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Interview, Part 1: David Townsend, President And CEO, The Winebow Group

May 19, 2016

The Winebow Group was formed in 2014, when New York importer and wholesaler Winebow merged with Virginia-based importer and distributor The Vintner Group. With total annual revenue of approximately $750 million, the merged entity has expanded aggressively on the wholesale side over the past two years and now has distribution operations in 19 states. SND senior editor Daniel Marsteller recently spoke with Winebow Group’s president and CEO David Townsend to get an update.

SND: In the past year, The Winebow Group added wholesale operations in Minnesota, Wisconsin and Washington state through acquisitions. Do you foresee continued expansion on that front?

Townsend: I don’t think you’ll see the market expansion at the same rate as over the last couple years. That was driven by the particular circumstances of the distributors we acquired, which created some nice opportunities for us. We’ll continue to evaluate each opportunity as it presents itself and see if a positive match exists. But I imagine the expansion will slow a little bit. As a wholesaler we’re in 19 states now, which cover about 55% of wine consumption in the U.S.

SND: Have you tended to leave existing management in place following distributor acquisitions?

Townsend: That’s really case-by-case. In the case of Noble Wines in Washington, the former owners wanted to stay with the business. In Minnesota with Grape Beginnings and Wisconsin with Purple Feet Wines, the owners were ready to retire. But in general, there’s a lot of loyalty and street equity that you buy with these companies, and we want to make sure we respect and maintain that.

SND: How are market conditions across your wholesale footprint?

Townsend: The business has been strong overall, but particularly in Florida, Virginia, South Carolina, Illinois and Washington, D.C. The on-premise has been the best-performing segment for us, with Florida, Virginia, Illinois and New York especially robust.

SND: This year kicked off with some blockbuster middle-tier deals, namely the creation of Southern Glazer’s and Breakthru Beverage. What’s your take on the consolidation dynamic?

Townsend: While wholesale consolidation has made big news lately, with some major deals taking place, it doesn’t have a huge impact on our business. We’re focused on a different price category, with our average bottle retailing in the $15-$20 range and a great deal of our line selling well above that. We’re competing more with much smaller fine wine houses.

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