interesting. Well, there's always something that comes out and I think
that's part of it. And you had mentioned those, those parts of culture, you
know, land, cuisine, wine, you know,
family, a few other things. But if you think about it, wine actually
then intersects with land and cuisine and
(24:06):
probably some of the other things as well. So it really does
become part of your life. And, and also if you look at
people who move into the wine business and really
start to understand it, and this might be true for spirits and, and beer as
well, but I think it's especially true for wine. They never want to
leave the industry because it's so interesting and, and the
(24:28):
thoughts of having those dinners and not, not being able
to share those experiences over wine,
you know, become something they're not, not as interested in. It sounds like,
you know, it sounds like you, you different career path than
mine was. I did work for corporate America in a different product, a very
large corporation. But when I started in, in
(24:50):
wine, you were Talking about being 70 beer and 30 wine when you started in
the trade. And I, my father came to me and said,
I'm going to sell wine of the Month club. Do you, you want to take
a look at it now? At that time I was in software and I said,
sure. So I start packing and charging credit cards and, and
for me it was business. We were direct to consumer mail order company
(25:11):
back then. There was no Internet. We, we mailed stuff, you know, we had,
I was doing a million pieces of mail a year,
but it took about 10 years, maybe more for me
to realize that this community is so special and
the product is so special. And now I wave the flag of the
romantic side of our wine, even though it's still business.
(25:33):
And speaking of that, so we're into this, you know, Constellation. I don't know if
they did sell their wine portfolio, but they were talking about
selling their wine portfolio and you were talking about corporate, you
know, corporate conglomerates are probably not a place for a winer
to be. But why do you think it became an important
piece of places like Constellation, Diageo and those things? What,
(25:56):
what was the allure for them? Because the margins aren't that great.
Yeah, I don't know so much about Diageo,
but I do know about Constellation and, and I, you know this story
as well, that basically they started with wine. It
was a country that was started, you know, in New
York selling New York wine and then, and
(26:19):
then kind of expanded from there and that, you know, I won't go through the
whole story, which I'm sure you and your listeners are kind of familiar with, but
because of how well they did on expanding that wine
portfolio and doing distribution the right way.
And I've never worked at Constellation, but
they got the ability to distribute some beer brands, which we all
(26:42):
know Corona was the first one
in Modelo and Pacifico and some other ones. And then that business
became much bigger and more profitable than the wine
business. They still expanded the wine business a lot and they tried to
premiumize. But you're right, they've. They've basically sold
off twice. They, they sold off their really
(27:06):
cheapest brands about eight, nine years
ago, sorry, about five or six years ago.
And then they just sold another tranche of brands
literally announced last month. And now they're left
with just some very, I think, premium brands.
But I think for their business. Now we, we were talking about the
(27:29):
conglomerate just the way that it's developed. And it's probably been
hard for them to sell those wine brands because, you know, that's how they started.
But in reality, the margins aren't as good as their beer business. They
don't have as much scale, they don't have as much market share.
And it just becomes a business decision, I think, and you just
gotta go with it. But those wine brands, I think going to
(27:52):
other players, if they, if they give
them the attention and focus that maybe
a conglomerate can't give, it could, could do quite well. So we'll see.
There's always the positives and negatives of those things. Well, I
think that's accurate. I think that, you know, with
the consolidation of distributors worldwide, at least in America, there's a huge
(28:14):
consolidation. I haven't decided whether
that's good or bad for the consumer. And I think in general it's good for
the consumer, the regular consumer. And for the fine wine
collector and those guys, I don't think it's as good. But, but for the general
consumer, who's who. And I read something this morning about how
a brand, if you're going to brand something, you need
(28:38):
forgot how many touch points on four different platforms. Let's face it,
you know, space ads, you know, running ads in
newspapers, magazines and TV ads for liquor and wine. Just, you know, they're,
they're passe and they don't work. There's no more Bewitched, you know, Larry
Tates of the world. Right, right. And so you have to be
on social and damned if you. And damned if you don't, because if you, you're
(29:01):
not going to see the ROI there. But if you don't do it, you're not
going to be anybody. So it's sort of a tough situation. But just to brand
something, you have to be, you know, you have. There's so many touch points
with a consumer on so many different platforms before they believe your brand.
And I think the horsepower behind the conglomerate gets you that.
Right. That's why these brands grow so quickly in a, in a
(29:21):
store. But at the same time, these boutique wineries in
Napa and Bordeaux and wherever, you know, they're, they're
slugging it out right now. They're having a. Yeah, they're having a pretty tough time.
Yeah. But I think, I think the advantage of the smaller players
is potentially just more that, you
know, premium and more that kind of
(29:45):
blocking and tackling on, on, on
building a premium brand versus, you know,
kind of the more, like you said, the more common ways of doing it.
So I think that that can be quite interesting. Do you think, do
you think the world of. And I asked this question of an Armenian winemaker the
other day because, you know, I mean, it's like this very
(30:07):
young industry, even though it's been around for 6,000 years, as far as
contemporary products and contemporary manufacturing.
But do you think the, do you think the days of I'm
a good surgeon and I'm retiring and I have a billion dollars or
I'm, you know, government contract, I used to build freeways and
love the wine. I really love my wine. I want to go to Napa and
(30:29):
I want to start a chateau and buy the best winemaker and, and,
and then, you know, have my own brand. Do you think those days are over
as far as, like, even an expectation of a
profit? Definitely not.
Well, I think we're not what I expected.
Absolutely. I think we're in a cycle again. You know, it's
(30:50):
a bit of a tough time, so everybody kind of retrenches
again. You go back to that experience if you're a billionaire and
you want to start, you know, kind of the next phase of your life or
kind of expand a bit and want to share experiences. You know,
getting a winery and trying to work on it is one of the most
interesting things that you can do. It's funny you mentioned Armenian
(31:12):
winemaker, because I just had a bottle, I forgot the brand name last,
last week of a, of a red, Armenian red. It was quite good,
actually, and for the price, it was amazing. And I, I,
I've never tried an Armenian wine before. I would like
to share one with you. I have a, I have a few of my favorites.
Yeah, we can share that and some of your other wines that you
(31:34):
mentioned earlier in the podcast.
Well, I was just an Armenian. I shot. I had three days of shooting with
some winemakers together. I'll send you the reel. It's. We are
raising money for the local. A TV station, but the content
came out really good. And the people I spoke with are really interesting.
And I think of the. The five best wine brands in
(31:57):
America, in Armenia. But that's a tough racket. I mean, we're talking about unknown
region. In fact, one of the. One of the gentlemen says
the. The tough thing is we're unknown grapes from an unknown place.
Totally. It is. And the cool thing is it's an unknown
grape from an unknown region. Exactly. If you get people to try
it. Yeah. You know, back to question about the. The
(32:20):
billionaires buying. There's another thing that's going on which I know you're familiar
with, is private equity has bought quite a bit of wine. True.
Recently, as you know. Interesting point. Sycamore
bought Shadow St. Michelle for, you know,
a fairly large amount of money. That was about three, four,
three years ago. Yeah. Butterfly just bought
(32:43):
Duckhorn for 1.9 billion. Yeah.
Silver Oak has a major investment from private equity.
