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Interview: Vintage Point’s David Biggar Sees Nearly 40% Growth For Layer Cake

September 29, 2011

In 2006, former Beringer Blass executives David Biggar and Tom Peterson launched a Sonoma-based wine venture called Vintage Point. The two partners signed winemaker Jayson Woodbridge and his Napa and Barossa label Hundred Acre as their first brand. In August of that year, Vintage Point released Layer Cake, an internationally sourced brand retailing at $15, initially with a South Australian Shiraz. Subsequent Layer Cake releases have included a Cabernet Sauvignon (California), Primitivo (Italy), Malbec (Argentina), Chardonnay (California), and a new Pinot Noir (California). Layer Cake grew by 35% last year to 250,000 cases, winning an Impact “Hot Brand” award, and this year’s growth is projected at nearly 40%.

Vintage Point currently has a 15-brand portfolio and total company volume projected at 600,000 cases for this year. Other labels besides Layer Cake and Hundred Acre are Educated Guess, B.R. Cohn, Luna Vineyards, Gary Farrell, Goose Ridge, Arnold Palmer, Moone-Tsai, Charity Case, Cherry Pie, Hidden Ridge, Garnet Vineyards, Pure Love Wines and Stonecap. Shanken News Daily recently caught up with Biggar, who is Vintage Point’s managing director, to discuss the company’s progress.

SND: Where in the U.S. is Layer Cake winning consumers?

Biggar: We’re in all 50 states. In the beginning, our main route to market was independent retailers and the on-premise. But in the past 18 months, Layer Cake has expanded to all channels—chains, clubs and national on-premise accounts like Morton’s. Demographically, we have almost as many millennials as baby boomers. Layer Cake is a great trading-up wine for those who typically buy bottles for $10 or so. But serious wine collectors, who might drink $300 Hundred Acre on special occasions, also love it as an everyday wine.

SND: What kind of growth do you expect for Layer Cake over the next year or so?

Biggar: We targeted 40% growth in 2011 and we’ll be very close to it. It will likely be around 37%-38% (off of a base of 250,000 cases in 2010). We’ll probably be in the 18%-22% range over the next three years or so as we expand our varietal offerings and shift some focus to our domestic varietals—Central Coast Chardonnay, California Cabernet and now a Central Coast Pinot Noir, which we’re releasing this week. We’re losing margin on (currency) exchange on a couple of the international wines due to the weak dollar, and we haven’t taken up pricing in five years. So we’re trying to gain a bit more balance between the domestic and global wines.

SND: Which wines within Layer Cake are most popular?

Biggar: Our first release, the Shiraz from South Australia, is still the number-one item in the line. It’s now the sixth-largest selling Shiraz nationwide, according to Nielsen, and the only Shiraz in the top 10 by dollar sales that’s showing growth. It speaks to the brand’s strength. Many retailers are using Layer Cake to attract consumers back into the Shiraz category. Malbec is our number-two item, and we expect it to pass the Shiraz in volume next year. Primitivo is number-three. Those were the first three varietals for Layer Cake. The domestic Chardonnay and Cabernet wines were added in the past year, and they’re following a similar growth track to our first three. We expect the new Central Coast Pinot to maintain that momentum.

SND: Who are Layer Cake’s top competitors?

Biggar: I don’t think Layer Cake has a direct competitor, because we make six wines in four different countries. But we’re not a negoçiant buying bulk. All our winery partners have solid fruit sources or their own estate vineyards. The winemaking team, led by Jayson Woodbridge, is the same group that makes Hundred Acre. While the Layer Cake wines aren’t made from single estate vineyards like Hundred Acre, much of the same winemaking philosophy is employed. Jayson meets with each of our small growers and oversees the entire process from grape-growing through winemaking.

SND: What other brands within the portfolio are showing strong potential?

Biggar: Nearly every brand is showing growth. We’re careful to limit our portfolio and keep a tight client list. We don’t believe we can carry 40 brands like larger companies. Educated Guess is a Napa-sourced Cabernet for under $20, which is kind of a magical price point. It has doubled in the last 18 months. BR Cohn is a new signing that’s known for its Olive Hill Estate Cabernet, but they’re also seeing great growth in their Silver Label Cabernet, and now Chardonnay. Both BR Cohn and Educated Guess have been in the Top Values section of Wine Spectator, and we believe both will reach 100,000 cases. Luna Pinot Grigio is showing high double-digit growth in chains and we’re launching red and white blends next year under a new extension, Lunatic. In Washington, Goose Ridge and its second label Stonecap continue to score in the high 80s and 90s with Wine Spectator, and, at the high end, Hundred Acre, Cherry Pie, Moone Tsai, Gary Farrell and Hidden Ridge are selling well, mostly in restaurants.

SND: How big is your restaurant and bar business versus retail?

Biggar: We’re around 20%-25% on-premise across all our brands. We’re aiming to increase Layer Cake’s on-premise sales. One area where we see opportunity is within Pinot Noir. We have six or seven Pinots spread across our list, from just under $10 a bottle to a little over $30—meaning wholesale prices to restaurants. Pinot is still showing very healthy double-digit growth, and the wines are getting better. Our Garnet brand is made from estate grapes down in Monterey, and positioned at $10 by the glass. Not a lot of people can meet that price with estate fruit. There’s a fair amount of competition at $12 to $15, but we have a significant price advantage to those wines.

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