V2’s Dan Leese On Chain Expansion And Opportunities In Imported Wine

While V2 Wine Group has a California-geared portfolio, president Dan Leese sees ample room for expansion in Oregon, Washington and the import segment. In the second part of this interview, Leese looks at those opportunities, as well as the changes wrought by the twin waves of wholesale and retail consolidation across the U.S. wine market.

SND: Are there any segments where V2 is underweight relative to the growth prospects?

Leese: We’re very focused on filling the Oregon opportunity. The marketplace is ready for more Oregon wine. There’s an opening to push the category out more from its Northwest roots. I would hope that we’re in Oregon by the first of next year. Washington would also fit our portfolio nicely. A premium brand from the Central Coast would be a great addition, as would sparkling wine or Champagne. As far as varietals, we don’t offer a Pinot Grigio and that would make strategic sense as well.

SND: Besides Champagne, what other import regions are you targeting?

Leese: We recently entered Chile with a partnership with Morandé, which is a premium proposition. In New York and California we introduced a Côtes de Provence this year called Coeur Clementine. It’s doing quite well, and we’ll launch it nationally on January 1. And we’re committed to getting into Italy in a fairly significant way, as well as Argentina and possibly Spain.

SND: How is V2 addressing the growing importance of chain retailers?

Leese: Regional chains are the biggest growth area in the wine business, and they’re all upscaling and increasing their wine offering. Our average retail is about $20 a bottle, so there’s a big opportunity for us, and we can’t leave all that business to the biggest wine companies, because trust me, they cover that area really well. We recently added three regional chain directors, which will give us much better coverage on two levels: one is calling on the actual buyers, but also working with our distributors who all have their own chain retail managers. Having dedicated chain directors also frees up our regional managers to call on independents, work with the restaurant trade and manage the distributor.

SND: What’s your take on the current wholesaler landscape?

Leese: When we started our relationship with Merryvale and Starmont in February, it brought us a whole new set of distributors, including RNDC and Young’s. We decided to keep Merryvale and Starmont with them. The reason is that we’ve found that changing distributors is very difficult. I can’t tell you how many salespeople have told me during my career, ‘Distributor A is so bad, it can’t get any worse.’ Then you make a change and it gets worse for six months. The big suppliers—Bacardi, Diageo and others—have all done their consolidating, which has created a significant ripple in the market. In the short-term it’s better for us to manage more distributors and be a little less efficient than to deal with the ineffectiveness that can result when you consolidate. We’ll let the wholesaler consolidation play out. We don’t think Southern Glazer’s and Breakthru are the end of the story. We expect RNDC to make more moves. Winebow has bought several small independent distributors—some that we do business with. The best we can do is manage the situation and look at the landscape once it’s settled. We have a big chunk of business with Southern Glazer’s, a growing portfolio with Breakthru and a small group of boutique distributors that are doing a great job for our smaller hand-sell wineries, like Glunz in Illinois, Chambers & Chambers in California and Baroness in Colorado.

Tagged : V2 Wine Group, wine

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