So actually, those kinds of
investments tends to tell me we might be at the
cycle low because, of
course, those private equity investors want to return on their money,
(33:06):
and they're not going to be buying into an industry that doesn't
have much prospects. So I think. I think we might sit here,
I'll make a date with you to do another podcast in three years,
and we might be talking about totally different things and trends in the
wine business being much more positive. But I think that that private
equity investment's interesting as well. That's a huge point
(33:28):
about people putting money into it now when they see what's going. I mean,
there's no mystery about it. I was talking to a restaurateur yesterday. He says I'm
down my wine bottle sales are down 40% and he's actually
revamping the whole thing. I want to talk about that for a second to see
what you think of this. But one of my litmus tests, as I was
here, you know, you know, sending 33 million emails out,
(33:49):
you know, in 2022. One of the litmus tests I
had here about what was going on in the industry wasn't only just my consumers
and people I was talking to and how they responded to what we were doing.
One of them was how many calls I got for.
I think I got 750 an hour to talk to.
Not private equity, because I never knew where they're coming from, but these services
(34:10):
that. That will go do research for somebody interested in getting into
any industry. And I had my name in the hat. And so
I. That was a very interesting
test of what was going on. And it usually was the first quarter of the
year, and I would get seven or eight of these calls, and each one had
a different thing. I haven't had a call like that. I
(34:31):
don't know, it's been three or four years. But there was a while there
where I was getting them every first quarter for four or five years, you know,
and it was kind of. Kind of fun, you know, I'll do it. 700 bucks
an hour. Why not? You know? Anyway, so here's. Here's a thought I
was thinking about. When it comes to this gentleman that was telling me his
restaurant was down 40. And I floated this idea to him, and
(34:53):
he's kind of cringed at it. I still think it's valid because
there's a whole thing about the language of wine. It's intimidating.
And as a side note, I'm going to go back to the
wines. The Les Ami Devant. This patch here had a
magazine in the 70s, and I'm going to start reading old articles. I have a
whole bunch of them about what people were talking about then,
(35:16):
not only about the industry, but how they were talking about wine. Like, Michael
Broadbent used a different set of terms than my father did to their friends
or whatever. And now they're now the pundits
on the social order say, well, we got to change the language of wine, which
makes no sense to me because I'm not going to understand the language either way.
But one of the things is, like the presentation, some of the innovation, you used
(35:37):
the word earlier of wine would be how we present to the
consumer. Maybe that's innovation, maybe it isn't. And my wife and I
were walking in Hermosa beach the other day. We saw a restaurant sign, and the
menu for wine or the Katuva, said
bold and aggressive, light and fluffy, Easy drinking. And
had had the wines instead of saying Cabernet Merlot. Yeah, yeah. And
(36:01):
I asked my. My wife, even though she'd been around it and was the controller
here for 25 years, she doesn't really, you know, she's not academically
attuned to wine. I said, does it make any sense to you? Does it change
your opinion of what this list is about? She says, I don't even know what
it means. And I thought, okay, that's kind of
interesting. Somebody changed the language. Yeah. And it still
(36:21):
doesn't resonate with somebody. Yeah, I think, I think what you're
describing, I've seen those wine menus as well is, is again
probably an attempt to get that 25 to 35 year
old interested in buying a glass of wine rather than a
Manhattan or an Old Fashioned or, or
espresso martini. So,
(36:43):
you know, it's a little bit of that. You know, when I think about, when
I, when I look at, you know, a wine menu with the
food, I think it can be kind of interesting if
you, if you can find a simple way to explain the
matchings with the food, especially for someone who doesn't know. But
I think, but I think it's more interesting to let people know, you
(37:05):
know, that you've got variety on the
menu and there's, and it's not overly complex, but there's
places they can go and they can just get a great glass of wine and
if, if they want, you know, sparkling versus a white
versus a ros or even a red with food that you
normally wouldn't have it with, that, that they're going to get their,
(37:28):
you know, they're going to get a great taste and great wine for the, for
the value. And I think that's really important. And I think
on those menus also what I've noticed is when you are,
when you can offer the, the premium and super premium
and then your entry levels are still high quality,
you're gonna get people who trade up and, and spend more. And
(37:50):
I think there's a way to do that. But, but you gotta do it in
a way that's not confusing and, and you gotta be a bit careful
on the land. That's the part. So that just let, that just, that gave me
a thought because everybody, you know, I, I think the aristocracy of
wine is, is overplayed and most
people are intimidated by the subject. But like you
(38:13):
said, the, no matter whether novices or collectors,
when you had that first glass or two at dinner time, the conversation
always turns to the glass of wine. And it is generally not
intimidating as I expect tonight to be, even though I can sense
much more in the wine than my friends will there. It's, we're gonna have a
great conversation about it. It sort of breaks the barrier down of that.
(38:36):
I'm thinking about flying out to join you tonight, but. Yeah, you should because
some single vineyard, Barolos. Okay. But
I was in Palermo only, God, it seems like
10 days ago and the bet. And this is
the part. Let me see if I can articulate this. It was the best
(38:56):
wine service I'd ever been exposed
to. And I was thinking, man,
but even though wine's intimidating to a lot of people, when you see this
guy work and you see the passion he put into serving you this glass of
wine, whether it was, you know, a 50, a €50 bottle off
the menu or it was a €200 bottle, didn't matter to him.
(39:18):
He was so passionate about it. It's an Albanian guy in Palermo. So figured that
one out. But then I started thinking, well, maybe that's. But that
is the important part of, of the culture of wine and that it might be
intimidating to some people, but when you, when you watch it and you see the
passion, you realize there's something very special about this.
And then I'm going to flip it over. This. I was ask your opinion of,
(39:40):
I think grocery outlet here in America just came out with the second
cheapest bottle. You heard of this? No, I haven't.
Well, so, you know, so the commercial goes like this. There's a guy sitting at
the thing and he's looking at the menu and he tells his wife, I'm going
to get the second cheapest. Like, that's like, I'm not going to get the cheapest
because of how intimidating, how stupid I look to buy the cheapest bottle. But I
(40:00):
don't want to get the most expensive because that's too expensive. But if I get
the second cheapest, I look like I know what I'm talking about. So they came
out with a brand called second cheapest bottle.
Well, I used to employ that strategy when I was younger, the second cheapest. But
I didn't want anybody to know I was employing it. Yeah, that's right. I don't
know if I would buy the label that says it, but I definitely did it.
(40:22):
You know, there was a brand that we used to be called and it didn't
last very long, but it was first bottle, second bottle, third bottle. And the
quality would decrease as you went on, because as the, as you went
to the up the rung or down the rung because you didn't care
as much if you're on the third bottle. It's funny you say
that. I actually like to go the other way around. I start. Yeah, I want
(40:43):
to finish with the best stuff. Because if you've had the best stuff and then
you drank something well after that. Oh, my goodness. I don't like
that. I totally agree with that. Yeah, let's
shift to the business side for a second. We're almost out of time actually. Yeah,
that's fine. But you know, you, you, I was listening to the podcast you had
with Emily Steckenborn on Bottled in China and we were talking about leadership
(41:04):
skills and in this brand. Have you seen a shift in
what it takes to. And you, you've done
this all over the world. Have you seen a shift or are
the principles the same as they've always been when it comes to corporate management and
working with people in this trade? I think
it, I have seen a shift. It's probably hasn't
(41:27):
changed the basics, but the speed
and the breadth of what you need to get
involved in to make a successful wine business, I think has changed.
And I think that's because now you've got, you know, direct to consumer.
