Interview, Part One: Excelsior Wines President Marc Goodrich Embraces ChangeFebruary 24, 2015
In 2011, Concha y Toro and Banfi Vintners formed Excelsior Wines to market the Concha y Toro range in the U.S. market, as well as the wines of Trivento, Concha y Toro’s Argentine property, and the Chilean wine giant’s Little Black Dress and Five Rivers brands from California.
In late 2013, Marc Goodrich transitioned from his position as chief operating officer at Banfi to the helm of Excelsior Wines. Believing that Excelsior had untapped growth potential, he has significantly changed the way it markets and sells its portfolio. In Part One of this two-part interview, Goodrich discusses those changes and the company’s performance with Shanken News Daily managing editor Peter Zwiebach.
SND: 2014 was a year of big changes at Excelsior. What brought this about?
Goodrich: About a year ago, we weren’t very happy with our performance. We brought in a consultant and spent about eight months looking at everything. Then we made two significant changes. First, we rationalized our SKUs, eliminating roughly 10% of the portfolio. Like many competitors, we’d been chasing trends, and a lot of SKUs weren’t adding significant value. Second, we executed a similar rationalization on promotions, for the same reason. We decided anything that we did would have to add value and be profitable.
SND: Were there any other changes?
Goodrich: We also took a hard look at how we go to market. The planning process with our distributors used to be top-down, with us telling them what we need. We’re now collaborating with our wholesalers more, and building strategies for the marketplace. With key retailers, we previously had what I’d call a transactional relationship, where we’d have a great product or program and tell them to run with it. Now our teams in the field and the office are working together with retailers, showing them where opportunities are and how to take advantage of them.
SND: Was there a change in headcount?
Goodrich: We increased our headcount by about 10% as a result of these changes. One area of focus was fine wine. It’s very challenging with a portfolio like ours, ranging from Frontera at $10 for a magnum to Don Melchor at $125 a 750-ml. We’ve brought in new fine wine managers. In key markets, our distributor manager will handle everything at $20 and below, and our fine wine manager now handles everything above that. So, between the additional personnel and the reallocation of people, we expect better results. This is really Excelsior 2.0.
SND: How did Excelsior’s portfolio perform in 2014?
Goodrich: It was basically flat. Frontera was down by around 2%, partly due to SKU rationalization. Frontera’s in a very challenging price tier, but I’m optimistic for this year. Many of our other wines fared well. Casillero del Diablo grew by about 7% in the U.S. last year, crossing 400,000 cases. Years ago, we trademarked it as the official wine of Halloween, when we were among the few brands targeting adult consumers on that occasion. Others have since joined in, but we surpassed our goal of selling 100,000 cases in the two months before Halloween. Concha y Toro Gran Reserva ($16) was up nearly 40% with a good on-/off-premise mix. We see a lot of opportunity in that price tier. Further up, Don Melchor grew by 15%—without selling the 2010 vintage, which was recognized as one of Wine Spectator’s top 10 wines in 2014. That will sell this year, so we expect continued success.
The full interview appears in the February 1&15 issue of Impact.
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