November 30, 2023 • 36 mins
In this episode, Brandon sits down with Quinton Jay, the founder and managing director of Bacchus Consulting Group and a seasoned expert in the beverage alcohol industry. Throughout their conversation, Quinton Jay shares a wealth of insights and experiences, making this episode a valuable resource for anyone interested in the wine industry.
Together, they delve into a wide range of topics, including the evolving consumer trends impacting the wine industry, the profound influence of technology, and the numerous challenges and opportunities that wineries face in today's dynamic landscape. Quinton Jay's extensive knowledge and perspective offer listeners a deeper understanding of the wine business.
Throughout the episode, you'll also discover the importance of storytelling and customer engagement in the wine industry, the complexities of inventory management and distribution, the evolving role of e-commerce with a focus on platforms like Shopify, the significance of marketing and legal compliance for wine businesses, and Quinton's personal favorite wine memories and standout bottles.
Whether you're a seasoned professional in the beverage alcohol industry or simply curious about the world of wine, this episode provides valuable takeaways and a comprehensive view of the industry's challenges and opportunities. Don't miss this enlightening conversation with Quinton Jay.
Timestamps
- 🎙️ (00:00:00) - Introduction: Quinton Jay's Background and Journey
- 💡 (00:03:15) - Exciting Trends in the Beverage Alcohol Space
- 📦 (00:05:43) - Direct-to-Consumer Experiences
- 🔍 (00:07:36) - Leveraging Technology for Wine Industry Growth
- 📈 (00:13:50) - Success Factors in Wine Business
- 📦 (00:15:29) - Inventory Challenges
- 📌 (00:21:28) - Customer Retention Strategies
- 🛒 (00:26:40) - Evolution of E-commerce and Shopify in the Alcohol Industry
- 🛍️ (00:27:09) - Challenges of the Alcohol Industry and Why Shopify Is Chosen
- 📜 (00:28:52) - Complexity of Alcohol Regulations, Taxation, and Shipping
- 🌐 (00:29:50) - Bringing Together the Best Minds in the Industry Through Platforms Like Shopify
- 🌐 (00:30:13) - Making It Easy for Winemakers and Sellers to Get Online
- 📉 (00:32:14) - Challenges for Small and Medium-Sized Companies
- 🍷 (00:33:01) - Favorite Wine
- 👋 (00:36:22) - Closing Remarks and Contact Information
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
Hey everyone, thank you for listening to the
drinkscom podcast the businessof online alcohol.
I'm your host, brandon Amoroso,and today I'm talking with
Quinton Jay, who's the founderand managing director of Baca's
(00:21):
Consulting Group, a veteran VCwho has run well-known wineries
and private equity funds.
Really excited to have you onwith your vast array of
background and expertise inbeverage alcohol space, quinton.
Awesome thanks, brandon.
So before we jump into some ofthe topics we want to cover here
, can you give everybody justthe quick background and, I
(00:42):
guess, tldr on yourself, yeah.
Speaker 2 (00:45):
I'm a consultant in the wine space and, with the
specialization in the ops andthe finance side, a little
background sort of, if you wantto call it my journey is.
I started it Bank of Americamany, many years ago.
I did commercial lending andthen moved into special assets.
That's when good loans go bad.
I did that for a couple years,so you kind of saw the life
(01:06):
cycle of loans and then, likeany good kid back in the day, we
used to go to business schoolor at least apply to business
school and get the best one thatyou possibly can and then go
for a couple years for yourmidlife, couple years of
studying and kind of coming backout.
Then I got picked up by theCoca-Cola company, and how that
(01:28):
kind of happened is I wanted tolearn about brands and one of
the best brand marketingcompanies in the world and then
I got.
That's how.
Then I got into the wineindustry, as I was picked up as
the general manager for BonnieDune Vineyards and so I worked
for Randall Graham for a whileand did that for a little bit
and then I started up myconsulting company.
(01:48):
Afterwards I was with RandallBuffer two years.
We used to call him Dune yearsand similar to Dog Years so in
your life and working, which iskind of fun.
But I learned a lot and so Ikind of applied some of those
skill sets I learned there andthen just worked with different
clients up and down the valleyEtude I worked at Etude, which
is one of the wineries, winebrands that actually kicked off
(02:10):
the whole sort of selling yourbrand to another company, be it
large or small.
So that was very, very, veryexciting to kind of be there and
then working at Bairinger Blastfor a while because they were
the acquiring company and howsort of small company gets
picked up by a super big companyand how you meld them together.
And then.
So then I went to go get one ofmy clients wanted to hire me
(02:32):
full time.
It was really hard to dobecause I really enjoyed
consulting and sort of theproblem solving but they made me
an offer I can refuse and I wasa general manager, president
for Arteza.
And then I got picked up by Isaid, did that for about four or
five, six years.
And then I got picked up by SamRothman whose family used to
own Seagrams.
They started a private equityfirm called Bacchus Capital
(02:53):
Management.
They just happened to have thesame name.
That Bacchus guy gets around,and then I did that for about
seven years and then I left andcontinued consulting and then I
kind of have different type ofclients.
By 80% of my client base isthere's a problem, right, that's
(03:13):
why people call us to help themsolve problems.
And the other ones are like hey, I'm doing pretty well, how do
I get better?
So, which is kind of nice.
Those are the fun ones.
Speaker 1 (03:21):
Well, you've obviously stuck in the industry
for some time, so why, like?
What makes the wine industry soexciting for you?
Speaker 2 (03:30):
Yeah, I think at Coca-Cola.
Speaker 1 (03:33):
I learned a lot.
Speaker 2 (03:35):
But the wine industry is focused.
The wine industry is focused onadult beverage.
You kind of know who and whatand there's just something
magical about wine.
I mean, you can have a cocktailby yourself, you can have a
beer by yourself.
Most likely you cannot have abottle of wine by yourself, at
least let's not.
So I think that's the peopleaspect that makes it so unique
(04:00):
and sort of special, if you wantto call it.
So.
That's why I kind of like itand I just think as a business I
think it's a kind of a veryintriguing, interesting,
difficult business to be in.
So I think that that's kind ofwhat's kept me around and kind
of kept my interest for so long.
Speaker 1 (04:17):
Oh yeah, I can appreciate that.
So, in terms of all of thevarious sort of areas that
you've been able to touch, giventhat experience and, more so,
wine generalist capabilities perse, which I think provides a
(04:38):
lot of context that you wouldn'tnecessarily get if you were
super deep in just one area ofthe wine industry, what are you
looking at or what are youexcited about going into next
year or the next three to fiveyears?
What are some of the thingsthat those listening should be
(04:58):
paying attention to, or in andaround the wine category, or
just beverage alcohol in general?
Speaker 2 (05:04):
Yeah, probably the most exciting thing for me is
that.
I mean one of the positives ifthere's such a word about it,
about COVID is that itaccelerated direct to consumer
in all the categories and iteven dragged kicking and
screaming, the wine industry orthe adult beverage industry into
that space.
(05:24):
Now you're having part of.
It is the share stomach thingthat people are going after.
We can talk a little bit moreabout that later, but I think
one of the things I'm reallyexcited about in learning is
that it's here to stay.
How do we connect deeper withconsumers?
How do we give them theexperience that we have in the
(05:46):
industry?
That is really difficultbecause of adult signature
required and sort of where doesthat responsibility lie?
I mean, one day I'm thinkingthat there might be a box that
comes to your door and there'soften there's a facial
recognition thing and only youcan open the box kind of like a
mission impossible thing, and Imean so those things excite me
(06:06):
is that I think that finally theindustry is starting to look up
and say, wow, how do I connectmore with these consumers?
Because I think initially,since all the business was
coming through the tasting room,after that experience, how do
you sort of keep that magicgoing?
So I think that that's part ofthe, but that's an onerous upon
the wine industry or thewineries to kind of keep that
(06:29):
going and sort of kind of keeptheir customers engaged.
So I think that that's probablyone of the things I'm really
excited about.
Speaker 1 (06:38):
And, given the other technological advancements or
limitations that the wineindustry has faced, it feels
like, at least over the lastcouple of years, there's been a
lot of progress and stridestowards giving the alcohol
industry the same tools andcapabilities that other
(07:00):
non-regulated industries have,whether it's the companies that
sell coffee or shoes online,like, why can't we use the same
things that they use?
And I feel like those otherindustries provide a well
obviously different, and wine isdifferent in various ways also
(07:22):
depending on price point and thetype of wine.
Because you're not buying yourtwo buck chuck D to C, and if
you are, then I don't know howyou're making those financials
work, but maybe there could be alimited edition, two buck chuck
, but correct.
And then you have the higherend stuff, for there's waiting
lists for years and years andyears, and so actually, what
(07:43):
I've, not to go off on acomplete tangent, but I find it
kind of interesting, those thathave that sort of power in the
market.
Yep, if I'm them, you know howdo I think about technology,
because I don't really need togrow or market it's.
I have a literally a waitinglist of 10 years.
Yeah, I protect that movingforward.
So you have, like theseopposite sides of the spectrum,
(08:06):
but I think your moretraditional verticals that don't
have these rules andregulations can provide a lot of
inspiration for for howwineries and how alcohol
companies can think aboutcreating.