Now you've got much more sophisticated retailers and
distributors. You know, the, the basics
(41:50):
of, of getting the right team in place, driving
your brands into the places you want to
be and presenting them the right way. That's a very high level way of saying
it. But, you know, whether that's a grocery store or a high end
restaurant, you know, white tablecloth restaurant or, or on a
site, you know, the ability to do that I
(42:13):
think takes a little bit of new set of skills and
a little bit of new set of sophistication
without losing the magic of the story
and the history of the product and that. And it's balancing
those two things, I think that really can
drive your wine business to grow above the
(42:36):
category wherever you're selling it. And that's really what you're trying to do, right? You
can't necessarily control, you know, has the whole
category for premium wine, you know, drop from,
you know, 8% growth in the US to 2%
or 1%. If it's growing at 1 or 2, you want to be growing your
business 5 or 6%. Right? If it's growing at 8, you want to be growing
(42:58):
at 12 or 15. Your ability to,
to kind of master some of these more sophisticated
skills, but keep the magic of what makes your
brand special and how you present it,
that's the magic of the wine business. And that's what interests me so much
more about it than other businesses where it's
(43:21):
just about the business skill and everything else and less about the storytelling.
You did that all over the world.
Did you find cultural differences
when you tried to do that? Because, I mean, I can't imagine landing in a
country for the first time. You sent over there, you have a budget Whatever it
is. And you said, I got to build the team right now. I mean,
(43:41):
that. That's a task. And then. Then balance after you get this team
going. Yeah, I. I mean, I. There's differences,
but there. I always like to say there's more similarities than
differences. You know, a customer in China,
a consumer in China actually has the same
(44:01):
basic needs. You know what I mean? Yeah.
You know, the consumer in China is having food or
a banquet with their friends, and they want a wine that, you know,
that look that looks good for them and tastes good and goes well with
the food. Right. A customer in China wants to grow his wine
category faster than. Than the market.
(44:23):
They want to understand their customers and their shoppers and figure out
how to do that. So the basic principles don't change.
I think your flexibility and cultural and
speed in how you simplify things and get
people to get the team to work on the same thing and drive the heck
(44:44):
out of it really fast. I think that's a little
bit of management magic. That can be
special, but the basics don't change. Do you ever
read something? One of the things I've been doing
since I've sold the company is just reading as much as I can to see
what people are thinking or doing. And sometimes I just go, that is it.
(45:05):
You are wrong. I mean, that is. That is not it, my friend.
So either you've never sold anything in your life, or you haven't been in the
streets, or you're just reading books and trying to come up with a reason, but
you sometimes just go, no, that isn't what it happens. No, it
happens all the time. And sometimes I see a wine brand make
a change on a label or a product, and I'm also saying,
(45:26):
no, that's not. That's. That. That's not true to your
brand. That's not really where you want to go. Do you remember Thrifty
Drugs? Yes. They were here, and they were
all over the country, but they were prolific in California. And my dad actually
sort of competed against them a little bit with his pharmacy chain. But
one of the greatest pieces of advice that I've ever heard anybody give to
(45:48):
anybody was the thrifty buyer.
Told Mike Houlihan, who founded Barefoot Sellers,
I want to see your label. If there's somebody walking
down the aisle, I need to see it. I forgot how many paces away.
I need to be able to pick that bottle out and know of it where
I'm. I need to know what I'm looking at when I'm this far away. From
(46:11):
it when I walk down the aisle. And he said,
that's what I did. I went home and I invented barefoot
sellers with this barefoot on the label and the toes and the in the
inks thing. He goes, the thing is Thrifty never
bought. Now, but
building on what you're saying is 100% right. And
(46:34):
we actually did research at Coke and we did the same research
when I went to treasury that more than
85% of the time, the purchase
decision of a wine buyer happens right there at the
shelf or at the menu
or on a device. Right. So is your product
(46:58):
there? Is it represented the right way? You know, how
is your execution at the point of purchase on the, you know,
on the device, in the restaurant, at the grocery
store? And once you realize that and you gear up
your company and business for that and
that becomes the most important, you know, one of the most important things you do
(47:19):
in addition to the product and the storytelling, again, that's where
the magic happens. So that fits right in. Packaging is
so key to not only, you know,
communicate what's important to your brand, but to get noticed.
And, and not only the packaging, but when you get that bottle up
there, do you have two or three facings? You know, is it eye level? You
(47:42):
know, I mean, all those things play in. But when you have that
knowledge that, you know, the consumer and shopper
make the decision right there, if they can see it and
they understand it and they want to buy it, then they'll do it. And if
they don't and it's not there or it can't be seen, forget it.
Fascinating. We're out of time and I
(48:04):
have. We need to get the second page.
Now. That's fine. Well, let me check the flights and see if I can get
out to see you tonight. Yeah, I'd love to have you. We. I'll give you
the end of the table there and you can have your own, your own audience.
But I'm looking forward to, yeah, I'm looking forward to sharing
tonight with these, with this gang. And
(48:26):
I see what I thought about was that episode of
Twilight Zone where Burgess Meredith is, you know, the bookworm and, and
he's, he thinks he's. That's all he wants. And he would be like to be
left alone. And then, you know, the end of the world comes and he's left
alone and he with in front of a library, but his
glasses broke so he couldn't read and so he had
(48:49):
nothing to share. You know, he didn't share with anybody, anybody. But now he can't
read. So I thought to myself, you know, what greater
gift it would be, is to be able to share your
experiences of wine and culture.
Because that's all you really get when it comes down to it is like you
get your friends, you get your family a glass of wine, and you know,
(49:10):
that's kind of all you need, you know, because eventually the. The
experiences are what form you and who you make. Make you who you
are. It's all about the experience and the sharing. Yeah,
absolutely. Look forward to sharing with you again on
the show as well as if we're ever cross paths.
Where are you at right now? I'm in Houston, Texas, right now.
(49:34):
Hey, you know what? Before you get off, there's a woman out there.
It's called Shankville. Shankoville. Oh, yeah, I saw your show. Yeah, I
saw that show. I gotta. I gotta get out and see her. Yeah, come on.
I think it's a Houston landing point. Yeah, yeah, come on
out and we'll do dinner and then you can go see her and.
No, you have to join me because you gotta hear the story firsthand. This is.
(49:58):
You already heard it. It's fascinating. No, definitely,
definitely. We'll do that. That's a date.
Your ability to kind of master some of these more
sophisticated skills, but keep the magic of
what makes your brand special and how you present it.
That's the magic of the wine business and that's what interests me so much more
about it than other businesses where it's just
about the business skill and everything else and less about the storytelling.
(00:22):
Sit back and grab a glass. It's Wine
Talks with Paul. Kate. Hey,
welcome to White Talks with Paul K. And we are in studio today in beautiful
Southern California with a little dreary today, but to have a conversation with Robert Foy.
Introductions in just a moment. Hey, have a listen to a show coming out.
It's on under the name Song of America. It's about the
(00:44):
Agonian family who have won INDY, the Indianapolis
500 five times, four times. And it's an incredible story
of immigration to America. And that's what the Song of America is about. But not
why we're here. Here to talk to Robert Foy. Had a great conversation with him
already. Welcome to the show. Great,
Paul, thanks. Kind of a weird thing. Welcome to the show.
(01:07):
And I'm not in studio with you, but I feel like I'm in your studio.
Are you. You go by Bob. Robert.
Yeah. More. Yeah, Robert. Okay. So Robert was the
CEO of Accolade Wines, one of the great
distributors of wine from Australia and to America, other parts of the
world, as well as CEO of Treasury Wine Estates, which you all know
(01:28):
about because they've made some huge news recently with some
acquisitions. But. And I want to talk about some of this
corporate America, part of or corporate part of the wine trade. But we're going to
talk about some of the, some of the states of the industry today and how
you got here. But let's talk about Accolade for a second.
I did some business with Accolade and this was an Australian
(01:50):
based distributor or did they
manufacture too? Of course,
we're the brand owner. Yes, absolutely. So we have about 70
brands and we do everything from
viticulture to winemaking to
filling the bottles to marketing and distributing all over the world. So
(02:11):
complete a full company. When did you
retire? Well, technically
I'm not retired yet. Oh, well, then we'll put you on payroll.
