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Interview, Part One: Bill Terlato, President and CEO, Terlato Wine Group

April 22, 2013

Terlato Wine Group enjoyed 18% sales growth in 2012, leveraging a portfolio that includes flagship Santa Margherita—which is now above 600,000 cases in the U.S. market—as well as prominent labels like Italy’s Gaja, France’s M. Chapoutier and Bollinger and California’s Markham and Chimney Rock. Over the last year, Terlato has also aggressively bolstered its stable, bringing in new imports from Italy’s Goretti family, partnering with New Zealand vintners Kim and Erica Crawford on their latest venture, Loveblock, and adding the Marnier-Lapostolle range, previously imported by Moët Hennessy USA. In this first part of a two-part interview, company president and CEO Bill Terlato discusses the key brands that have contributed to the group’s upswing.

SND: Terlato is known as one of the market’s true fine wine specialists. How much was the high end responsible for the company’s growth over the past year, and can you match that performance in 2013?

Terlato: We’re seeing growth across the board and across the portfolio. We now have a 20% market share in wine retailing over $20 a bottle, according to Nielsen. Within that, a broad range of brands are doing well. So far in 2013 we’re up about 26%. We’re planning for 20% organic growth this year. And there will be acquisitions on top of that.

SND: At the brand level, which wines have been leading the charge?

Terlato: Santa Margherita continues to be a very strong brand, up 8% (for the first 11 months of Terlato Wine Group’s fiscal year, which ended March 31, 2013), and that’s off of a pretty considerable base. Obviously we’re continuing to put quite a lot of effort behind that. Beyond Santa Margherita, in terms of other imports, M. Chapoutier is up 25%. That brand has been the top-selling Côtes du Rhône in the U.S. for the past three years, and we’re extending our lead. Langlois-Chateau from the Loire is up 63%, Il Poggione Brunello is up 19% and Mazzoni and our other Tuscan brands are up 43%. Two Hands—in the Australia category, which is getting battered around a bit—is up 4%, and we’re up 24% with Domaine Terlato & Chapoutier, which is also an Australian wine. Our South African portfolio is also up strongly, at 41%.

SND: You’ve also added other imports like Lapostolle and Austria’s Kracher of late. How have they fared since the transition?

Terlato: Lapostolle is doing very well. We’re focusing on broadening the distribution base, particularly on-premise, which is our area of strength. Kracher, which is a small, high-quality, iconic brand, is also prospering. We had it for six months of 2012, and during that period we sold three times what the brand had sold the entire previous year.

SND: How about your domestic portfolio?

Terlato: At the high end, Episode, our Napa-sourced Bordeaux blend, is up 54%, and Chimney Rock (also Napa) is up 28%. Seven Daughters ($13-$20), which we introduced in 2008, is up 21%. And Greystone ($9-$11), which we created in partnership with the Culinary Institute of America in 2011, is up 39%. I think we just understand the fine wine consumer. Everything is firing on all cylinders for us right now.

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