You know, direct to direct toconsumer experiences, yeah.
Speaker 2 (08:21):
Yeah, yeah, definitely.
And you know, I think thatthere's this sort of this weird
sort of bell shaped curve, thatsort of happens.
Right, you're right.
There's these guys that havethe waiting list and they're
like dude, what do I need to?
You know, what, what, what,what, what do I need that brain
damage, right.
And then you have the two, likeyou're saying, the two bucks
check is kind of like I can'teven get them.
Dude, water is more expensive,right, in some cases, right.
And I mean, and you're like,okay, I get that, right, we're
(08:43):
not shipping the liquid, right.
But I think that there's a largesort of middle ground for, you
know, for brands that aren'tanointed, right, that still need
to sort of like engage withcustomers, post, right.
And I mean like I'll go to awinery and I, you know, I'll go,
I'll go mystery shop.
Every so often I'll walk in awinery and I'll be like I'll go
to friends and I'll be like I'lltell them I go, hey, I'm in.
(09:05):
Tell them I'm in local areanetworks, I'm a, I'm a computer
guy, right.
And I mean, don't tell them thewine business, and just kind of
see what happens, right, andyou kind of see how some are
really good, right, they'll,they'll get back to you, they'll
send you an email.
Hey, we had a great timevisiting you, quinton.
Blah, blah, blah, Love to haveyou.
You know, and you kind of watchthat progression, but still
(09:25):
they're not.
A lot of them are doing SMS,right.
There aren't sort of engagingthere, sort of their customers
that way, or even the experiencethat that you know, in the way
that they get wine, right.
You know what I mean.
Something as crazy as, like, wedon't ship during the summer.
Well, okay, man, right, youknow what I mean, but maybe
there's a way to do it right.
And then people talk about gelpacks and blah, blah, blah.
But there, you know, there'stechnology out there saying,
(09:45):
okay, well, it's going to be.
You know, maybe Phoenix wouldhave been difficult for like 110
days, you know, 54 days of over100 degree weather.
But you know most places youprobably could get there, but
maybe.
But but I think it's also theway that we are set up that the
product needs to go from theeast west coast all the way to
the east coast, and there's alot of ground in the middle.
So you know, but I thinkthere's different people doing
(10:08):
different cool things, like youknow, forward, forward, forward
forward shipping to an area andthen from there then it goes,
you know, I mean then thenyou're doing the last, last mile
and then that's not spendingseven days on the truck but
you're maybe only one day in thetruck and hopefully that's a
good day.
Speaker 1 (10:22):
So Right, yeah, I mean, having being here in
Florida, I've started to runinto some of those uh issues.
When it comes to getting winesent here it's it's not as easy
as it is in like the Midwest,yeah.
Speaker 2 (10:37):
Exactly, you know.
But maybe there's a way whereyou know someone partners in, I
think you know, like, forexample, fedex and UPS is those
guys are wanting to use theirlocations as be places where
people pick up.
So you know, granted, it is alittle bit more of a pain, right
, it's not to your door, but ifyou're into wine and you've
spent $40, $50, $100, all thebottle of wine, the last thing
you want is it to just kind ofsit on your doorstep, right, and
(10:59):
, you know, start cooking.
Speaker 1 (11:01):
So that's how I see that.
Yeah, I think there there'sbeen a lot of progress towards
um, you know, working aroundsome of the limitations and
you're you're seeing it withsuccesses of.
You know, like the, thebusiness you were formerly at
with Denegos.
You, you have others, um, like,I think, bev, recently being
(11:22):
acquired by um.
I want to say it was Gallo or oror or um, but you have, I would
say, more digitally nativebrands that are starting to
enter into the wine space, yep,and that's providing uh both
inspiration but also competitionfor your more traditional uh,
(11:44):
you know, california or Napawineries, where a lot of the uh
business and also the consumerrelationships are started and
end in the asyn room, um yeah,yeah, yeah, Like you know, like
there are other sort of likeonline, like you say, all the
data, uh, uh, you know digitallynative ones.
Speaker 2 (12:02):
I mean, I'm just amazed by them.
Sometimes it was like how manypeople are in your list and you
know, granted, you know theprice points are low, but hey,
listen, we need to bring peoplein this industry, you know, in,
you know into the wine biz,right, and some shape or form,
right, and if those wines, youknow, punch above their weight
for what they pay for, thenthey're going to keep on
drinking, right, and they'llkeep on having more wine with us
.
So, you know, but they, butthey're good at like getting
(12:22):
people and kind of, you know,getting new customers and sort
of bringing them in right.
And it's not sort of pretentiousand everything else.
So I, so I definitely those are.
Those are the things that I'mthat, that, that, that, that
that make me think and kind ofgo hmm, and then you look at the
, the leadership team, you'relike there's not even a wine guy
here, but maybe that's how wesolve this right.
And I mean is that they takeindustry things from other
(12:43):
industries right, Be itmattresses or whatever.
I saw that you had, um, uh, theguy from Breitsellers on right
and I just kind of look at hisbackground and I've been like
wow, he's super smart, right,and I mean, and so we need more
people like that, right, um,that are pushing the envelope
and kind of bringing that onboard, so yeah.
Speaker 1 (12:58):
I think there's more outsiders that are entering into
the industry um which is a goodthing, because, yeah, and it's
not just alcohol either, there'sbeen some other.
You know, like I had a.
I had an internship in the, inthe paper industry, in like high
school, and everybody who was,everybody who was there, had
been there for like 35 years andthere was just no like you just
(13:20):
sort of did things the way thatyou did them because that's how
you always did them, and whywould you change when you know
there's not really any reason tochange?
Correct, yeah, getting somefresh, new blood into the, uh,
the industry, uh, we'll have its.
You know hurdles and road bumps, but I think it's going to be
Better off for the long run,because you have people Like Joe
entering being like, why thehell do you do some of these
(13:41):
things?
Speaker 2 (13:42):
the way that you're doing them Like this makes no
sense and that leads to changeand, ultimately, a better
experience for the, thecustomers.
Speaker 1 (13:48):
Yep.
Speaker 2 (13:49):
The, the, the, the, the, the, as I jokingly say.
They'll drag us, they'll,they'll bring us knuckle
draggers along.
Speaker 1 (13:55):
So so, um, you know, jumping off of that and and the
knuckle draggers, what does makea successful wine business in
your Opinion?
Especially in in 2023, is it'sa lot?
Different than you know, asuccessful one, even five years
ago.
Speaker 2 (14:15):
Yeah, you know, I think that the things that make
wine business successful, Ithink there are probably two
things.
One is you know, you know, atthe end of the day, it doesn't
matter if it's wine or widgets,it's still a business, right?
So I think, as you know, as awinery, or as a brand owner, or
as a, you know, founder of awinery, I think kind of knowing
sort of what you're good at andwhat you're not good at is
important, what your weaknessesare.
(14:35):
Right, it's a.
It's a really tough business,right, the wine industry, as I
jokingly say, you know, you know, I've coined a term that I'm
going to trademark.
It's called napaganistan.
Right, it looks easy from theoutside, you know, and I'm like,
hey, I made a lot of money orwhatever in another industry.
I want to buy vineyard or Iwant to start a wine brand, and
(14:57):
you know it's a.
It's a tough business.
Because, you know, when youreally think about it, it's
almost five businesses in oneyou have one is that if you're
growing grapes, you're doingviticulture.
So, you know, you're spinning aplate here, right, and you have
to make good grapes, and thenall of a sudden you're in this
other thing called manufacturing.
Oh, wine making, that's whatit's called and then your
manufacturing wine.
You're making wine, right, andyou got to make good wine off of
good grapes.
(15:17):
Then, all of a sudden, afteryou make it, then you got to
sell it.
And you know, depending on whatyou're, you know route to
market, as be it direct toconsumer or wholesale, you know.
So that's another two separatebusinesses, right, and you know,
then it's just business ingeneral, just kind of business
acumen about running a entirebusiness.
So you know, all these platesneed to spin at the right RPMs.
(15:39):
If one is off, it actuallyimpacts the other one, right?
If you're not selling enough,but you're bringing in too many
grapes, right, and then you'rebringing it in, and then all of
a sudden you're using up yourcash and you're like, why do I
feel so poor?
Well, you have a couple milliondollars in a bit, or do you
feel better?
You know, I'd like to have moremoney, right, and I mean so.
So I think, so I think it's,you know, one of the things is
definitely kind of knowing sortof what you're good at, and then
(16:02):
sort of building a team aroundyou, right?
So I think that that's probablyfirst and foremost.
The second would be, you know,building a plan.
I, you know.
You know, the one of the thingsthat I like doing that I learned
from my experience at theCoca-Cola company was, you know,
I hear all the time from fromwineries or people in the winery
oh, you can't predict things.
I go, I get it right, you'renot gonna beat Mother Nature,
(16:23):
but you can predict how manygrapes are you gonna be bringing
in?
Right, you sign the contract,right, or you own the vineyard?
Right, you can.
There's a range.