Much interested in work, pa but, but
technically from Accolade Wines as
CEO. I left end of February this year. You know,
(02:34):
I, I supposedly retired and I had to get out and I want to say
I had to get out to because as you know, the DTC wine market
is suffering greatly here in the States as well as Other parts of the world
in the first quarter of 2023 was looking so great.
But after 35 years, you know, did I want to
regen the company? Did I want to? And I. We were prolific
(02:56):
marketeers, prolific digital marketers. Just
decided not to. But I can't. I don't know how I had time to work.
I'm so busy today, it's like. I
don't know. I don't know where the time went. I know exactly how you
feel. And. And definitely I could flex my total
schedule as needed, depending on how much work I get. But I. But
(03:18):
I'm totally open to a new CEO role. We'll see how that goes. Or
board or. I've got a book I want to write on some of
my experiences in wine and private equity.
And also probably I'll teach an MBA class
on private equity and consumer products and things like that. But
(03:38):
I'm still pretty young, 58, so I've got
at least one more gig inside me if it comes to full time. But I
know exactly what you're talking about. There's certainly enough things to
fill up the time, whether you're working full time or not. You're a kid.
Let's talk about that for a second. And I brought it up, you know, during
COVID Well, first of all, I saw some writing on
(04:00):
the wall pre Covid. So 2000, you know, I started seeing some.
Some saturation, some congestion,
quality issues in the Marketplace somewhere around 2015.
But 2019 wasn't looking all that great, though it
would have been profitable for us. But 2020, of course,
incredible for most wine businesses, particularly people that had a robust E
(04:23):
commerce platform. You know, we were like 30%.
Robert. I could tell you that I could do no wrong during
COVID Whatever I told them to buy, they would buy. They could have been
Burgundy to Napa Cabs to, you know, white
Yellowtail. But it didn't take long, maybe
days, really. Since when Covid ended that the writing
(04:45):
on the wall for the wine trade was starting to be written. What do you
think? What do you think attributed to this, this current
situation that we're in, which is the industry is suffering, Everybody's trying to clamor. If
you listen to LinkedIn gossip, there's a billion reasons why,
but there's a billion solutions that nobody knows how to implement. Where do you
think that came from? Well, it's a really interesting
(05:06):
question. I think the first thing that you got to kind of go back to
as humans, we're very short term, so we kind of look at short term
trends, you know, and is this time different, you know,
than past times? But in reality, if you, if you look at
the long term, I. E. 30 to 50 years, I mean, the wine
(05:26):
trade goes through these cycles. That's the first thing.
And you know, we've had the discussion before, Paul, Wine is here
to stay. It's probably the most
culturally integrated beverage into
humans other than water. Yeah.
And for thousands of years. And it'll be here for the next couple thousands
(05:48):
of years. And it's a fascinating business. But I think these cycles, as,
you know, you know, growth comes in, people get really
excited. Maybe they over invest, you know, the industry over
invests in, in vines and capital and then, you know, something
changes and then it goes the other way and people start taking vines
out and kind of hunkering down. But
(06:10):
with COVID definitely there was that period. I
honestly, I think it was only about 12 to 14 months
where people stocked up at home, especially on red
wine, and kind of got their inventories ready. And
this is the brave new world of, you know, not working in the office.
And every day I might have a glass of wine at five or six o'
(06:32):
clock and that's fine because I've worked all day. And
then Covid ended and I think honestly, it's probably
taken, you know, 12 to 24 months to
get through that. I think we're starting to get through
it now. We do have, as you know, some other
trends of innovation and spirits
(06:54):
and beer and seltzers and all these kinds of
things. We got shifting channels with restaurants
and supermarkets and everything else. And I think all
that has kind of muddied the water a bit. So
definitely we're still in the slowdown. You know, these things
tend to take longer to get through. It might be another
(07:16):
12 or 24 or 36 months. But I think
wine will come back, you know, will it come roaring back
to premium wine growing 8 to 10% a year?
Maybe not, but I don't think it'll be negative growth or
even necessarily flat growth over the next 10 years.
You know, I think you said a mouthful there when it comes
(07:39):
to, you know, the reason why, because wine is historically, and I always
say when I talk to people, I said it yesterday in a podcast as well,
which is there's probably no product in the, on, on the
planet that's as historical or culturally relevant than wine.
Like, if you were to pick the five elements of a culture, you would take
a language, if the has one land, if they still have it, the
(08:00):
cuisine and that's not always the case.
And then wine is probably one of the top five
representatives of a culture again, if they have, if they have a
wine trade. So I think you're right. I don't think it's going anywhere.
But it seems deep rooted, like when the, when, when Covet hit.
Let's talk about the Silver Oaks and the Cuses of the world. They would never
(08:22):
speak to a guy like me. They would have in the early days when I
first started working in this business. But as they got more popular, they
didn't need direct to consumer clubs and they didn't need this, the press.
But then they came back and I thought this was fascinating. I told him, I
said, look, you want me to help sell some of your wines during this period
because you were a house poor or you, or at least a buy the glass
(08:42):
program at some restaurant and now there's none, you know, you're not getting any
sales, then don't forget me when you're gone. Okay, so here's the
phenomenon. I sold a ton of Caymus 1 liters, tons of them.
Stopped selling them the day Covid was over. I still have like nine cases here,
the warehouse and, and, and I
was, I was getting, you know, much more than the current retail price was
(09:05):
because of COVID And. But I don't think the restaurants
have recovered completely from what the traffic was
prior to, prior to Covid. I
think that's absolutely right. And again, I think
the restaurant business is in recovery.
It's pretty slow, but it's coming back. I think it will
(09:29):
come back. I think those habits that we kind of built over
those 12 to 18 months of COVID or 24 months, depending on where
you were in the world were real. And some of those are still
kind of there. I, you know, I'm going to be at home more. I'm
going to, you know, cook more, maybe watch Netflix a little
more than I normally would. But I think
(09:52):
again, these trends over time are going to
go back more toward normal, but sometimes it
takes longer than we think. And I was just reading the other day also about
the housing market. Not the housing market, sorry, the office market
in New York and some of these other cities is just now
starting to get more exciting. And again,
(10:14):
those kind of trends of people back in the office and having the
business dinners and do, you know, and being more
in the city and outside the home, I think that's going to continue
and it will get back to normal, but it's going to take a couple more
years for sure. I have a building here in Monrovia,
had 7,500 square feet of office space. I built them
(10:35):
years ago for a tenant and they moved out. And I
said, you know, I'm going to turn these into executive suites because people are coming
out of this work at home mentality, which
I don't know if you ever tried. I, I can't do it for a
variety of reasons, not the least of which is I'm constantly being called away from
my desk to get something off the top shelf.
(10:58):
But it start, it's filled, it filled up very quickly. A very
reasonable 500 to $1,000 a month for a, you know,
shared conference room. Two of them, you know, obviously bathrooms, the kitchen, all that
stuff, but nicely done offices. And I, and I
didn't have any prognostication to do this except that the space was
empty. But I think people are coming out now saying
(11:19):
this old, this new methodologies really aren't working for
us. And it's time to do, you know, what we need to do.
Because you've been, how long you been doing this? You talking
about working in general or. 35 years,
10 years in wine, 25 in beverages.
