Interview, Part 2: Hess Family Wine Estates MD Timothy Persson

In part two of our interview with Timothy Persson, the Hess Family Wine Estates chief highlights upcoming new products and the potential of the company’s import portfolio.

SND: Are you planning new brands or extensions within the Hess fold? What can we expect in terms of innovation?

Persson: When I hear the word innovate, I get a little cautious. There’s a lot of dubious proliferation of brands and line extensions finding their way to market under the guise of “innovation.” We’re a heritage brand at our core, and there’s a certain segment of innovation that, frankly, isn’t appropriate for us to engage in. But I’m acutely aware of the importance of staying relevant, so I think it’s crucial that we innovate responsibly. We’re excited about several upcoming initiatives. We currently have a Hess Shirtail Creek Vineyard Chardonnay ($10-$12 by the glass), which is a single-vineyard unoaked Chardonnay that is on-premise only. That’s gone gangbusters, so we’re introducing a Shirtail Ranches Cabernet Sauvignon running mate ($12-$14 by the glass) in the next 12 months. Also within the Hess Collection, we’ll introduce The Lion, our icon-level wine, in the next 18 months, priced north of $175 at retail. Another item we’re releasing shortly is a Mardikian Estate Pinot Noir ($85), a single-vineyard Pinot under the MacPhail brand. We’re also launching an Altura Maxima Icon wine from our Colomé estate in Argentina.

SND: Speaking of imports, what are the prospects for your Southern Hemisphere wines, like Colomé, Amalaya (Argentina) and Glen Carlou (South Africa)?

Persson: It’s heartening that as the Argentine category continues to develop in the U.S., it’s actually trading up. Having lived through the Australian category experience, I feared that things would go the opposite way. If you look at the last 12 months, there’s an overall decline in Argentine shipments to the U.S. But if you dig into that, it’s actually driven by a decline in the sub-$10 category. Above-$10 shipments are still going strong, and that’s fantastic to see. Regarding South Africa, the U.S. growth rates are attractive—in the high double-digits—but it’s still a niche play, and I don’t expect that to change dramatically long-term. However, it’s great to see the media now shining a spotlight on South Africa. Will it expand to 10% of the market? That’s unlikely. But I think the category will gain in popularity as more consumers realize the value it offers.

SND: Are acquisitions part of your plans for the next few years?

Persson: I’m ambitious about our U.S. growth potential. Our immediate priority is organic growth. The true potential of our core brands hasn’t been properly nurtured or explored because we haven’t previously had the route-to-market capabilities we do have now. Another priority is to secure fruit supply to fuel that growth, especially in the Napa Valley. I’m always interested in looking at vineyard acquisitions. Longer term, there will be a point at which organic growth won’t be sufficient to sustain us, and then we’ll look at M&A.

Tagged : Hess Family Wine Estates, wine

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