Sure, it can be zero, maybelike a 2020 or something like
that, but other than a blackswan year, you're bringing in
something, right?
You know how much that you'reselling, right?
So if you know how to model it,then you can start looking at
your business and then startUnderstanding number one, your
(16:46):
cost.
Right, because people are reallybad about that in the wine
business, because Understandingyour cost is difficult because
you have two vintages Normallyin your seller and then you have
to allocate cost to thosethings.
So most people don't even knowwhat their cost is until they
get to the end, which is crazyin my view.
Right, I know how much corksare.
I know how much my labels are,so I think those are the two
sort of main things is then, andthen you have sort of a plan of
(17:09):
sort of where you want to go,and then in the interim then
you're just sort of updating, asit's kind of you know what XYZ
skew is actually not selling sofast, oh man, what does that
mean?
Well, how many grips are webringing in?
Okay, let's, you know, you know, you know, let's dial it back a
little bit.
Or if we can't, boy, we betterstart kicking it up and
understanding sort of what theimpact of that is.
Speaker 1 (17:28):
So probably those two things, I think, are sort of
bigger understanding of whatmakes a wine business sort of
successful the inventory, youknow position is sizable for a
lot of these companies and it'snot something that I necessarily
thought about before, comingfrom, you know, a services
background, never had to dealwith inventory or anything like
(17:49):
that, but diving into it overthe past 12 months and
understanding the financialconstraints that these companies
are trying to work around, eventhough they can literally be
sitting on you know millions, ifnot tens of millions, of
dollars of inventory you got tosell through that Yep, and so
that presents its own host ofunique challenges, especially
(18:12):
depending on the on the brand.
You know, not everything ismeant to sit in a cellar for 20,
30 years totally right andMaking sure that you you get
through that product before itit goes bad yeah really
important, yeah.
Speaker 2 (18:29):
And then you have bulk wine right.
So you got the stuff that's inthe bottle right.
But then you got stuff that'sin bulk right.
And then you have these grapesthat keep on growing.
You just can't turn off thegrapes, right, you know mean.
So you know that you can.
You can start, come you know,compounding your inventory
depending on and I useinventories an overall piece
right, both bulk and, and youknow, and finish goods and it
(18:50):
can.
You know you can be a couple ofintegers behind and blink of an
eye You're like wow, we got tostart liquidating or moving,
moving stuff out.
Speaker 1 (18:58):
Yeah, no, I'm not envious of those problems at all
, but how many?
Back to the, the, the wineryside, because we talk a lot
about the more digitally nativeBrands, or you know more so
online marketers like brightsellers or or a wink, or even
yeah, I'm sorry yeah there's theactual wineries themselves, the
(19:19):
producers, and I think theyactually have a relatively
unique Especially with therising cost of customer
acquisition.
Yeah, they have uniqueopportunity to be able to have
that in taste or in persontasting room experience.
Yeah, translate that to youknow, a longer life with the
customer yeah, but when I wentto Napa and Was that back in
(19:42):
like June, yeah, you know thatexperience that you get in
person, yeah, go to the samewineries website and you're like
what just happened?
Like there's nothing.
Everything that you told me inthe tasting room, all the really
cool things that you do thehistory, like all this awesome
stuff you go to the website andyou're like what the hell just
(20:02):
happened?
There is none of that on thissite.
So like, of course, nobody'sgonna buy from you via that
website if they're seeing it forthe first time.
Like, yeah, you're just acommodity at that point, it's
just a, it's just a product.
You're not Putting in any ofthe unique sort of storytelling
components that you have in thetasting room.
Yeah, and then the second thingthat I thought was was a miss
(20:22):
for a lot of them was the lackof, you know, automated
follow-ups, automatedcommunications, like all the
stuff that can happen thereafter.
Once I do have that first visitbecause you know they get you in
the tasting room, you're,you're feeling pretty good.
After you have three glasses ofwine, I'm like, oh yeah, like
I'd love to buy Whateverproducts you put in front of me
(20:45):
You're so nice, whatever and youknow that leads to one thing,
leads to another and you'regoing home with like 300, 400
dollars of wine and some otherlike little gizmos and widgets
and whatnot.
But yeah, I mean I haven'tbought from a single one of
those wineries again because,yeah, I haven't really even
heard from them and and I thinkyou know that is a really big
opportunity for them that thepurely digital players don't
(21:07):
have where you can curate thatRelationship in person and then
have that lead to, you know, anongoing club or have that lead
to some sort of recurringpurchase behavior from From
people, when you know going toNapa isn't a once and once a
year, twice a year thing, forfor those outside of the
industry it's maybe a once everyten years or even a once in a
(21:27):
lifetime in some instances.
So, yeah, how do you keep thatcustomer for five years, for ten
years, when they're never gonnacome back to your location?
Speaker 2 (21:35):
Yeah, um, couldn't agree more, all those things.
I think the, the, the, the.
The issue is that there's adisconnect, right, the people in
the hope, in the, in thetasting room, are great at at,
at, um, you know, giving thatexperience, right, you know I
mean.
But then all of a sudden, whenyou leave, there's no one on the
(21:56):
other side to kind ofcontinuing that.
And it's usually like a wineclub manager at best, right, and
I mean that they have.
So you need to join the wineclub.
But there's a lot of peoplelike so, and my best example
Look, I have a couple examplesis when I was at our tessa now
this is many, many moons ago,right, and so.
But one of the things that wedid right is we took the wine
(22:17):
club on the road, right, and Iwas like, hey, invite a friend.
No one wants to go to a winewine event by themselves, right,
and we signed up a bunch ofwine club members that way,
right, and I mean I was likedude, it's just like Tupperware
in a way.
Right, bring a friend and bringa body.
You know, and I see you know,you're, you know, you know the
guys liken the.
You know the experience thatthey're having and their taste
in the wine and the kind ofhearing it.
(22:38):
So I think that's that's a bigpiece.
I think that you know, and it'sunfortunate, right, and I mean
you know, for the wine industryis is how do they bring that
experience there?
And you know, like, for example, one of the things I was
looking at a long time ago it'sprobably before its time was
using VR.
Right, I mean, you know.
You know, if you have put onthe headset, right, let's say,
one day when Apple gets, getsthat one out, maybe there'll be
(23:00):
more.
You know, you know, you knowadoption, but in the interim,
you know, why don't you take adrone and fly around your
vineyard?
Right, if you own a wine or avineyard, shame on you if you're
not Giving someone thatexperience of walking through
the door and sort of lookingaround them.
People can, you know, can kindof experience or remember that
(23:21):
experience, right, they're notconnecting back with the
consumer.
So you know this is back in,you know, the mid-2000s, right,
and I was working with thegentleman.
He had a business called Callfor Wine, mark Parton.
Right, the guy sold wine overthe phone.
Literally, I was blown away.
I was like who would pick upthe phone.
This is ridiculous, and Ilistened to the calls, right,
(23:43):
and people like, oh my god, bob,oh Bob, we had such a great
time in Napa, that was the bestthing.
And they go through their spiel, right, and like, hey, you know
what I mean and it's amazing,right.
So you know, I think there's somany touch points that a lot of
wineries don't don't do,primarily because there's no
handoff.
But now, with technology, it'shere, right, and I mean where
(24:07):
you can sort of like touch them,you know email, sms, whatever.
And then you layer back in thathuman piece, because I think
you know, really, ask me why Ilove the wine industry is
because it's still reallyhuman-based.
People are interacting witheach other, right.
So.
But it's kind of, how do webridge that piece over there to
get over there, so where it'slike when they do go back home,
(24:28):
they're in, they're in Chicago,it's winter, and they're in
their cubicle, or used to be intheir cubicle or offices.
They remember sitting in theNapa Valley and having a nice
glass of wine, right, and I meanthere's just nothing and you
know nothing but good feelings.
So how do you sort of bringthose pieces back in.
So I think but I think there'sthere's not been a lot of focus
(24:48):
of either bringing thattechnology in or them wanting to
get it Right.
So I think that's where we needto sort of bridge that gap a
little bit.
But I think that the, the, thewineries that do do well right.
Speaker 1 (25:01):
So yeah, and tapping into that social component which
is unique to wine and beveragealcohol in a way that most other
product categories don't have,correct.
I don't.
You have like communities thatare created around some
verticals, but not in the sameway that you have Real, like
(25:24):
human interaction with peopleover a bottle of wine or over a
glass of scotch or whatever.
Yeah, bourbon, bourbon orwhatever crazy.
And that's the unique thing tome about Alcohol is that that is
so neatly tied together, likeyou could have a thousand dollar
bottle of wine but you're withcrappy company and you know it
(25:46):
doesn't really matter.
You could have a ten dollarbottle of wine, but you're with
you know people who you careabout or you're having a good
time or whatever, and you'relike you know, this is actually
better than that thousand dollarbottle wine.
Totally, yeah, exactly, exactly.
I don't remember the nightsthat you you drink alone.
Yes, you probably shouldn'thave as many of those anyways,
so Uh, I'm with you on that.
Speaker 2 (26:06):
So drink responsibly, everybody, because I would say
exactly that can be the, thetagline for this episode.