So in non, non alcoholic beverages. Prior
(11:43):
Coca Cola company All over the world. Yeah,
we talked about that briefly and I thought that was fascinating. Was there
a, was there a bridge between, you know, consumer goods
like Coca Cola or anything else to, to wine or you just had a fascination
with wine and liquor to. Yeah, yeah. The bridge was called
going to sleep one night and having been a Coke executive for 25 years,
(12:05):
waking up the next morning as a new wine executive and trying to
learn everything about wine. But that's like the Taylor Sellers, is it?
Exactly. There was a natural bridge, I would say
two things. One is when I was at Coke and I was at Coca Cola
for, you know, roughly 24 years all over the world, you know, I
learned how to build a beverage business. I learned everything
(12:28):
from, you know, making a beverage to distributing it,
marketing, selling it, you know, building a team, getting,
you know, showing up in a new country and a new job. And how do
you build the business? So that's the first thing. And the second
thing is just all that fmcg, fast
moving consumer goods, consumer CPG knowledge.
(12:51):
And then the opportunity came to move over to Treasury Wine
Estates and move into wine. And
I had looked at all kinds of industries. I had looked at beer, other
beverages, hotels, et cetera, et cetera. And what
I saw at treasury at that time was a
dynamic business. It is a beverage.
(13:13):
The Beverage is quite different. And we could talk about the
magic in the history of winemaking and
storytelling, of all the winemaking. And I embrace that. And I thought that was a
really unique part of it. But the other part of it is that the
business still has customers and
consumers who, if they can't find your product and can't
(13:35):
buy your product, then you don't sell it. And when they do find your
product and it's in this long, huge
wine aisle, you know, amongst a thousand other
products, how do they actually notice it? Because of the
packaging and the. And the way you've presented it in
store? And then how does it taste? And does it. Is it
(13:58):
good and does it fit their needs? Can you tell that story?
Is the price right and do they come back and buy it? And that whole
journey is. Is a little bit the same
and a little bit different for wine and Coca Cola and
beverages, but where I looked for where the similarities
were that could actually use in, you know, use in the wine industry
(14:20):
and the wine business. And I also appreciated the
differences. You know, it's a lot different to.
To plant a vineyard, grow a wine, put your heart
and soul into it, put it in a barrel for two years,
and then go out and explain to someone what it is and why they
should pay so much for it. That's a lot different than, you know,
(14:43):
mixing some ingredients and putting it down a Coca Cola beverage
line, although some of the marketing and sales is similar. So
I think just the appreciation for the industry, the history,
and also the curiosity of wanting to learn. And I
always tell the story. When I started with. With. With in wine 10 years
ago, I was kind of an 80% beer, you know,
(15:05):
20% wine guy. And now I'm a, you know,
80%, 90% wine guy. 10, 20% beer
guy. And that's what the wine industry does because it's such a fascinating and
amazing business. That was very articulate because that's really important part
of what we do and how we land here as well. Were you. Were you
at Coke, let's say, 88, 89? I guess so, Yes,
(15:27):
I was. Do you know where you were at that time?
Sorry, I was not. I started in
1992. I'm sorry. Yeah, so it might have been around
that time. A quick story then. I want to ask you a question about some
of this. But they were into wine trade for. Didn't they own Sterling Vineyards and
they owned Taylor Sellers and a few other. That's absolutely right. Yeah. And
(15:48):
the wor. I think the worst place for A wine business is probably
a corporate conglomerate. Yeah.
The reason I brought it up is my. My wife's uncle has passed away since,
was the inventor of the spoon straw and the flexi straw mit,
you know, type guy. But he had sold his
company to Coca Cola. It was called Wink. Then they merged them
(16:12):
with a company called Winkler Products. And they were making plastic plates and stuff and
Coca Cola. But one of his tasks was to create the synthetic
cork for the Taylor Sellers. Three, I think they're three
liters or one and a half liter. You know, the Gallo rivalry back
then for the Rhine wine and the Hardy Burgundy and stuff like that. And we,
I made a deal with Coca Cola and I gotta go find the contract and
(16:34):
that was to take over. And we found the molds for these, for the
synthetic corks for the bar caps in here in El Monte, Southern
California. And we went and looked at them and they were still had virgin plastic
in the hoppers ready to make corks. And I made a deal with
Coca Cola to get. They were going to skim off the top, give me the
product, give me everything that they had. And I was going to set it up
(16:55):
and then start making synthetic corks. This is before
they were popular. And we won't get into the details of the engineering
problems that the other ones had, but Coke had figured it out
and my uncle had figured it out, and so they had a superior cork product
long before synthetic corks were even used. And
I suppose that's part of the, part of your comment,
(17:18):
sometimes corporate America, the conglomerate gets in. This gets in
the way of its own feet, you know, just stumbles on its own feet. But
let me ask this question. Coca Cola, all
those beverages that they made, is for everybody. Every person in the world is
a potential customer of a can of Coke or a bottle
of Coke. But wine, you know, if you, if you ask the, the
(17:40):
Institute here in America, you know, 25% of the people would
raise their hand if you ask them, do you drink wine? It's a considerably
different marketplace to, to address.
It is. But the first question I would ask too
is, you know, 25% of the
people would raise their hand. But what about during their whole life? And
(18:03):
people kind of, you know, move through different beverages during their whole
life. And one of the things you and I talked about was the young consumer,
for instance, and the fact that, you know, they're more
open to having cocktails and spirits and,
you know, low alcohol beer, et cetera, et cetera. And
I think that's great. And that's part of innovation in beverages and alcohol.
(18:26):
But as those younger consumers age and get more
money and also get more into food
and cuisine, as you mentioned, and
you know, they're going to get more into wine and wine will slowly creep
into more of their offerings. So I think,
I think, you know, there's always the snapshot of who the consumer is today,
(18:50):
but there's always that journey. And, and that's what
also makes wine very interesting, is that, you know, with
Coca Cola you kind of learn how to drink it earlier in your life
and then you kind of practice not drink or drinking it
less as you get older and, and substituting things for it.
And wine's the exact opposite. You kind of, you kind of take your first drink,
(19:12):
you know, and then you either fall in love with it or, oh, you know,
I, I like other things right now. But as you age and get older and
get a bit more sophisticated with your palate and cuisine and, and
experiences also I think you're much more open to wine. And that's the,
that's the journey you got to figure out as a, you know, selling your
products and marketing your products is how do you get some of those consumers as
(19:34):
well. That's really interesting. I had a conversation with an
MW who's been studying the palate and the, and
gastronomy and its relationship, and he was saying that there's some
studies now that show that, that at least in
the wine sector, that if you start out drinking the entry level stuff, the
slightly sweet stuff, the Josh's and the apothic reds, that eventually you get
(19:57):
your pallet gets bored of that and you learn that the
complexity and you know, what makes a fine wines a
fine basically. And I, and I reflect on what you're saying.
Do you agree with me that most generations eventually,
maybe at different times in their lifespan, come to that glass
of wine that they go, this is kind of interesting in,
(20:20):
in bulk, obviously not 100 of a generation, but there's a
movement like the baby boomers a little earlier than I think that the millennials were
and certainly with the Gen Z's are when they realize that this,
this is a very special beverage. I would 100%
agree with you. And I think, you know, again, as you,
you have to look at how people kind of operate
(20:44):
as they age and how they get more interested in
experiences, cuisine, all that kind of stuff. And
I think wine just fits totally into that. And I think
definitely the amount of wine consumed goes up
as you age, especially, you know, when you start getting, I would
Say, into your late 40s, early 50s and
(21:05):
beyond. It does. You know, tonight, I think I. I'm sorry
I had to postpone this call from yesterday. Had lunch
with Pio Cesareo Cesare, and had an incredible
Barolos, but only
because tonight I'm having a dinner with some friends, and we had visited Cesare
Pio Cesare together in Piemonte, just not just a few months ago. And
(21:27):
I wanted to express that, but I was thinking about what I was going to
tell them. This is 12 people in total. And I think the
concept was that my little speech was going to be about,
you know, wine creates this conduit
to the human soul that. That we want to share.
