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Interview, Part One: John Grant, Managing Director, Beringer at Treasury Wine Estates

April 4, 2013

After a 20-year career in the wine industry that included a tenure as president of Constellation Wines Australia and senior leadership roles at Kendall-Jackson and Lion Nathan, John Grant became managing director of Treasury Wine Estates’ Beringer unit last summer. In addition to Beringer, Grant oversees the Chateau St. Jean, Etude, Stags’ Leap, Be. and Castello di Gabbiano brands, among others, on a global basis. In this first part of a two-part interview, Grant discusses the progress of recent new products from the Beringer unit, as well as Treasury’s vision for its California business.

SND: The Be. brand, which debuted last spring, was among the higher-profile launches in Treasury’s recent history. After a year on the market, how is it doing?

Grant: We tried Be. at two different price points—below $10 on the West Coast, and above $10 on the East Coast. And we found—perhaps predictably—that below $10 at retail it flew off the shelves. Over $10 it sat quietly. So we’re now fine-tuning our pricing strategy in the Northeast, and we have it where we want it in the rest of the country. We probably had higher expectations than are currently being realized, but we’ll continue to support Be. because, where we have the pricing right, we’re very happy with the performance.

SND: Another recent newcomer is The Skinny Vine, a low-calorie wine. How has that been received?

Grant: The Skinny Vine looks to be a very attractive proposition with a totally new audience. The wine industry has had a few attempts at the low-calorie idea that haven’t been successful. We’re going to nurture this quietly. It’s in a very narrow test area—just 4% ACV—but even with that it’s already turning at 100,000 cases. We’re promoting it through a sponsorship with Weight Watchers targeted to a specific calorie avoider, and we think we’ve got something. The next step is to determine how we leverage this kind of product in the broader market. The obvious choice would be to expand it into a large established brand, taking our learnings from The Skinny Vine and applying them to a low-calorie Beringer, for example. We’re not quite ready to do that yet, but it’s an exciting prospect.

SND: We recently broke the news that Treasury is targeting the Hispanic consumer segment with a new wine, Los Hermanos. How are the early returns there?

Grant: We’re in 10 Hispanic-focused markets, keying in heavily on three, and we think we’ve got something here as well. Los Hermanos is showing some tremendous early form. The irony is, while it’s targeted at the Hispanic community in both name and flavor profile, it’s actually reaching not only those consumers but a broader audience as well.

SND: What’s one example of where Treasury misfired, in your view, with its California business over the past decade?

Grant: We’ve had a brand called Meridian for a long time. Meridian started life on the Central Coast at a dedicated winery, with dedicated vineyards. Ten or 12 years ago when I was running Kendall-Jackson, Jess [Jackson] and I used to talk about Meridian as a worthy rival. Over the ensuing period, that particular wine was reduced in price and went to lower-cost fruit sourcing in a bid to increase volume. With the benefit of hindsight, you probably wouldn’t do that again. I’m an advocate for quality, premiumization and elevating brands, not the opposite. Meridian is a case where the low road was taken, and as a consequence it’s now in a price point where it’s a fighting varietal brand, and up against some very stiff competition.

SND: Conversely, where has Treasury’s California unit pushed the right buttons over the years?

Grant: The flip side of a story like Meridian is Beringer Knights Valley. Over the past four or five years that brand has come into its own by following the exact opposite plan. We’ve gone into a discrete estate vineyard area. We own about a third of the Knights Valley, and we have firsthand knowledge of what blocks can produce what outcomes. That work also allowed us to identify some special blocks from which we now produce a Knights Valley Reserve. These wines are getting regular low- to mid-90 scores. That’s a case of taking the high road. If you get it right, over time you’re rewarded with the ability to expand the program and enjoy a price increase here and there. Our Beringer predecessors understood that vision. I think over the past 8 or 10 years it’s been somewhat lost, but we’re now in the process of recapturing it.

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