Interview, Part 1: Bill Foley Sees U.S. Growth Heating UpJune 14, 2013
Through his Foley Family Wines group—housing a host of premium-and-above labels including Firestone, Merus, Sebastiani, Chalk Hill, Lincourt, Foley Estates and others—longtime financial industry executive Bill Foley has been among the California wine industry’s most active players in recent years, averaging more than one acquisition in the Golden State a year since 2007, in addition to moves in Washington and New Zealand. Shanken News Daily recently spoke with Foley to get an update on his rapidly developing stable of brands—now at about 1 million cases (including some California exports)—in part one of this two-part interview.
SND: How is the Foley Family Wines portfolio progressing from a volume standpoint so far in 2013?
Foley: Our U.S. business started out very strong in January and into the middle of February. Then it bounced around in late February, March and into April. May turned out to be the record shipment month in the history of our company. Apples to apples (excluding 2012 acquisitions Guenoc/Langtry and Lancaster/Roth), we were up 60% last month over a year ago. After the turbulence of the prior few months that surprised me a little bit. But if it keeps on going, it’s pretty encouraging. We actually carried 30,000 cases into June that we couldn’t get out the door in May, so we started this month with a headstart. A year ago, out of 150 SKUs, we were long in supply on 20 or 25. As of the end of this May we’re long on four SKUs, and not very long. We have about nine months’ supply in Roth Sauvignon Blanc, when we’d prefer to have about three months’ because we’re ready to launch the 2012 vintage. But across the portfolio, I’m actually getting nervous now about not having enough wine for some of the brands that are really selling quickly.
SND: Within the range, which wines have been driving growth?
Foley: Firestone is doing really well. We hired a new winemaker there about three years ago and his first reds are starting to come to market and are getting great scores. Sebastiani is up a solid 20%. Last year Sebastiani was at about 260,000 cases. This year it will crack 300,000 if we can supply it. In general, the under-$50 wines are selling fastest for us. Chalk Hill estate Chardonnay is priced around $39 a bottle, and we’re selling right through that. We weren’t getting that kind of traction two years ago. The economy seems like it’s just a bit better now.
SND: Will the strong 2012 harvest help buttress supply on brands like Sebastiani?
Foley: It will help out a lot, because the 2012 vintage was remarkable both for abundance and quality, all the way from Santa Barbara to Sonoma and Napa. We’ll have very good supply coming along, and all controlled supply. Our vineyard acreage is now at about 2,500 acres in the U.S. (including 206 planted acres at Ramal East Vineyard, acquired last fall), up from 1,750 acres a year ago. All that fruit will start rolling through, and then I can better develop the vertically integrated model I’ve been trying to construct for some time.
SND: How is the pricing equation evolving in the California business so far this year?
Foley: Over the last 12 months we’ve tightened up our pricing so we’re very consistent across the country. The overall firmness of our pricing is much stronger than it was a year ago. I haven’t been able to say that since at least 2007.Subscribe to Shanken News Daily’s Email Newsletter, delivered to your inbox each morning.
Tagged : California, wine
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