Winebow On The State Of Play In Imported Wine

Known for an extensive portfolio of fine wines from Europe, the U.S., and the Southern Hemisphere, Winebow is a player in both the supplier and distributor tiers. Its Winebow Imports division represents 100 estates, with annual volume of around 1.8 million cases, and the Winebow Wholesale unit covers 18 markets that account for 60% of the wine consumption in the U.S. SND executive editor Daniel Marsteller recently spoke with Diego Lo Prete, senior vice president of marketing and global brands at Winebow Imports, for an update on progress.

SND: How are conditions overall in fine wine? What are you seeing in the market so far this year?

Lo Prete: The biggest positive change is that we’ve recovered a sense of predictability that we lost for two years. We understand the market conditions better, what the consumers are doing, and the brand dynamics. For example, we can now finally get a grip on the magnitude of the on-premise recovery—it’s recovering, but at a slower pace and not yet to the pre-pandemic level. But being able to predict the market a bit better helps a lot to calibrate our expectations.

We also now have our sales team and winery personnel back in the market face-to-face with buyers, which is super important because we’re a fine wine and on-premise driven business. What we’re seeing is that the brands that did exceptionally well during the pandemic have softened their trends, though they’re still higher than pre-Covid. And producers who kept up their promotion through the pandemic are having a higher degree of resilience than those that didn’t. Overall, imports are slowing down, but we have a diverse portfolio, so we’re able to leverage the specific areas and price segments that are still growing.

SND: What issues are you concerned about as obstacles to growth?

Lo Prete: There’s a tension between managing costs and price strategies, because not all brands or players can push price increases to consumers, but all of them are seeing increased costs in logistics, labor, glass, and so on. So we need to monitor this dynamic closely, always understanding that the consumer could shift to lesser cost alternatives, which is happening in the mainstream trade. Families are dealing with inflation, so while we have the super-premium side working very well, when it comes to the mid-price tiers and entry-level wines at $12-$15, we’re seeing declines.

SND: Drilling down in the on-premise, what are the particular challenges and opportunities there for Winebow?

Lo Prete: There are still fewer outlets overall, with a lot of the entry-level and suburban restaurants wiped out by Covid. There’s more tourism, but the business travel and spending associated with that is not there. Before Covid, restaurants were working a lot on the dining experience, creating very sophisticated beverage programs. Now they don’t have the personnel, and their priorities are different—they’re focused first on making sure they can survive in the current environment, and beverage programs have been scaled back. Eventually we’re hoping we get back to where they’re building more sophisticated wine lists again. Another issue is that younger people are drinking less alcohol in general, and we’re also competing on the spot with cocktails and RTDs, and that’s a factor of concern for fine wines. Still, we’re now back to a 45%/55% on- to off-premise split at Winebow, a big swing from the previous year when it was more like 40%/60%, and our super-premium and luxury wines are doing very well on-premise.

We’ll have more on Winebow Imports’ brand portfolio in the second part of this interview.

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