Speaker 1 (26:14):
Well, no, that, that that's all.
That's all really fascinatingto me.
I have, um, I have a couple offun questions for you.
Um, yeah, but before I get tothose two fun questions, um,
given how sort of close you wereto Ecommerce and specifically
Shopify over the last, you know,two and a half, three years,
(26:37):
what like, how, what, what doesthat evolution been like?
Because you know, you were sortof early adopters of that
platform and solution when itcomes to, yeah, alcohol, but
obviously there's been a lot ofinvestment into it over the last
year, year and a half.
Um, yep, like, why Shopify, whye-commerce?
What are, what were you able todo that you weren't necessarily
able to?
(26:58):
Uh, with other solutions thatare out there?
Because I think this goestowards the, the talk track that
I'm Really fascinated with,which is and it's not just
alcohol either.
There's some other industrieslike this as well, but those
that are regulated or a littlebit more antiquated will have A
bunch of products that arecreated, you know, just for them
.
So you have, like, sms Just foralcohol.
(27:21):
You have e-con platforms, justfor alcohol you have, I don't
know, uh, name your solution.
It's basically what you knowthe big boys are doing, like
Shopify or cladio or whatever itmay be, but it's tailored and
tweaked just a little bit to bevery unique and specific to that
particular category, which I'mobviously biased.
(27:43):
But I think that is a losinggame in the long run because you
have a defined TAM and you canonly Invest so much and you can
only grow so much, like younever will be able to have 4500
or 5000 engineers like Shopifyhas, because you're only
servicing one category.
So, yeah, talk me through whatthat, what that looked like and
(28:04):
and how that was adifferentiator for you and being
able to make To negotiate assuccessful as it has been.
Speaker 2 (28:09):
Yeah, I, you know, I think there's probably two
pieces of that right.
One is, you know, the First andforemost, like you were saying.
I mean, how do you get like Alot of the solutions that are,
that are out there, are actuallykind of quasi homegrown For
lack of better word and have alltheir limitations, that you get
all the bugs and all that otherstuff that kind of comes along
(28:30):
with it, right, and they're onlyas big as the two or three man
development team that someoneprobably outsourced somewhere
else, right?
I think one of the things thatShopify brought to the table was
just that, that, that power andthe ease so I'll talk about the
ease in a moment, but just kindof the power of just being able
to look at a very complex sortof industry.
(28:52):
Right, you have 50 states.
That's literally like sellingto 50 different countries.
No different, right you must,was shipping it to Mexico is the
same as, maybe not as bad as,texas, but still there's
different rules and differentlaws, right, you know what I
mean, and you have to abide bythose.
Then, then you have the issueabout taxation, right, you know
what I mean which is bringdamage within it.
(29:13):
The states really care about isthe money, exactly Right, and I
mean, and they will come afteryou, right, if you ship, not
without a permit, if you don'tship, you know all these things
right, and if you don't havethose things buttoned up, they
can come back to you.
Right, and understanding thingslike Nexus and you know all
these different pieces rightthat you got to do it.
I'm just a winemaker man, youknow what I mean.
I'm just trying to sell alittle bit of wine, right, you
(29:34):
know what I mean.
And so having these solutionstrying to prethought out in a
larger organization like aShopify et cetera, as a platform
kind of brings some of the bestminds together into it.
Right, to solve this problem.
Right, it's not just one personor one company doing it, it's
multiple companies doing it atthe same time and I think that's
why they've taken the lead onsort of like understanding and
(29:57):
sort of providing the platformplatform for everybody.
The second part is the ease.
Right, you have to rememberthat these are winemakers, right
, and the guys at home right,you know what I mean.
And maybe he's no differentthan the Etsy guy, etsy person,
right, you know what I mean thatwants to sell something.
Right, I got a product, I gotto get it online.
How do I do that?
Right, and I think that theymake it easy enough for people
(30:18):
to kind of get on there, right,and that's what's bringing in
the critical mass, right.
And then the people are able toyou know, sell what they sell
and you know and how they do it.
So I probably would say it'sthose, you know, it's those two
things, and then you later onsort of other software that you
can just plug in like oh, thisis the taxing thing, okay, good,
I'd like that.
You know what I mean.
(30:39):
So put that guy on right.
Oh, I'd like to do, you know.
You know integrated marketing.
You know emails with AB testingor whatever.
You know what I mean.
So they're bringing on all thesepieces and all of a sudden you
have a platform that makes youlook and feel a lot bigger, but
you have all the professionalthings behind it.
So that's probably why I, youknow, I would say that that's
(31:00):
was why we were able to ramp upso quickly, so fast.
Right Is because the platformwas there, we weren't dealing
with all the buggy things and wecould focus in on the business
instead of trying to spend allof our time.
You know, oh my God, why didthe software not work?
You know, why can't thiscustomer get this Right?
And I mean, and there wasalways somebody there to kind of
help out.
So I think that that allows themakers, whoever whatever they
(31:23):
make, do what they do.
And then you, you know, youknow, have the technology and,
like I said, it doesn't matterif it's wine or widgets.
Speaker 1 (31:31):
Yeah, you basically have three you know, separate,
very distinct business functions.
In a, in an alcohol brand, youhave the producer, which they've
pretty much got that allcovered.
But then you have marketing andthen you have like legal
regulatory tax, and you knowthose are the two you have with
marketing, and then the legalregulatory and tax.
(31:52):
That gets overlooked far toooften, I think.
But then that is thedifferentiation factor between
those that are very successfuland those that aren't.
It's not enough to just be agrower or producer.
Even if your wine is great,there's like a lot of great wine
out there.
There's a lot of great, youknow, booze.
There's a lot of great beer.
You have to invest in all threeof those different areas in
(32:13):
order to be successful.
Speaker 2 (32:14):
Yeah, and if you're a small company or medium sized
company, where do you have thefunds to do that Right?
I mean, the margins are prettytight as they are, you know what
I mean.
And on an EBITDA aspect, andnot everyone's willing to invest
all that money, so I guess it'sa larger number of people
coming together, so which isgood.
Speaker 1 (32:31):
Well, my fun question for you what is your favorite
wine memory?
Speaker 2 (32:39):
In 2007,.
I had a little time off, in agood way, and I have a friend of
mine who owns a winery inSanseir and you know how
everyone's like oh, come visitthe winery, come visit me and
everything else, and his name isJean Laurent Vacheron and I had
a little.
I had about two months off andI was like it's the summer and I
(33:02):
was single and I was like youknow what?
I'm just going to go to France.
I just called them up and Isaid, hey, it's Quentin, he goes
.
Speaker 1 (33:08):
Hey, quentin, how are you and I was like great I got
a little time.
Speaker 2 (33:11):
I'm thinking about coming over to Sanseir Can I
stay for a month I was reallyonly thinking for a month and
maybe travel around Europe alittle bit.
And I was spending about twomonths there and you know I just
loved it.
I mean I'm a huge fan ofSanseir's, you know then, and
just even more now, just kind oflike the geology and the
history and just it was just fun, right.
I mean I've really got a chanceto kind of see the wine
(33:32):
business from the ground up,from the vines and where they
make the wine and everythingelse.
So that's probably one of mymost fun memories in
professional and personal for alifetime.
And Jean Laurent and I havebecome really good friends too.
Speaker 1 (33:43):
So which is great.
That's awesome, and his name isalso totally awesome, like.
I wish I had a name thatsounded that cool.
I know Jean Laurent Vacheron.
Yeah, that's going to be hardto beat, hard to beat.
And then last question yeah, ifyou had to pick one bottle,
what would it be?
(34:03):
And then who would you besharing it with?
Speaker 2 (34:08):
Hmm, the bottle goes back to Vacheron.
There's a, there's a, there's alabel that they, there's a
bottling that they have calledLa Romaine and it is a
particular piece of ground in intheir estate and I jokingly say
that it's like, it's likechewing on rocks, but I know
that's not a good marketingdescriptor, but it's amazing,
(34:28):
right, the limestone and justthe chalk that's there right in
the flint that you get.
It's, it's amazing.
So definitely would be thatbottle of wine.
And yeah, you know my, you knowmy dad passed away several years
ago.
I'd love to share, if I, if Icould pick anyone in the world,
probably be him, because he wasreally big in a wine and kind of
(34:50):
helped me, you know, with mywine sort of journey.
I mean, he wasn't, he had alittle collection, he had really
good stuff, right, he onlybought the best, right, you know
I mean not a lot of it, right,you know I mean but, but but he
did have a few bottles that hereally cherished and depends on
whose birthday it was that.
Which bottle came out?
Cousin, maybe a little lower,mine a little better, you know
so that's how we did it.
Speaker 1 (35:10):
That way, there's a, there's a pecking order, for
sure, in terms of who got what,why Exactly right.
Speaker 2 (35:16):
So I think the same thing.
Speaker 1 (35:17):
I mean, I'm literally anytime I'm going to dinner, I
have people visiting and there'sthere's a pecking order, but
also there's a level of doesthis person actually even really
care or like what's?
The appreciation level going tobe there, yes they don't have
to have a lot of experience.
They could have more.
