Wine Warehouse Competes Against The Giants In California’s Wholesale Tier
February 13, 2019When Los Angeles-based distributor Wine Warehouse opened back in 1973, there were countless wholesalers doing business in California—all of them smaller players, and none with statewide reach. Today, after decades of consolidation, only three major distributors remain in the Golden State, and Wine Warehouse is one of them. Southern Glazer’s Wine & Spirits is California’s biggest distributor at $4.1 billion in annual revenues, followed by Young’s Market Co. at $1.9 billion. Wine Warehouse sits at No. 3, with revenues of $500-$600 million.
Too large to be a niche player yet too small to match the scale of its larger competitors, Wine Warehouse has found success in an era when few players of its size are left in the industry. “California is a diverse, sophisticated market, and we’re hyper-focused on the premium side,” says Wine Warehouse chairman and CEO Jim Myerson. “People have embraced the type of portfolio we bring to market. We’re premium, and we’re brand stewards.”
Wine Warehouse was founded by Bob and Jim Myerson, father and uncle of today’s chairman and CEO. In 1973, the family’s main business was The Ben Myerson Candy Co., established by their father, Ben, in 1937. Ben’s two sons diversified into wine after becoming acquainted with the wine buyer for Scandia, one of Los Angeles’ top restaurants at the time. They launched Wine Warehouse, and over the decades it became the focus. The candy business was sold in 2006.
“When Wine Warehouse started, nobody cared about wine, so we had almost all the good labels,” says current chairman and CEO Myerson, who joined the company in 1976 after graduating from Stanford University. “In the 1970s and early 1980s, we were able to go to the trade with many highly regarded brands.”
Although based in Los Angeles, Wine Warehouse has statewide reach, with Wine Warehouse North operating from Richmond. Today the company has around 700 employees, and boasts expertise across all three beverage alcohol categories—a crucial element in a competitive environment, says president and COO Greg Akins. “We employ specialists in fine wine, craft and imported beer, and craft and luxury spirits, who work with our sales reps and with our accounts throughout the state,” Akins says.
Wine represents about 51% of the company’s business, but spirits are the fastest growing category. E.&J. Gallo’s wine and spirits brands are an important part of the mix, but the Wine Warehouse portfolio is far-reaching. Wines include Joseph Drouhin, Graham’s, Drappier, and Jacquart, to name just a few, while the spirits side boasts Four Roses, High West, Michter’s, and Compass Box, among numerous others. Craft and imported beer has been part of the portfolio since the mid-1980s, and was solidified with the acquisition of Shamrock Imports back in 1995. Combined, spirits and beer account for just under half of the company’s overall business.
As customer demands change, Wine Warehouse has updated its approach. “We place a lot of emphasis on evolving our marketing function, taking what’s traditionally been about arming sales with collateral and programming and adding a focus on building communities on Instagram, Twitter, and Facebook,” says Jon Rhodes, the company’s executive vice president of marketing and business development. “We leverage the expertise of our specialists to educate buyers on how to get the most from our brands.”
Meanwhile, Wine Warehouse is clearly in growth mode. “Over the past couple of years, we’ve expanded our sales team by over 20%, with plans for further additions,” says Akins. “We’re also investing in additional warehouse capacity and advanced automation.”—Carol Ward
A full feature on Wine Warehouse will appear in the March issue of Market Watch.
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