Like, you don't want to share a glass of Sprite and talk about Sprite
(21:50):
or even Jack Daniels or, you know, or a, you know,
Heineken. But you do want to share the cultural
differences, the expression, the. The
thought process you have when you taste a glass of wine.
And I got a chance to taste some pretty special Barolos yesterday and bring them
tonight to the party so we can have that discussion again. Is anything
(22:12):
that you think of evoke such memory
about culture, about, you know, where you're at when you
were at and what you felt when it happened? Yeah, absolutely not.
And I think it's just.
It's hard to explain to people, but they start to get it when they experience
it themselves. You know, I can ask
(22:35):
anybody at any time, hey, would you like to have a dinner? I've got this
interesting wine and, you know, unless they're. Unless they don't
drink alcohol or they're just, you know, not
interested in wine. 100%, you know, the
response rate's like 97. Absolutely. We can reschedule
it. That's pretty good. And it is. And if you notice. If you notice
(22:57):
a wine dinner, too, it's quite interesting. You know, the first
kind of 30 minutes are, you know, can be fun and
interesting and stuff, but it's not nearly as fun as
the last 30 minutes after everybody had two or three glasses.
And. And they always say that, you know, wine, obviously, in moderation,
but wine, you know, in those discussions
(23:21):
become richer and more interesting. And I think it has
to do with, you know, it actually does help, you
know, the thinking process or at least
unleashing a bit more creativity and talkativity
in the conversation. And. And, you know, rarely do I have a
dinner now if both parties or all the
(23:43):
people there, a couple glasses of wine that I find not very
interesting. Well, there's always something that comes out and I think
that's part of it. And you had mentioned those, those parts of culture, you
know, land, cuisine, wine, you know,
family, a few other things. But if you think about it, wine actually
then intersects with land and cuisine and
(24:06):
probably some of the other things as well. So it really does
become part of your life. And, and also if you look at
people who move into the wine business and really
start to understand it, and this might be true for spirits and, and beer as
well, but I think it's especially true for wine. They never want to
leave the industry because it's so interesting and, and the
(24:28):
thoughts of having those dinners and not, not being able
to share those experiences over wine,
you know, become something they're not, not as interested in. It sounds like,
you know, it sounds like you, you different career path than
mine was. I did work for corporate America in a different product, a very
large corporation. But when I started in, in
(24:50):
wine, you were Talking about being 70 beer and 30 wine when you started in
the trade. And I, my father came to me and said,
I'm going to sell wine of the Month club. Do you, you want to take
a look at it now? At that time I was in software and I said,
sure. So I start packing and charging credit cards and, and
for me it was business. We were direct to consumer mail order company
(25:11):
back then. There was no Internet. We, we mailed stuff, you know, we had,
I was doing a million pieces of mail a year,
but it took about 10 years, maybe more for me
to realize that this community is so special and
the product is so special. And now I wave the flag of the
romantic side of our wine, even though it's still business.
(25:33):
And speaking of that, so we're into this, you know, Constellation. I don't know if
they did sell their wine portfolio, but they were talking about
selling their wine portfolio and you were talking about corporate, you
know, corporate conglomerates are probably not a place for a winer
to be. But why do you think it became an important
piece of places like Constellation, Diageo and those things? What,
(25:56):
what was the allure for them? Because the margins aren't that great.
Yeah, I don't know so much about Diageo,
but I do know about Constellation and, and I, you know this story
as well, that basically they started with wine. It
was a country that was started, you know, in New
York selling New York wine and then, and
(26:19):
then kind of expanded from there and that, you know, I won't go through the
whole story, which I'm sure you and your listeners are kind of familiar with, but
because of how well they did on expanding that wine
portfolio and doing distribution the right way.
And I've never worked at Constellation, but
they got the ability to distribute some beer brands, which we all
(26:42):
know Corona was the first one
in Modelo and Pacifico and some other ones. And then that business
became much bigger and more profitable than the wine
business. They still expanded the wine business a lot and they tried to
premiumize. But you're right, they've. They've basically sold
off twice. They, they sold off their really
(27:06):
cheapest brands about eight, nine years
ago, sorry, about five or six years ago.
And then they just sold another tranche of brands
literally announced last month. And now they're left
with just some very, I think, premium brands.
But I think for their business. Now we, we were talking about the
(27:29):
conglomerate just the way that it's developed. And it's probably been
hard for them to sell those wine brands because, you know, that's how they started.
But in reality, the margins aren't as good as their beer business. They
don't have as much scale, they don't have as much market share.
And it just becomes a business decision, I think, and you just
gotta go with it. But those wine brands, I think going to
(27:52):
other players, if they, if they give
them the attention and focus that maybe
a conglomerate can't give, it could, could do quite well. So we'll see.
There's always the positives and negatives of those things. Well, I
think that's accurate. I think that, you know, with
the consolidation of distributors worldwide, at least in America, there's a huge
(28:14):
consolidation. I haven't decided whether
that's good or bad for the consumer. And I think in general it's good for
the consumer, the regular consumer. And for the fine wine
collector and those guys, I don't think it's as good. But, but for the general
consumer, who's who. And I read something this morning about how
a brand, if you're going to brand something, you need
(28:38):
forgot how many touch points on four different platforms. Let's face it,
you know, space ads, you know, running ads in
newspapers, magazines and TV ads for liquor and wine. Just, you know, they're,
they're passe and they don't work. There's no more Bewitched, you know, Larry
Tates of the world. Right, right. And so you have to be
on social and damned if you. And damned if you don't, because if you, you're
(29:01):
not going to see the ROI there. But if you don't do it, you're not
going to be anybody. So it's sort of a tough situation. But just to brand
something, you have to be, you know, you have. There's so many touch points
with a consumer on so many different platforms before they believe your brand.
And I think the horsepower behind the conglomerate gets you that.
Right. That's why these brands grow so quickly in a, in a
(29:21):
store. But at the same time, these boutique wineries in
Napa and Bordeaux and wherever, you know, they're, they're
slugging it out right now. They're having a. Yeah, they're having a pretty tough time.
Yeah. But I think, I think the advantage of the smaller players
is potentially just more that, you
know, premium and more that kind of
(29:45):
blocking and tackling on, on, on
building a premium brand versus, you know,
kind of the more, like you said, the more common ways of doing it.
So I think that that can be quite interesting. Do you think, do
you think the world of. And I asked this question of an Armenian winemaker the
other day because, you know, I mean, it's like this very
(30:07):
young industry, even though it's been around for 6,000 years, as far as
contemporary products and contemporary manufacturing.
But do you think the, do you think the days of I'm
a good surgeon and I'm retiring and I have a billion dollars or
I'm, you know, government contract, I used to build freeways and
love the wine. I really love my wine. I want to go to Napa and
(30:29):
I want to start a chateau and buy the best winemaker and, and,
and then, you know, have my own brand. Do you think those days are over
as far as, like, even an expectation of a
profit? Definitely not.
Well, I think we're not what I expected.
Absolutely. I think we're in a cycle again. You know, it's
(30:50):
a bit of a tough time, so everybody kind of retrenches
again. You go back to that experience if you're a billionaire and
you want to start, you know, kind of the next phase of your life or
kind of expand a bit and want to share experiences. You know,
getting a winery and trying to work on it is one of the most
interesting things that you can do. It's funny you mentioned Armenian
(31:12):
winemaker, because I just had a bottle, I forgot the brand name last,
last week of a, of a red, Armenian red. It was quite good,
actually, and for the price, it was amazing. And I, I,
I've never tried an Armenian wine before. I would like
to share one with you. I have a, I have a few of my favorites.