No experience, but, yeah, adesire to learn or anything like
that.
(35:37):
I mean, that's how I got superinto it.
Was, you know, other peopletaking an interest in me,
expanding my palette, and but Ihad the desire and I had the the
, the, the want, I guess, tolearn, yeah, whereas you know
some people, it's, you know,white claw, you know happy dad,
or maybe you guys are gettingthe free shit.
Speaker 2 (35:59):
Exactly, I'm breaking out the seller for you, Exactly
exactly Because it just wasnone of just me being drinking
by myself, so why, right, right?
Speaker 1 (36:07):
And in that case I'm just going to hang out with my
dog on the couch.
So yeah, exactly.
Most definitely Well, thank youso much for joining us.
If people want to get incontact or in touch with you,
what would be the best way to doso?
Online?
Speaker 2 (36:22):
Online is.
My email is QJAY at Bacchus,and that's about
B-A-C-C-H-U-S-C-G dot com.
Speaker 1 (36:32):
Okay, awesome.
We'll make sure to include thatin the show notes here, yeah,
but thank you again for comingon and for everybody listening.
As always, this is BrandonAmoroso.
You can find me at drinkscomand we will see you on the next
episode.
Hey everyone, thank you for listening to the
drinkscom podcast the businessof online alcohol.
I'm your host, brandon Amoroso,and today I'm talking with
Quinton Jay, who's the founderand managing director of Baca's
(00:21):
Consulting Group, a veteran VCwho has run well-known wineries
and private equity funds.
Really excited to have you onwith your vast array of
background and expertise inbeverage alcohol space, quinton.
Awesome thanks, brandon.
So before we jump into some ofthe topics we want to cover here
, can you give everybody justthe quick background and, I
(00:42):
guess, tldr on yourself, yeah.
Speaker 2 (00:45):
I'm a consultant in the wine space and, with the
specialization in the ops andthe finance side, a little
background sort of, if you wantto call it my journey is.
I started it Bank of Americamany, many years ago.
I did commercial lending andthen moved into special assets.
That's when good loans go bad.
I did that for a couple years,so you kind of saw the life
(01:06):
cycle of loans and then, likeany good kid back in the day, we
used to go to business schoolor at least apply to business
school and get the best one thatyou possibly can and then go
for a couple years for yourmidlife, couple years of
studying and kind of coming backout.
Then I got picked up by theCoca-Cola company, and how that
(01:28):
kind of happened is I wanted tolearn about brands and one of
the best brand marketingcompanies in the world and then
I got.
That's how.
Then I got into the wineindustry, as I was picked up as
the general manager for BonnieDune Vineyards and so I worked
for Randall Graham for a whileand did that for a little bit
and then I started up myconsulting company.
(01:48):
Afterwards I was with RandallBuffer two years.
We used to call him Dune yearsand similar to Dog Years so in
your life and working, which iskind of fun.
But I learned a lot and so Ikind of applied some of those
skill sets I learned there andthen just worked with different
clients up and down the valleyEtude I worked at Etude, which
is one of the wineries, winebrands that actually kicked off
(02:10):
the whole sort of selling yourbrand to another company, be it
large or small.
So that was very, very, veryexciting to kind of be there and
then working at Bairinger Blastfor a while because they were
the acquiring company and howsort of small company gets
picked up by a super big companyand how you meld them together.
And then.
So then I went to go get one ofmy clients wanted to hire me
(02:32):
full time.
It was really hard to dobecause I really enjoyed
consulting and sort of theproblem solving but they made me
an offer I can refuse and I wasa general manager, president
for Arteza.
And then I got picked up by Isaid, did that for about four or
five, six years.
And then I got picked up by SamRothman whose family used to
own Seagrams.
They started a private equityfirm called Bacchus Capital
(02:53):
Management.
They just happened to have thesame name.
That Bacchus guy gets around,and then I did that for about
seven years and then I left andcontinued consulting and then I
kind of have different type ofclients.
By 80% of my client base isthere's a problem, right, that's
(03:13):
why people call us to help themsolve problems.
And the other ones are like hey, I'm doing pretty well, how do
I get better?
So, which is kind of nice.
Those are the fun ones.
Speaker 1 (03:21):
Well, you've obviously stuck in the industry
for some time, so why, like?
What makes the wine industry soexciting for you?
Speaker 2 (03:30):
Yeah, I think at Coca-Cola.
Speaker 1 (03:33):
I learned a lot.
Speaker 2 (03:35):
But the wine industry is focused.
The wine industry is focused onadult beverage.
You kind of know who and whatand there's just something
magical about wine.
I mean, you can have a cocktailby yourself, you can have a
beer by yourself.
Most likely you cannot have abottle of wine by yourself, at
least let's not.
So I think that's the peopleaspect that makes it so unique
(04:00):
and sort of special, if you wantto call it.
So.
That's why I kind of like itand I just think as a business I
think it's a kind of a veryintriguing, interesting,
difficult business to be in.
So I think that that's kind ofwhat's kept me around and kind
of kept my interest for so long.
Speaker 1 (04:17):
Oh yeah, I can appreciate that.
So, in terms of all of thevarious sort of areas that
you've been able to touch, giventhat experience and, more so,
wine generalist capabilities perse, which I think provides a
(04:38):
lot of context that you wouldn'tnecessarily get if you were
super deep in just one area ofthe wine industry, what are you
looking at or what are youexcited about going into next
year or the next three to fiveyears?
What are some of the thingsthat those listening should be
(04:58):
paying attention to, or in andaround the wine category, or
just beverage alcohol in general?
Speaker 2 (05:04):
Yeah, probably the most exciting thing for me is
that.
I mean one of the positives ifthere's such a word about it,
about COVID is that itaccelerated direct to consumer
in all the categories and iteven dragged kicking and
screaming, the wine industry orthe adult beverage industry into
that space.
(05:24):
Now you're having part of.
It is the share stomach thingthat people are going after.
We can talk a little bit moreabout that later, but I think
one of the things I'm reallyexcited about in learning is
that it's here to stay.
How do we connect deeper withconsumers?
How do we give them theexperience that we have in the
(05:46):
industry?
That is really difficultbecause of adult signature
required and sort of where doesthat responsibility lie?
I mean, one day I'm thinkingthat there might be a box that
comes to your door and there'soften there's a facial
recognition thing and only youcan open the box kind of like a
mission impossible thing, and Imean so those things excite me
(06:06):
is that I think that finally theindustry is starting to look up
and say, wow, how do I connectmore with these consumers?
Because I think initially,since all the business was
coming through the tasting room,after that experience, how do
you sort of keep that magicgoing?
So I think that that's part ofthe, but that's an onerous upon
the wine industry or thewineries to kind of keep that
(06:29):
going and sort of kind of keeptheir customers engaged.
So I think that that's probablyone of the things I'm really
excited about.
Speaker 1 (06:38):
And, given the other technological advancements or
limitations that the wineindustry has faced, it feels
like, at least over the lastcouple of years, there's been a
lot of progress and stridestowards giving the alcohol
industry the same tools andcapabilities that other
(07:00):
non-regulated industries have,whether it's the companies that
sell coffee or shoes online,like, why can't we use the same
things that they use?
And I feel like those otherindustries provide a well
obviously different, and wine isdifferent in various ways also
(07:22):
depending on price point and thetype of wine.
Because you're not buying yourtwo buck chuck D to C, and if
you are, then I don't know howyou're making those financials
work, but maybe there could be alimited edition, two buck chuck
, but correct.
And then you have the higherend stuff, for there's waiting
lists for years and years andyears, and so actually, what
(07:43):
I've, not to go off on acomplete tangent, but I find it
kind of interesting, those thathave that sort of power in the
market.
Yep, if I'm them, you know howdo I think about technology,
because I don't really need togrow or market it's.
I have a literally a waitinglist of 10 years.
Yeah, I protect that movingforward.
So you have, like theseopposite sides of the spectrum,
(08:06):
but I think your moretraditional verticals that don't
have these rules andregulations can provide a lot of
inspiration for for howwineries and how alcohol
companies can think aboutcreating.
You know, direct to direct toconsumer experiences, yeah.
Speaker 2 (08:21):
Yeah, yeah, definitely.
And you know, I think thatthere's this sort of this weird
sort of bell shaped curve, thatsort of happens.
Right, you're right.
There's these guys that havethe waiting list and they're
like dude, what do I need to?
You know, what, what, what,what, what do I need that brain
damage, right.
And then you have the two, likeyou're saying, the two bucks
check is kind of like I can'teven get them.
Dude, water is more expensive,right, in some cases, right.
And I mean, and you're like,okay, I get that, right, we're
(08:43):
not shipping the liquid, right.
But I think that there's a largesort of middle ground for, you
know, for brands that aren'tanointed, right, that still need
to sort of like engage withcustomers, post, right.
And I mean like I'll go to awinery and I, you know, I'll go,
I'll go mystery shop.
Every so often I'll walk in awinery and I'll be like I'll go
to friends and I'll be like I'lltell them I go, hey, I'm in.
(09:05):
Tell them I'm in local areanetworks, I'm a, I'm a computer
guy, right.
