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Interview, Part 2: Bill Terlato, President And CEO, Terlato Wine Group

October 19, 2018

In the second part of our interview, Terlato Wine Group president and CEO Bill Terlato discusses the company’s spirits business, its entry into Washington wine, and the future of the fine wine market in the U.S.

SND: This summer, you named wine industry veteran Sandra LeDrew as COO of Terlato Wine Group. How does that move change things for the business?

Terlato: Sandra has been a great asset and partner for our family. She brings a wealth of experience gained overseeing the strategy, planning, and processes for large multinational companies. We originally hired Sandra last year to have a daily presence out at the wineries in California and get things organized there, which she did very well. Now we need the same thing on the sales and marketing team: a formalized, well-developed strategy to continue to grow our business.

SND: Last year, you entered Washington with the purchase of Klipsun Vineyards. How is that project progressing?

Terlato: Since the purchase, we’ve replanted some sections of the vineyard, and planted 20 new acres. We now have 120 acres planted overall. We’ve kept all the grape contracts in place. You have some great wineries with high scores that are producing from that vineyard (Quilceda Creek, Seven Hills, Col Solare, and Betz Family among others have sourced Klipsun’s grapes). We had a small section where the grapes weren’t committed to anyone, and from that we’ve made a Cabernet-based red blend the past two years, about 500 cases. We’ll probably release that next year just into the Pacific Northwest, retailing somewhere between $75-$90. It’s an opportunity to show how good we think the wine can be from that vineyard. Looking forward, we’ll either sell the grapes from the 20 new acres or expand our own project if we think there’s a good opportunity there.

SND: What’s new on the spirits side of the portfolio?

Terlato: We’ll do about 140,000 cases this year, after starting from scratch just a few years ago. Nonino amaro and grappas ($45-$179) are doing very well, as is Greenhook gin ($35). Greenhook, which is made in Brooklyn, established a nice business just in the New York region, and we’re making great inroads expanding its distribution. Riazul Tequila ($45-$60), Breaker Bourbon ($45), Spring Mill Bourbon ($30), and Don Pancho rums $40-$500) are also doing well.

SND: What key trends are you monitoring for the future?

Terlato: The industry landscape is shifting under our feet. It’s changing, and it’s changing pretty quickly. Those who can adapt will gain at the expense of those who can’t. There are route-to-market changes, and there’s cannabis, which is gaining steam and is going to have an effect on the business. Couple that with the consolidation trend across the industry, and there’s a lot going on. We want to play to our strengths. We understand the luxury consumer, and we know how to build healthy brands with longevity. Another strength is our expertise in the on-premise. As food culture continues to develop in the U.S., the wine business is improving along with it. But the vast majority of wines on the market are still blended from bulk wine or sourced from growers where the brand has no control over the farming. I think the next evolution will be toward more estate-grown wines that can show the consumer exactly where they came from.

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