Yeah, we can share that and some of your other wines that you
(31:34):
mentioned earlier in the podcast.
Well, I was just an Armenian. I shot. I had three days of shooting with
some winemakers together. I'll send you the reel. It's. We are
raising money for the local. A TV station, but the content
came out really good. And the people I spoke with are really interesting.
And I think of the. The five best wine brands in
(31:57):
America, in Armenia. But that's a tough racket. I mean, we're talking about unknown
region. In fact, one of the. One of the gentlemen says
the. The tough thing is we're unknown grapes from an unknown place.
Totally. It is. And the cool thing is it's an unknown
grape from an unknown region. Exactly. If you get people to try
it. Yeah. You know, back to question about the. The
(32:20):
billionaires buying. There's another thing that's going on which I know you're familiar
with, is private equity has bought quite a bit of wine. True.
Recently, as you know. Interesting point. Sycamore
bought Shadow St. Michelle for, you know,
a fairly large amount of money. That was about three, four,
three years ago. Yeah. Butterfly just bought
(32:43):
Duckhorn for 1.9 billion. Yeah.
Silver Oak has a major investment from private equity.
So actually, those kinds of
investments tends to tell me we might be at the
cycle low because, of
course, those private equity investors want to return on their money,
(33:06):
and they're not going to be buying into an industry that doesn't
have much prospects. So I think. I think we might sit here,
I'll make a date with you to do another podcast in three years,
and we might be talking about totally different things and trends in the
wine business being much more positive. But I think that that private
equity investment's interesting as well. That's a huge point
(33:28):
about people putting money into it now when they see what's going. I mean,
there's no mystery about it. I was talking to a restaurateur yesterday. He says I'm
down my wine bottle sales are down 40% and he's actually
revamping the whole thing. I want to talk about that for a second to see
what you think of this. But one of my litmus tests, as I was
here, you know, you know, sending 33 million emails out,
(33:49):
you know, in 2022. One of the litmus tests I
had here about what was going on in the industry wasn't only just my consumers
and people I was talking to and how they responded to what we were doing.
One of them was how many calls I got for.
I think I got 750 an hour to talk to.
Not private equity, because I never knew where they're coming from, but these services
(34:10):
that. That will go do research for somebody interested in getting into
any industry. And I had my name in the hat. And so
I. That was a very interesting
test of what was going on. And it usually was the first quarter of the
year, and I would get seven or eight of these calls, and each one had
a different thing. I haven't had a call like that. I
(34:31):
don't know, it's been three or four years. But there was a while there
where I was getting them every first quarter for four or five years, you know,
and it was kind of. Kind of fun, you know, I'll do it. 700 bucks
an hour. Why not? You know? Anyway, so here's. Here's a thought I
was thinking about. When it comes to this gentleman that was telling me his
restaurant was down 40. And I floated this idea to him, and
(34:53):
he's kind of cringed at it. I still think it's valid because
there's a whole thing about the language of wine. It's intimidating.
And as a side note, I'm going to go back to the
wines. The Les Ami Devant. This patch here had a
magazine in the 70s, and I'm going to start reading old articles. I have a
whole bunch of them about what people were talking about then,
(35:16):
not only about the industry, but how they were talking about wine. Like, Michael
Broadbent used a different set of terms than my father did to their friends
or whatever. And now they're now the pundits
on the social order say, well, we got to change the language of wine, which
makes no sense to me because I'm not going to understand the language either way.
But one of the things is, like the presentation, some of the innovation, you used
(35:37):
the word earlier of wine would be how we present to the
consumer. Maybe that's innovation, maybe it isn't. And my wife and I
were walking in Hermosa beach the other day. We saw a restaurant sign, and the
menu for wine or the Katuva, said
bold and aggressive, light and fluffy, Easy drinking. And
had had the wines instead of saying Cabernet Merlot. Yeah, yeah. And
(36:01):
I asked my. My wife, even though she'd been around it and was the controller
here for 25 years, she doesn't really, you know, she's not academically
attuned to wine. I said, does it make any sense to you? Does it change
your opinion of what this list is about? She says, I don't even know what
it means. And I thought, okay, that's kind of
interesting. Somebody changed the language. Yeah. And it still
(36:21):
doesn't resonate with somebody. Yeah, I think, I think what you're
describing, I've seen those wine menus as well is, is again
probably an attempt to get that 25 to 35 year
old interested in buying a glass of wine rather than a
Manhattan or an Old Fashioned or, or
espresso martini. So,
(36:43):
you know, it's a little bit of that. You know, when I think about, when
I, when I look at, you know, a wine menu with the
food, I think it can be kind of interesting if
you, if you can find a simple way to explain the
matchings with the food, especially for someone who doesn't know. But
I think, but I think it's more interesting to let people know, you
(37:05):
know, that you've got variety on the
menu and there's, and it's not overly complex, but there's
places they can go and they can just get a great glass of wine and
if, if they want, you know, sparkling versus a white
versus a ros or even a red with food that you
normally wouldn't have it with, that, that they're going to get their,
(37:28):
you know, they're going to get a great taste and great wine for the, for
the value. And I think that's really important. And I think
on those menus also what I've noticed is when you are,
when you can offer the, the premium and super premium
and then your entry levels are still high quality,
you're gonna get people who trade up and, and spend more. And
(37:50):
I think there's a way to do that. But, but you gotta do it in
a way that's not confusing and, and you gotta be a bit careful
on the land. That's the part. So that just let, that just, that gave me
a thought because everybody, you know, I, I think the aristocracy of
wine is, is overplayed and most
people are intimidated by the subject. But like you
(38:13):
said, the, no matter whether novices or collectors,
when you had that first glass or two at dinner time, the conversation
always turns to the glass of wine. And it is generally not
intimidating as I expect tonight to be, even though I can sense
much more in the wine than my friends will there. It's, we're gonna have a
great conversation about it. It sort of breaks the barrier down of that.
(38:36):
I'm thinking about flying out to join you tonight, but. Yeah, you should because
some single vineyard, Barolos. Okay. But
I was in Palermo only, God, it seems like
10 days ago and the bet. And this is
the part. Let me see if I can articulate this. It was the best
(38:56):
wine service I'd ever been exposed
to. And I was thinking, man,
but even though wine's intimidating to a lot of people, when you see this
guy work and you see the passion he put into serving you this glass of
wine, whether it was, you know, a 50, a €50 bottle off
the menu or it was a €200 bottle, didn't matter to him.
(39:18):
He was so passionate about it. It's an Albanian guy in Palermo. So figured that
one out. But then I started thinking, well, maybe that's. But that
is the important part of, of the culture of wine and that it might be
intimidating to some people, but when you, when you watch it and you see the
passion, you realize there's something very special about this.
And then I'm going to flip it over. This. I was ask your opinion of,
(39:40):
I think grocery outlet here in America just came out with the second
cheapest bottle. You heard of this? No, I haven't.
Well, so, you know, so the commercial goes like this. There's a guy sitting at
the thing and he's looking at the menu and he tells his wife, I'm going
to get the second cheapest. Like, that's like, I'm not going to get the cheapest
because of how intimidating, how stupid I look to buy the cheapest bottle. But I
(40:00):
don't want to get the most expensive because that's too expensive. But if I get
the second cheapest, I look like I know what I'm talking about. So they came
out with a brand called second cheapest bottle.