And I mean, don't tell them thewine business, and just kind of
see what happens, right, andyou kind of see how some are
really good, right, they'll,they'll get back to you, they'll
send you an email.
Hey, we had a great timevisiting you, quinton.
Blah, blah, blah, Love to haveyou.
You know, and you kind of watchthat progression, but still
(09:25):
they're not.
A lot of them are doing SMS,right.
There aren't sort of engagingthere, sort of their customers
that way, or even the experiencethat that you know, in the way
that they get wine, right.
You know what I mean.
Something as crazy as, like, wedon't ship during the summer.
Well, okay, man, right, youknow what I mean, but maybe
there's a way to do it right.
And then people talk about gelpacks and blah, blah, blah.
But there, you know, there'stechnology out there saying,
(09:45):
okay, well, it's going to be.
You know, maybe Phoenix wouldhave been difficult for like 110
days, you know, 54 days of over100 degree weather.
But you know most places youprobably could get there, but
maybe.
But but I think it's also theway that we are set up that the
product needs to go from theeast west coast all the way to
the east coast, and there's alot of ground in the middle.
So you know, but I thinkthere's different people doing
(10:08):
different cool things, like youknow, forward, forward, forward
forward shipping to an area andthen from there then it goes,
you know, I mean then thenyou're doing the last, last mile
and then that's not spendingseven days on the truck but
you're maybe only one day in thetruck and hopefully that's a
good day.
Speaker 1 (10:22):
So Right, yeah, I mean, having being here in
Florida, I've started to runinto some of those uh issues.
When it comes to getting winesent here it's it's not as easy
as it is in like the Midwest,yeah.
Speaker 2 (10:37):
Exactly, you know.
But maybe there's a way whereyou know someone partners in, I
think you know, like, forexample, fedex and UPS is those
guys are wanting to use theirlocations as be places where
people pick up.
So you know, granted, it is alittle bit more of a pain, right
, it's not to your door, but ifyou're into wine and you've
spent $40, $50, $100, all thebottle of wine, the last thing
you want is it to just kind ofsit on your doorstep, right, and
(10:59):
, you know, start cooking.
Speaker 1 (11:01):
So that's how I see that.
Yeah, I think there there'sbeen a lot of progress towards
um, you know, working aroundsome of the limitations and
you're you're seeing it withsuccesses of.
You know, like the, thebusiness you were formerly at
with Denegos.
You, you have others, um, like,I think, bev, recently being
(11:22):
acquired by um.
I want to say it was Gallo or oror or um, but you have, I would
say, more digitally nativebrands that are starting to
enter into the wine space, yep,and that's providing uh both
inspiration but also competitionfor your more traditional uh,
(11:44):
you know, california or Napawineries, where a lot of the uh
business and also the consumerrelationships are started and
end in the asyn room, um yeah,yeah, yeah, Like you know, like
there are other sort of likeonline, like you say, all the
data, uh, uh, you know digitallynative ones.
Speaker 2 (12:02):
I mean, I'm just amazed by them.
Sometimes it was like how manypeople are in your list and you
know, granted, you know theprice points are low, but hey,
listen, we need to bring peoplein this industry, you know, in,
you know into the wine biz,right, and some shape or form,
right, and if those wines, youknow, punch above their weight
for what they pay for, thenthey're going to keep on
drinking, right, and they'llkeep on having more wine with us
.
So, you know, but they, butthey're good at like getting
(12:22):
people and kind of, you know,getting new customers and sort
of bringing them in right.
And it's not sort of pretentiousand everything else.
So I, so I definitely those are.
Those are the things that I'mthat, that, that, that, that
that make me think and kind ofgo hmm, and then you look at the
, the leadership team, you'relike there's not even a wine guy
here, but maybe that's how wesolve this right.
And I mean is that they takeindustry things from other
(12:43):
industries right, Be itmattresses or whatever.
I saw that you had, um, uh, theguy from Breitsellers on right
and I just kind of look at hisbackground and I've been like
wow, he's super smart, right,and I mean, and so we need more
people like that, right, um,that are pushing the envelope
and kind of bringing that onboard, so yeah.
Speaker 1 (12:58):
I think there's more outsiders that are entering into
the industry um which is a goodthing, because, yeah, and it's
not just alcohol either, there'sbeen some other.
You know, like I had a.
I had an internship in the, inthe paper industry, in like high
school, and everybody who was,everybody who was there, had
been there for like 35 years andthere was just no like you just
(13:20):
sort of did things the way thatyou did them because that's how
you always did them, and whywould you change when you know
there's not really any reason tochange?
Correct, yeah, getting somefresh, new blood into the, uh,
the industry, uh, we'll have its.
You know hurdles and road bumps, but I think it's going to be
Better off for the long run,because you have people Like Joe
entering being like, why thehell do you do some of these
(13:41):
things?
Speaker 2 (13:42):
the way that you're doing them Like this makes no
sense and that leads to changeand, ultimately, a better
experience for the, thecustomers.
Speaker 1 (13:48):
Yep.
Speaker 2 (13:49):
The, the, the, the, the, the, as I jokingly say.
They'll drag us, they'll,they'll bring us knuckle
draggers along.
Speaker 1 (13:55):
So so, um, you know, jumping off of that and and the
knuckle draggers, what does makea successful wine business in
your Opinion?
Especially in in 2023, is it'sa lot?
Different than you know, asuccessful one, even five years
ago.
Speaker 2 (14:15):
Yeah, you know, I think that the things that make
wine business successful, Ithink there are probably two
things.
One is you know, you know, atthe end of the day, it doesn't
matter if it's wine or widgets,it's still a business, right?
So I think, as you know, as awinery, or as a brand owner, or
as a, you know, founder of awinery, I think kind of knowing
sort of what you're good at andwhat you're not good at is
important, what your weaknessesare.
(14:35):
Right, it's a.
It's a really tough business,right, the wine industry, as I
jokingly say, you know, you know, I've coined a term that I'm
going to trademark.
It's called napaganistan.
Right, it looks easy from theoutside, you know, and I'm like,
hey, I made a lot of money orwhatever in another industry.
I want to buy vineyard or Iwant to start a wine brand, and
(14:57):
you know it's a.
It's a tough business.
Because, you know, when youreally think about it, it's
almost five businesses in oneyou have one is that if you're
growing grapes, you're doingviticulture.
So, you know, you're spinning aplate here, right, and you have
to make good grapes, and thenall of a sudden you're in this
other thing called manufacturing.
Oh, wine making, that's whatit's called and then your
manufacturing wine.
You're making wine, right, andyou got to make good wine off of
good grapes.
(15:17):
Then, all of a sudden, afteryou make it, then you got to
sell it.
And you know, depending on whatyou're, you know route to
market, as be it direct toconsumer or wholesale, you know.
So that's another two separatebusinesses, right, and you know,
then it's just business ingeneral, just kind of business
acumen about running a entirebusiness.
So you know, all these platesneed to spin at the right RPMs.
(15:39):
If one is off, it actuallyimpacts the other one, right?
If you're not selling enough,but you're bringing in too many
grapes, right, and then you'rebringing it in, and then all of
a sudden you're using up yourcash and you're like, why do I
feel so poor?
Well, you have a couple milliondollars in a bit, or do you
feel better?
You know, I'd like to have moremoney, right, and I mean so.
So I think, so I think it's,you know, one of the things is
definitely kind of knowing sortof what you're good at, and then
(16:02):
sort of building a team aroundyou, right?
So I think that that's probablyfirst and foremost.
The second would be, you know,building a plan.
I, you know.
You know, the one of the thingsthat I like doing that I learned
from my experience at theCoca-Cola company was, you know,
I hear all the time from fromwineries or people in the winery
oh, you can't predict things.
I go, I get it right, you'renot gonna beat Mother Nature,
(16:23):
but you can predict how manygrapes are you gonna be bringing
in?
Right, you sign the contract,right, or you own the vineyard?
Right, you can.
There's a range.
Sure, it can be zero, maybelike a 2020 or something like
that, but other than a blackswan year, you're bringing in
something, right?
You know how much that you'reselling, right?
So if you know how to model it,then you can start looking at
your business and then startUnderstanding number one, your
(16:46):
cost.
Right, because people are reallybad about that in the wine
business, because Understandingyour cost is difficult because
you have two vintages Normallyin your seller and then you have
to allocate cost to thosethings.
So most people don't even knowwhat their cost is until they
get to the end, which is crazyin my view.
Right, I know how much corksare.
I know how much my labels are,so I think those are the two
sort of main things is then, andthen you have sort of a plan of
(17:09):
sort of where you want to go,and then in the interim then
you're just sort of updating, asit's kind of you know what XYZ
skew is actually not selling sofast, oh man, what does that
mean?
Well, how many grips are webringing in?
Okay, let's, you know, you know, you know, let's dial it back a
little bit.
Or if we can't, boy, we betterstart kicking it up and
understanding sort of what theimpact of that is.
