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Wine Spectator Hosts Panel Discussion At Vinexpo On Doing Business In The U.S.

June 17, 2015

Before a packed audience at Vinexpo, Wine Spectator yesterday hosted a panel discussion entitled “Inside the U.S. Market,” which focused on methods and strategies for doing business in the U.S. wine market.

Moderated by Wine Spectator executive editor Thomas Matthews, the panel featured leading lights from all three tiers of the U.S. business. The panelists were Annette Alvarez-Peters, assistant general merchandise manager for beverage alcohol at Costco; Mel Dick, president of the wine division, senior vice president at Southern Wine & Spirits of America; Helen Mackey, vice president-menu strategy & innovation at Ruth’s Chris Steak House; Michael Mondavi, founder of Folio Fine Wine Partners; Stephen Rust, President, Diageo Reserve and Diageo Chateau & Estate; and David Trone, owner of retailer Total Wine & More.

Several themes permeated the discussion, including the importance of choosing a reliable importer and wholesaler, but the most prominent message from the panelists was the importance of building personal ties in the market. “The most successful international wineries visit the United States regularly, to build relationships with wholesalers, retailers and on-premise customers throughout the market,” said Dick. “It takes a lot of work, but you must spend time in America, and you must create relationships.”

“After 40 years in the wine business, I’m convinced to this day that relationships are what’s most important,” agreed Mondavi. “Wine is sold with passion, and fine wines are the most passionate and fun wines to sell.”

“I get many calls and emails from (wine exporters) wanting to do business, but after a few exchanges I sometimes find that there really isn’t an understanding of Costco’s business model,” said Alvarez-Peters. “Often they’ve never even stepped into a Costco. So if you choose to do business in the United States, you need to visit the market. And it’s important not just to ask what we need, but to see what you think might be missing from our set and consider what you might have to offer.”

Rust gave hope to aspiring U.S. players by noting that “the entrepreneurs are driving a huge percentage of today’s growth. They’re looking at things in a different way and continue to challenge companies such as (Diageo) about our thinking.” He touted Diageo’s venture business, an area “where we look at very small businesses and either make investments or direct acquisitions that are at a small scale—below 5,000-6,000 cases in the U.S. It’s tremendously interesting and valuable for us to see what may develop.”

Education also was a key theme of the discussion, and Dick noted that Southern employs numerous Master Sommeliers, a Master of Wine and more than 500 Wines and Spirits Education Trust members. Trone noted that one of Total Wine’s core competencies is “our people and our training—having people with product knowledge to communicate with customers.” He added that Total wine has been building classrooms in its stores, and now has 80 classrooms and offers over 20 different wine courses.

Mackey cited the Ruth’s Chris series of wine pairing dinners as a valuable educational and promotional tool, which also highlights the importance of having a knowledgeable, wine-dedicated staff. “If a wine isn’t hand-sold, it will just sit on the list,” she added. “What gets taught gets sold.”

Millennials were also a key theme of the discussion, with Trone noting that they’re now the nation’s largest spending block, eclipsing the Baby Boomers this year. “They’re educated, well-traveled and willing to take risks, and they love brand back stories about family histories and artisanal products. That’s why we look at our customers and see a real roadway to success with imported wine.”

Mackey noted Ruth’s Chris’s continued expansion in the red blends as a possible opportunity for imports to play in an area where people are willing to experiment. She also noted that consumers are moving up the pricing ladder. “When I started at Ruth’s Chris about four and a half years ago, we had an average price of about $11-$12 (by the glass), and that has crept up to $12-$14,” she said.

Alvarez-Peters cited Languedoc winemaker Gerard Bertrand as a good example of an import player who’s doing it right. “He works the U.S. market and has been doing so for a number of years,” she said. “He has high-quality wines, keeps them at a reasonable price point and is getting the scores to back them up. And he’s constantly learning what the consumer wants and how to over-deliver on quality at the right price point. That’s a good model for aspiring import players.”

Dick noted that the U.S. wine market has plenty of room for expansion. “If the U.S. drank as much per-capita as the U.K., our consumption would now be at 740 million cases,” he said. “And if we ever equaled France’s per-capita rate, we’d be at 1.6 billion cases. So the future for wine in America is great.”

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