SND: How did 2023 finish out for Wilson Daniels? What’s driving growth?

Lombardo: Fortunately for us, our business continues to have momentum. We’ve strengthened our portfolio with two critical additions within the last 12 months. One was the Gaja properties—including Gaja Piemonte but also Ca’Marcanda in Bolgheri, Pieve Santa Restituta in Montalcino, and Idda in Sicily. That gives us much stronger coverage in those regions of Italy. We also had the addition of the Faiveley properties, including Domaine Faiveley headquartered in Nuits-Saint-Georges and their recent acquisition Domaine Billaud Simon in Chablis. We saw revenues increase in excess of 10% last year, definitely assisted by new portfolio additions, and overall they’re now approaching $270 million, with 60% coming from our national business and 40% from our wholesale business.

SND: How is the key on-premise segment faring?

Lombardo: To our surprise, we’re doing more business post-pandemic on-premise as a percentage of our business than we were pre-pandemic. Today, 62% of our business is on-premise, and if I look at pre-pandemic, it was roughly 57%. So our portfolio continues to resonate with consumers on-premise.

Considering the challenges that the wine market is facing—recent SipSource data has total wine down 7.4%—we’re very pleased with the fact that we’re still seeing double-digit percentage increases not only in revenue but depletions. The portfolio continues to get stronger. In recent years we’ve also added Chateau Peyrassol, Familia Torres, and Bergstrom, among others.

SND: Looking specifically at the luxury end, how do you see demand holding up?

Lombardo: Demand is still extremely strong in the luxury category. Our average retail price is north of $45, and there’s still excess demand there. While wine is facing some softening, we haven’t seen it in depletions. But what has put a little pressure on business is the destocking at the distributor level. In 2022, there was still some trauma from the supply chain issues of 2021. So inventories bloated a bit in 2022, and we’ve seen a normalization of inventories nationally, with the destocking slowing shipments more than it has depletions.

SND: What are you seeing in the sparkling segment?

Lombardo: The sparkling category is down 10% in terms of IRI data, and Champagne is down 16%. But in our portfolio Champagne Gosset is flat, as we’re depleting our allocation of 12,000 cases. Schramsberg has seen some softening but was only down 4% last year and is still depleting above 80,000 cases. We’re seeing more dynamism in Schramsberg’s Mirabelle range at around $30, which is up double-digits, than in the classic range, which is at $40-$50. Bisol Prosecco was up 13%, depleting in excess of 130,000 cases, of which 20% is Prosecco Superiore. Lastly, in rosé, Peyrassol was up 10% last year in a very difficult environment, depleting about 50,000 cases.

We’ll have more on Wilson Daniels’ 2024 outlook in the second part of this interview.