Speaker 1 (17:28):
So probably those two things, I think, are sort of
bigger understanding of whatmakes a wine business sort of
successful the inventory, youknow position is sizable for a
lot of these companies and it'snot something that I necessarily
thought about before, comingfrom, you know, a services
background, never had to dealwith inventory or anything like
(17:49):
that, but diving into it overthe past 12 months and
understanding the financialconstraints that these companies
are trying to work around, eventhough they can literally be
sitting on you know millions, ifnot tens of millions, of
dollars of inventory you got tosell through that Yep, and so
that presents its own host ofunique challenges, especially
(18:12):
depending on the on the brand.
You know, not everything ismeant to sit in a cellar for 20,
30 years totally right andMaking sure that you you get
through that product before itit goes bad yeah really
important, yeah.
Speaker 2 (18:29):
And then you have bulk wine right.
So you got the stuff that's inthe bottle right.
But then you got stuff that'sin bulk right.
And then you have these grapesthat keep on growing.
You just can't turn off thegrapes, right, you know mean.
So you know that you can.
You can start, come you know,compounding your inventory
depending on and I useinventories an overall piece
right, both bulk and, and youknow, and finish goods and it
(18:50):
can.
You know you can be a couple ofintegers behind and blink of an
eye You're like wow, we got tostart liquidating or moving,
moving stuff out.
Speaker 1 (18:58):
Yeah, no, I'm not envious of those problems at all
, but how many?
Back to the, the, the wineryside, because we talk a lot
about the more digitally nativeBrands, or you know more so
online marketers like brightsellers or or a wink, or even
yeah, I'm sorry yeah there's theactual wineries themselves, the
(19:19):
producers, and I think theyactually have a relatively
unique Especially with therising cost of customer
acquisition.
Yeah, they have uniqueopportunity to be able to have
that in taste or in persontasting room experience.
Yeah, translate that to youknow, a longer life with the
customer yeah, but when I wentto Napa and Was that back in
(19:42):
like June, yeah, you know thatexperience that you get in
person, yeah, go to the samewineries website and you're like
what just happened?
Like there's nothing.
Everything that you told me inthe tasting room, all the really
cool things that you do thehistory, like all this awesome
stuff you go to the website andyou're like what the hell just
(20:02):
happened?
There is none of that on thissite.
So like, of course, nobody'sgonna buy from you via that
website if they're seeing it forthe first time.
Like, yeah, you're just acommodity at that point, it's
just a, it's just a product.
You're not Putting in any ofthe unique sort of storytelling
components that you have in thetasting room.
Yeah, and then the second thingthat I thought was was a miss
(20:22):
for a lot of them was the lackof, you know, automated
follow-ups, automatedcommunications, like all the
stuff that can happen thereafter.
Once I do have that first visitbecause you know they get you in
the tasting room, you're,you're feeling pretty good.
After you have three glasses ofwine, I'm like, oh yeah, like
I'd love to buy Whateverproducts you put in front of me
(20:45):
You're so nice, whatever and youknow that leads to one thing,
leads to another and you'regoing home with like 300, 400
dollars of wine and some otherlike little gizmos and widgets
and whatnot.
But yeah, I mean I haven'tbought from a single one of
those wineries again because,yeah, I haven't really even
heard from them and and I thinkyou know that is a really big
opportunity for them that thepurely digital players don't
(21:07):
have where you can curate thatRelationship in person and then
have that lead to, you know, anongoing club or have that lead
to some sort of recurringpurchase behavior from From
people, when you know going toNapa isn't a once and once a
year, twice a year thing, forfor those outside of the
industry it's maybe a once everyten years or even a once in a
(21:27):
lifetime in some instances.
So, yeah, how do you keep thatcustomer for five years, for ten
years, when they're never gonnacome back to your location?
Speaker 2 (21:35):
Yeah, um, couldn't agree more, all those things.
I think the, the, the, the.
The issue is that there's adisconnect, right, the people in
the hope, in the, in thetasting room, are great at at,
at, um, you know, giving thatexperience, right, you know I
mean.
But then all of a sudden, whenyou leave, there's no one on the
(21:56):
other side to kind ofcontinuing that.
And it's usually like a wineclub manager at best, right, and
I mean that they have.
So you need to join the wineclub.
But there's a lot of peoplelike so, and my best example
Look, I have a couple examplesis when I was at our tessa now
this is many, many moons ago,right, and so.
But one of the things that wedid right is we took the wine
(22:17):
club on the road, right, and Iwas like, hey, invite a friend.
No one wants to go to a winewine event by themselves, right,
and we signed up a bunch ofwine club members that way,
right, and I mean I was likedude, it's just like Tupperware
in a way.
Right, bring a friend and bringa body.
You know, and I see you know,you're, you know, you know the
guys liken the.
You know the experience thatthey're having and their taste
in the wine and the kind ofhearing it.
(22:38):
So I think that's that's a bigpiece.
I think that you know, and it'sunfortunate, right, and I mean
you know, for the wine industryis is how do they bring that
experience there?
And you know, like, for example, one of the things I was
looking at a long time ago it'sprobably before its time was
using VR.
Right, I mean, you know.
You know, if you have put onthe headset, right, let's say,
one day when Apple gets, getsthat one out, maybe there'll be
(23:00):
more.
You know, you know, you knowadoption, but in the interim,
you know, why don't you take adrone and fly around your
vineyard?
Right, if you own a wine or avineyard, shame on you if you're
not Giving someone thatexperience of walking through
the door and sort of lookingaround them.
People can, you know, can kindof experience or remember that
(23:21):
experience, right, they're notconnecting back with the
consumer.
So you know this is back in,you know, the mid-2000s, right,
and I was working with thegentleman.
He had a business called Callfor Wine, mark Parton.
Right, the guy sold wine overthe phone.
Literally, I was blown away.
I was like who would pick upthe phone.
This is ridiculous, and Ilistened to the calls, right,
(23:43):
and people like, oh my god, bob,oh Bob, we had such a great
time in Napa, that was the bestthing.
And they go through their spiel, right, and like, hey, you know
what I mean and it's amazing,right.
So you know, I think there's somany touch points that a lot of
wineries don't don't do,primarily because there's no
handoff.
But now, with technology, it'shere, right, and I mean where
(24:07):
you can sort of like touch them,you know email, sms, whatever.
And then you layer back in thathuman piece, because I think
you know, really, ask me why Ilove the wine industry is
because it's still reallyhuman-based.
People are interacting witheach other, right.
So.
But it's kind of, how do webridge that piece over there to
get over there, so where it'slike when they do go back home,
(24:28):
they're in, they're in Chicago,it's winter, and they're in
their cubicle, or used to be intheir cubicle or offices.
They remember sitting in theNapa Valley and having a nice
glass of wine, right, and I meanthere's just nothing and you
know nothing but good feelings.
So how do you sort of bringthose pieces back in.
So I think but I think there'sthere's not been a lot of focus
(24:48):
of either bringing thattechnology in or them wanting to
get it Right.
So I think that's where we needto sort of bridge that gap a
little bit.
But I think that the, the, thewineries that do do well right.
Speaker 1 (25:01):
So yeah, and tapping into that social component which
is unique to wine and beveragealcohol in a way that most other
product categories don't have,correct.
I don't.
You have like communities thatare created around some
verticals, but not in the sameway that you have Real, like
(25:24):
human interaction with peopleover a bottle of wine or over a
glass of scotch or whatever.
Yeah, bourbon, bourbon orwhatever crazy.
And that's the unique thing tome about Alcohol is that that is
so neatly tied together, likeyou could have a thousand dollar
bottle of wine but you're withcrappy company and you know it
(25:46):
doesn't really matter.
You could have a ten dollarbottle of wine, but you're with
you know people who you careabout or you're having a good
time or whatever, and you'relike you know, this is actually
better than that thousand dollarbottle wine.
Totally, yeah, exactly, exactly.
I don't remember the nightsthat you you drink alone.
Yes, you probably shouldn'thave as many of those anyways,
so Uh, I'm with you on that.
Speaker 2 (26:06):
So drink responsibly, everybody, because I would say
exactly that can be the, thetagline for this episode.
Speaker 1 (26:14):
Well, no, that, that that's all.
That's all really fascinatingto me.
I have, um, I have a couple offun questions for you.
Um, yeah, but before I get tothose two fun questions, um,
given how sort of close you wereto Ecommerce and specifically
Shopify over the last, you know,two and a half, three years,
(26:37):
what like, how, what, what doesthat evolution been like?
Because you know, you were sortof early adopters of that
platform and solution when itcomes to, yeah, alcohol, but
obviously there's been a lot ofinvestment into it over the last
year, year and a half.
Um, yep, like, why Shopify, whye-commerce?
What are, what were you able todo that you weren't necessarily
able to?
(26:58):
Uh, with other solutions thatare out there?
Because I think this goestowards the, the talk track that
I'm Really fascinated with,which is and it's not just
alcohol either.
There's some other industrieslike this as well, but those
that are regulated or a littlebit more antiquated will have A
bunch of products that arecreated, you know, just for them
.
So you have, like, sms Just foralcohol.
(27:21):
You have e-con platforms, justfor alcohol you have, I don't
know, uh, name your solution.
