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Sogrape Subsidiary Evaton Plots Move Upmarket

August 25, 2017

Connecticut-based importer Evaton USA is the U.S. subsidiary of Portuguese wine producer Sogrape Vinhos. While parent company Sogrape Vinhos has sales of about $250 million, Evaton is projecting sales of 500,000 cases and $24 million for 2017. Evaton is currently reorienting its portfolio, with an eye toward moving upmarket. SND’s Julia Higgins recently spoke with Evaton managing director Luis Gândara da Silva about the company’s new strategy, new products and overall plans for the future.

SND: How has Evaton’s new strategy been progressing over the past year?

Gândara da Silva: We have multiple initiatives ongoing. We’re streamlining our portfolio and aligning the business so it’s more oriented to where the market is going. We want to find opportunities that the bigger companies might overlook. Sogrape is very willing to invest and grow in the U.S. for the long term.

SND: What price points and categories are you targeting?

Gândara da Silva: Our sweet spot is from $8 to $15, which accounts for about 50% of our sales—up from about 30% six years ago. We’ve made progress in improving the mix and capturing more of the premium segment. We have two strong categories in Portugal and Spain. With Portugal, we’re seeing double-digit growth on our Gazela and Mateus brands. We also just launched Silk & Spice ($13 a 750-ml.), a Portuguese red blend, and we expect it to reach 20,000 cases this year. From Spain, we have Montecillo, which has gone from 10,000 cases to 30,000 cases in a relatively short period of time. Framingham, from New Zealand, is also doing very well, as is Chateau Los Boldos from Chile. Of our total 16 priority brands, 11 of them are growing this year.

SND: What sales channels are strongest for your key brands?

Gândara da Silva: 75% of our total sales are in the off-trade. But we’ve got sweet spots like New York City and South Beach where the on-premise is important. In New York, for example, on-premise sales account for about 39% of total wine sales. We see opportunities in regional chains, as well as in e-commerce and travel retail.

SND: How are you approaching e-commerce?

Gândara da Silva: It’s something we’re assessing. Right now, we work with Wine.com as our primary e-commerce channel. So far, we’re quite happy with the results. It’s a very small portion of our sales, but it’s growing. The e-commerce market in the U.S. is continuing to evolve.

SND: What are some of the current challenges you’re facing?

Gândara da Silva: One difficulty is dealing with consolidation at the distributor and retailer levels, but there are also opportunities there. To that end, we’re hiring more people to be closer to the customer, the distributor and the markets. We’ll have about 27 full-time staff by the end of the year. We’re also looking at ways to further complement and strengthen our portfolio with new additions. Most likely we’ll stay within the Portugal and Spain categories, which represent our DNA.

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