Interview, Part 2: Bill Foley On The National Chain Business And Upcoming AcquisitionsJune 17, 2013
In this second part of our interview with Bill Foley, the Foley Family Wines founder discusses his ramped-up focus on national retail and on-premise chains, as well as the outlook for upcoming acquisitions and the growth of his New Zealand-sourced business in the U.S.
SND: How are you dealing with retail consolidation and the increasing importance of on- and off-premise chains across the U.S.?
Foley: Starting January 1, we dedicated three individuals to focus on national retail chains like Safeway and Kroger. We’re now really trying to penetrate that part of the market, with multiple SKUs in each account. By this summer and into fall, we’ll be well-positioned to start driving our chain business. In the on-premise, we have two people dedicated to chains, and we’re now doing a significant amount of business there. Historically our bread and butter on-premise has been local independent restaurants and small chains, emphasizing by-the-glass. It’s taken a while to get traction in the bigger on-premise accounts, but now the hits are starting to come in.
SND: How are the prospects for your two most recent California acquisitions, Langtry Estate and Lancaster Estate?
Foley: Langtry and sister brand Guenoc are now growing. Guenoc is mainly a California appellation brand. The previous owner (Langtry Farms) didn’t have very good pricing control, so when we closed last November we immediately took control of that and made some distribution changes. Langtry/Guenoc did 134,000 cases last year; this year we’re on pace to do 180,000 cases. Lancaster, which is small production (6,000 cases of estate Cab), and Roth are a little tougher. Roth’s production is at about 35,000 cases and basically flat. We’re working hard to make sure we don’t get long in supply on a few of the varietals.
SND: What about your New Zealand imports in the U.S.?
Foley: We’re participating in the New Zealand category’s growth. We launched Clifford Bay, our entry level Sauvignon Blanc brand, in the U.S. about three years ago. Last year we did about 50,000, cases, and this year we think it will hit around 85,000 cases. We also have some private label New Zealand brands that we’re supplying for specific chains, and those have a lot of growth potential. They could add another 60,000 cases this year.
SND: What’s attractive in terms of acquisition opportunities right now?
Foley: I’m looking in Dundee, Oregon, and think I have one transaction that may happen there. I’m also looking in Napa, but not for one of those remote brands that you have to make an effort to get to. I did that with Kuleto and Merus. I’d rather pay a bit more and get a well-known brand that I can take on and improve—but not one that’s a ‘fix-it’ brand. My investment strategy over the last several years has been to go for the distressed properties that represent good value but are in need of fixing. After years of that, my sales and marketing people are tired of fixing. I’d like to get to 2 million cases, but I’ll need a few decently sized acquisitions of 150,000-200,000 cases each to get there. I’m also nearly running out of production capacity, which hasn’t been a problem in the past. So the next deal must include a production facility that can process 200,000 cases.Tagged : Foley Family Wines, wine