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Terlato Taps Innovation To Achieve Double-Digit Portfolio Growth

March 1, 2012

Terlato Wine Group (TWG) president and CEO Bill Terlato has ample reason to raise a glass these days. Last night, he appeared before several million viewers as a guest judge on the finale of Top Chef, helping to raise his company’s profile through its long association with the popular TV show. And in a few weeks, TWG will complete a fiscal year in which it achieved double-digit volume growth—a particularly impressive feat considering the high-end positioning of its portfolio and the still-struggling U.S. economy.

Terlato and TWG show no sign of resting on their laurels. After unveiling a flurry of new initiatives over the past few years while many of its competitors scaled back, the company plans more expansion in the coming weeks with several high-end additions. “2011 was a great year for us, and we’re very optimistic about 2012,” says Terlato. “We’ve had very encouraging results from some of our newer initiatives, while some of our more established brands are also doing quite well. So our growth has been across-the-board.” Terlato is projecting volume growth of 13%-14% for the TWG portfolio for its fiscal year, which ends March 31. “We expect to announce several new partnerships in the next 60 days at the high end of the business, where we clearly aim to be.”

Santa Margherita ($18-$28 a 750-ml.), which continues to lead TWG’s portfolio with annual sales of more than 600,000 cases, is up by around 7% for the 2011 fiscal year. The brand has been particularly strong in the first two months of 2012, showing double-digit gains. Meanwhile, Gaja ($50-$600), Bollinger ($60-$300), Chimney Rock ($24-$150), Chapoutier ($15-$500) and Markham Vineyards ($15-$60) are all enjoying double-digit growth. Further down the pricing ladder, Terlato has a hit on its hands with Greystone Cellars ($11-$14), which is produced at Napa-based Markham winery. (Markham is owned by Japan’s Mercian Corp, which formed a joint U.S. marketing venture with TWG in 1995.) Created in partnership with the Culinary Institute of America, the Greystone brand has sold more than 40,000 cases since rolling out last fall.

Greystone squarely targets Millennials—a segment that Terlato says is “opening up to premium wine in a big way.” So too does TWG’s Seven Daughters ($13-$20), a range of California red and white blends introduced in 2008 (the brand has since added several varietals), which is up by 30% and closing in on 100,000 cases. Terlato also has high hopes for other recent launches aimed at Millennials, including two new entries in the thriving Italian sparkling wine category—Berlucchi ($20-$40) and Fizz 56 ($18.90-$19.99).

TWG also continues to reap the benefits of its longtime link with Top Chef, whose ninth season finale appeared last night on Bravo. Wines from TWG’s portfolio have been served on the show for the past seven seasons. TWG and Bravo have also partnered to produce Quickfire ($19), a brand named for one of Top Chef’s weekly stages. “We got in on the ground floor with Top Chef, and that’s proven to be a smart move as it’s grown into a great brand,” Terlato says.

Terlato was the first wine executive to appear as a guest judge on the show, in 2009. Much of that finale was filmed at the TWG-owned Chimney Rock and Rutherford Hill wineries. Terlato also appeared on last year’s season finale, which attracted around 3 million viewers.

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