Well, I used to employ that strategy when I was younger, the second cheapest. But
I didn't want anybody to know I was employing it. Yeah, that's right. I don't
know if I would buy the label that says it, but I definitely did it.
(40:22):
You know, there was a brand that we used to be called and it didn't
last very long, but it was first bottle, second bottle, third bottle. And the
quality would decrease as you went on, because as the, as you went
to the up the rung or down the rung because you didn't care
as much if you're on the third bottle. It's funny you say
that. I actually like to go the other way around. I start. Yeah, I want
(40:43):
to finish with the best stuff. Because if you've had the best stuff and then
you drank something well after that. Oh, my goodness. I don't like
that. I totally agree with that. Yeah, let's
shift to the business side for a second. We're almost out of time actually. Yeah,
that's fine. But you know, you, you, I was listening to the podcast you had
with Emily Steckenborn on Bottled in China and we were talking about leadership
(41:04):
skills and in this brand. Have you seen a shift in
what it takes to. And you, you've done
this all over the world. Have you seen a shift or are
the principles the same as they've always been when it comes to corporate management and
working with people in this trade? I think
it, I have seen a shift. It's probably hasn't
(41:27):
changed the basics, but the speed
and the breadth of what you need to get
involved in to make a successful wine business, I think has changed.
And I think that's because now you've got, you know, direct to consumer.
Now you've got much more sophisticated retailers and
distributors. You know, the, the basics
(41:50):
of, of getting the right team in place, driving
your brands into the places you want to
be and presenting them the right way. That's a very high level way of saying
it. But, you know, whether that's a grocery store or a high end
restaurant, you know, white tablecloth restaurant or, or on a
site, you know, the ability to do that I
(42:13):
think takes a little bit of new set of skills and
a little bit of new set of sophistication
without losing the magic of the story
and the history of the product and that. And it's balancing
those two things, I think that really can
drive your wine business to grow above the
(42:36):
category wherever you're selling it. And that's really what you're trying to do, right? You
can't necessarily control, you know, has the whole
category for premium wine, you know, drop from,
you know, 8% growth in the US to 2%
or 1%. If it's growing at 1 or 2, you want to be growing your
business 5 or 6%. Right? If it's growing at 8, you want to be growing
(42:58):
at 12 or 15. Your ability to,
to kind of master some of these more sophisticated
skills, but keep the magic of what makes your
brand special and how you present it,
that's the magic of the wine business. And that's what interests me so much
more about it than other businesses where it's
(43:21):
just about the business skill and everything else and less about the storytelling.
You did that all over the world.
Did you find cultural differences
when you tried to do that? Because, I mean, I can't imagine landing in a
country for the first time. You sent over there, you have a budget Whatever it
is. And you said, I got to build the team right now. I mean,
(43:41):
that. That's a task. And then. Then balance after you get this team
going. Yeah, I. I mean, I. There's differences,
but there. I always like to say there's more similarities than
differences. You know, a customer in China,
a consumer in China actually has the same
(44:01):
basic needs. You know what I mean? Yeah.
You know, the consumer in China is having food or
a banquet with their friends, and they want a wine that, you know,
that look that looks good for them and tastes good and goes well with
the food. Right. A customer in China wants to grow his wine
category faster than. Than the market.
(44:23):
They want to understand their customers and their shoppers and figure out
how to do that. So the basic principles don't change.
I think your flexibility and cultural and
speed in how you simplify things and get
people to get the team to work on the same thing and drive the heck
(44:44):
out of it really fast. I think that's a little
bit of management magic. That can be
special, but the basics don't change. Do you ever
read something? One of the things I've been doing
since I've sold the company is just reading as much as I can to see
what people are thinking or doing. And sometimes I just go, that is it.
(45:05):
You are wrong. I mean, that is. That is not it, my friend.
So either you've never sold anything in your life, or you haven't been in the
streets, or you're just reading books and trying to come up with a reason, but
you sometimes just go, no, that isn't what it happens. No, it
happens all the time. And sometimes I see a wine brand make
a change on a label or a product, and I'm also saying,
(45:26):
no, that's not. That's. That. That's not true to your
brand. That's not really where you want to go. Do you remember Thrifty
Drugs? Yes. They were here, and they were
all over the country, but they were prolific in California. And my dad actually
sort of competed against them a little bit with his pharmacy chain. But
one of the greatest pieces of advice that I've ever heard anybody give to
(45:48):
anybody was the thrifty buyer.
Told Mike Houlihan, who founded Barefoot Sellers,
I want to see your label. If there's somebody walking
down the aisle, I need to see it. I forgot how many paces away.
I need to be able to pick that bottle out and know of it where
I'm. I need to know what I'm looking at when I'm this far away. From
(46:11):
it when I walk down the aisle. And he said,
that's what I did. I went home and I invented barefoot
sellers with this barefoot on the label and the toes and the in the
inks thing. He goes, the thing is Thrifty never
bought. Now, but
building on what you're saying is 100% right. And
(46:34):
we actually did research at Coke and we did the same research
when I went to treasury that more than
85% of the time, the purchase
decision of a wine buyer happens right there at the
shelf or at the menu
or on a device. Right. So is your product
(46:58):
there? Is it represented the right way? You know, how
is your execution at the point of purchase on the, you know,
on the device, in the restaurant, at the grocery
store? And once you realize that and you gear up
your company and business for that and
that becomes the most important, you know, one of the most important things you do
(47:19):
in addition to the product and the storytelling, again, that's where
the magic happens. So that fits right in. Packaging is
so key to not only, you know,
communicate what's important to your brand, but to get noticed.
And, and not only the packaging, but when you get that bottle up
there, do you have two or three facings? You know, is it eye level? You
(47:42):
know, I mean, all those things play in. But when you have that
knowledge that, you know, the consumer and shopper
make the decision right there, if they can see it and
they understand it and they want to buy it, then they'll do it. And if
they don't and it's not there or it can't be seen, forget it.
Fascinating. We're out of time and I
(48:04):
have. We need to get the second page.
Now. That's fine. Well, let me check the flights and see if I can get
out to see you tonight. Yeah, I'd love to have you. We. I'll give you
the end of the table there and you can have your own, your own audience.
But I'm looking forward to, yeah, I'm looking forward to sharing
tonight with these, with this gang. And
(48:26):
I see what I thought about was that episode of
Twilight Zone where Burgess Meredith is, you know, the bookworm and, and
he's, he thinks he's. That's all he wants. And he would be like to be
left alone. And then, you know, the end of the world comes and he's left
alone and he with in front of a library, but his
glasses broke so he couldn't read and so he had
(48:49):
nothing to share. You know, he didn't share with anybody, anybody. But now he can't
read. So I thought to myself, you know, what greater
gift it would be, is to be able to share your
experiences of wine and culture.
Because that's all you really get when it comes down to it is like you
get your friends, you get your family a glass of wine, and you know,
(49:10):
that's kind of all you need, you know, because eventually the. The
experiences are what form you and who you make. Make you who you
are. It's all about the experience and the sharing. Yeah,
absolutely. Look forward to sharing with you again on
the show as well as if we're ever cross paths.
Where are you at right now? I'm in Houston, Texas, right now.
(49:34):
Hey, you know what? Before you get off, there's a woman out there.
It's called Shankville. Shankoville. Oh, yeah, I saw your show. Yeah, I
saw that show. I gotta. I gotta get out and see her. Yeah, come on.
I think it's a Houston landing point. Yeah, yeah, come on
out and we'll do dinner and then you can go see her and.
No, you have to join me because you gotta hear the story firsthand. This is.
(49:58):
You already heard it. It's fascinating. No, definitely,
definitely. We'll do that. That's a date.
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