It's basically what you knowthe big boys are doing, like
Shopify or cladio or whatever itmay be, but it's tailored and
tweaked just a little bit to bevery unique and specific to that
particular category, which I'mobviously biased.
(27:43):
But I think that is a losinggame in the long run because you
have a defined TAM and you canonly Invest so much and you can
only grow so much, like younever will be able to have 4500
or 5000 engineers like Shopifyhas, because you're only
servicing one category.
So, yeah, talk me through whatthat, what that looked like and
(28:04):
and how that was adifferentiator for you and being
able to make To negotiate assuccessful as it has been.
Speaker 2 (28:09):
Yeah, I, you know, I think there's probably two
pieces of that right.
One is, you know, the First andforemost, like you were saying.
I mean, how do you get like Alot of the solutions that are,
that are out there, are actuallykind of quasi homegrown For
lack of better word and have alltheir limitations, that you get
all the bugs and all that otherstuff that kind of comes along
(28:30):
with it, right, and they're onlyas big as the two or three man
development team that someoneprobably outsourced somewhere
else, right?
I think one of the things thatShopify brought to the table was
just that, that, that power andthe ease so I'll talk about the
ease in a moment, but just kindof the power of just being able
to look at a very complex sortof industry.
(28:52):
Right, you have 50 states.
That's literally like sellingto 50 different countries.
No different, right you must,was shipping it to Mexico is the
same as, maybe not as bad as,texas, but still there's
different rules and differentlaws, right, you know what I
mean, and you have to abide bythose.
Then, then you have the issueabout taxation, right, you know
what I mean which is bringdamage within it.
(29:13):
The states really care about isthe money, exactly Right, and I
mean, and they will come afteryou, right, if you ship, not
without a permit, if you don'tship, you know all these things
right, and if you don't havethose things buttoned up, they
can come back to you.
Right, and understanding thingslike Nexus and you know all
these different pieces rightthat you got to do it.
I'm just a winemaker man, youknow what I mean.
I'm just trying to sell alittle bit of wine, right, you
(29:34):
know what I mean.
And so having these solutionstrying to prethought out in a
larger organization like aShopify et cetera, as a platform
kind of brings some of the bestminds together into it.
Right, to solve this problem.
Right, it's not just one personor one company doing it, it's
multiple companies doing it atthe same time and I think that's
why they've taken the lead onsort of like understanding and
(29:57):
sort of providing the platformplatform for everybody.
The second part is the ease.
Right, you have to rememberthat these are winemakers, right
, and the guys at home right,you know what I mean.
And maybe he's no differentthan the Etsy guy, etsy person,
right, you know what I mean thatwants to sell something.
Right, I got a product, I gotto get it online.
How do I do that?
Right, and I think that theymake it easy enough for people
(30:18):
to kind of get on there, right,and that's what's bringing in
the critical mass, right.
And then the people are able toyou know, sell what they sell
and you know and how they do it.
So I probably would say it'sthose, you know, it's those two
things, and then you later onsort of other software that you
can just plug in like oh, thisis the taxing thing, okay, good,
I'd like that.
You know what I mean.
(30:39):
So put that guy on right.
Oh, I'd like to do, you know.
You know integrated marketing.
You know emails with AB testingor whatever.
You know what I mean.
So they're bringing on all thesepieces and all of a sudden you
have a platform that makes youlook and feel a lot bigger, but
you have all the professionalthings behind it.
So that's probably why I, youknow, I would say that that's
(31:00):
was why we were able to ramp upso quickly, so fast.
Right Is because the platformwas there, we weren't dealing
with all the buggy things and wecould focus in on the business
instead of trying to spend allof our time.
You know, oh my God, why didthe software not work?
You know, why can't thiscustomer get this Right?
And I mean, and there wasalways somebody there to kind of
help out.
So I think that that allows themakers, whoever whatever they
(31:23):
make, do what they do.
And then you, you know, youknow, have the technology and,
like I said, it doesn't matterif it's wine or widgets.
Speaker 1 (31:31):
Yeah, you basically have three you know, separate,
very distinct business functions.
In a, in an alcohol brand, youhave the producer, which they've
pretty much got that allcovered.
But then you have marketing andthen you have like legal
regulatory tax, and you knowthose are the two you have with
marketing, and then the legalregulatory and tax.
(31:52):
That gets overlooked far toooften, I think.
But then that is thedifferentiation factor between
those that are very successfuland those that aren't.
It's not enough to just be agrower or producer.
Even if your wine is great,there's like a lot of great wine
out there.
There's a lot of great, youknow, booze.
There's a lot of great beer.
You have to invest in all threeof those different areas in
(32:13):
order to be successful.
Speaker 2 (32:14):
Yeah, and if you're a small company or medium sized
company, where do you have thefunds to do that Right?
I mean, the margins are prettytight as they are, you know what
I mean.
And on an EBITDA aspect, andnot everyone's willing to invest
all that money, so I guess it'sa larger number of people
coming together, so which isgood.
Speaker 1 (32:31):
Well, my fun question for you what is your favorite
wine memory?
Speaker 2 (32:39):
In 2007,.
I had a little time off, in agood way, and I have a friend of
mine who owns a winery inSanseir and you know how
everyone's like oh, come visitthe winery, come visit me and
everything else, and his name isJean Laurent Vacheron and I had
a little.
I had about two months off andI was like it's the summer and I
(33:02):
was single and I was like youknow what?
I'm just going to go to France.
I just called them up and Isaid, hey, it's Quentin, he goes
.
Speaker 1 (33:08):
Hey, quentin, how are you and I was like great I got
a little time.
Speaker 2 (33:11):
I'm thinking about coming over to Sanseir Can I
stay for a month I was reallyonly thinking for a month and
maybe travel around Europe alittle bit.
And I was spending about twomonths there and you know I just
loved it.
I mean I'm a huge fan ofSanseir's, you know then, and
just even more now, just kind oflike the geology and the
history and just it was just fun, right.
I mean I've really got a chanceto kind of see the wine
(33:32):
business from the ground up,from the vines and where they
make the wine and everythingelse.
So that's probably one of mymost fun memories in
professional and personal for alifetime.
And Jean Laurent and I havebecome really good friends too.
Speaker 1 (33:43):
So which is great.
That's awesome, and his name isalso totally awesome, like.
I wish I had a name thatsounded that cool.
I know Jean Laurent Vacheron.
Yeah, that's going to be hardto beat, hard to beat.
And then last question yeah, ifyou had to pick one bottle,
what would it be?
(34:03):
And then who would you besharing it with?
Speaker 2 (34:08):
Hmm, the bottle goes back to Vacheron.
There's a, there's a, there's alabel that they, there's a
bottling that they have calledLa Romaine and it is a
particular piece of ground in intheir estate and I jokingly say
that it's like, it's likechewing on rocks, but I know
that's not a good marketingdescriptor, but it's amazing,
(34:28):
right, the limestone and justthe chalk that's there right in
the flint that you get.
It's, it's amazing.
So definitely would be thatbottle of wine.
And yeah, you know my, you knowmy dad passed away several years
ago.
I'd love to share, if I, if Icould pick anyone in the world,
probably be him, because he wasreally big in a wine and kind of
(34:50):
helped me, you know, with mywine sort of journey.
I mean, he wasn't, he had alittle collection, he had really
good stuff, right, he onlybought the best, right, you know
I mean not a lot of it, right,you know I mean but, but but he
did have a few bottles that hereally cherished and depends on
whose birthday it was that.
Which bottle came out?
Cousin, maybe a little lower,mine a little better, you know
so that's how we did it.
Speaker 1 (35:10):
That way, there's a, there's a pecking order, for
sure, in terms of who got what,why Exactly right.
Speaker 2 (35:16):
So I think the same thing.
Speaker 1 (35:17):
I mean, I'm literally anytime I'm going to dinner, I
have people visiting and there'sthere's a pecking order, but
also there's a level of doesthis person actually even really
care or like what's?
The appreciation level going tobe there, yes they don't have
to have a lot of experience.
They could have more.
No experience, but, yeah, adesire to learn or anything like
that.
(35:37):
I mean, that's how I got superinto it.
Was, you know, other peopletaking an interest in me,
expanding my palette, and but Ihad the desire and I had the the
, the, the want, I guess, tolearn, yeah, whereas you know
some people, it's, you know,white claw, you know happy dad,
or maybe you guys are gettingthe free shit.
Speaker 2 (35:59):
Exactly, I'm breaking out the seller for you, Exactly
exactly Because it just wasnone of just me being drinking
by myself, so why, right, right?
Speaker 1 (36:07):
And in that case I'm just going to hang out with my
dog on the couch.
So yeah, exactly.
Most definitely Well, thank youso much for joining us.
If people want to get incontact or in touch with you,
what would be the best way to doso?
Online?
Speaker 2 (36:22):
Online is.
My email is QJAY at Bacchus,and that's about
B-A-C-C-H-U-S-C-G dot com.
Speaker 1 (36:32):
Okay, awesome.
We'll make sure to include thatin the show notes here, yeah,
but thank you again for comingon and for everybody listening.
As always, this is BrandonAmoroso.
You can find me at drinkscomand we will see you on the next
episode.
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