Interview, Part 2: Silverado Vineyards President Russ Weis

In the second part of our interview, Silverado Vineyards president Russ Weis discusses the on- and off-premise conditions for Napa Valley wines, as well as the direct-to-consumer and export markets.

SND: Where is Silverado focusing its efforts in the retail channel?

Weis: The U.S. retail channel is about 40% of our business. While there are some really terrific examples of larger chains doing fantastic things with luxury wines, there are also examples of larger chains that are reducing the luxury part of their space. That leaves the field open for smaller specialized players, and also for regional luxury grocers, which are doing pretty well. So those are the places where we’re focusing the Silverado message.

SND: How is the portfolio faring in the on-premise?

Weis: We’re very bullish on restaurants, which represent about 20% of what we do. We’ve seen great growth there over the past six years or so. A couple of years ago we had fine dining accounts coming to us looking to build up back vintages of Napa wines, so we created a library three-pack of our Solo single-vineyard wine. This year we released the 2008, 2009, and 2010. Each year we’ll release another three-pack, moving forward a vintage per year. That’s been very well-received. It sells out in about two months, and it’s an example of listening to our customers and being agile enough to meet their needs. Another example is Chardonnay, where we now have three different estate-grown expressions from Carneros to serve different channels. Our Fire Tree Chardonnay is a little weightier and that’s exclusively DTC, while Vineburg is more bright and acidic and goes out in six-packs to restaurants. Our Carneros Chardonnay is a blend of the two, and that serves as our retail wine at $35.

SND: What about the direct-to-consumer segment?

Weis: Direct-to-consumer is about 25% of the Silverado business, and it’s stable at the moment. There’s a lot of competition here with the number of wineries that are opening tasting rooms, and visitation is relatively flat. But we’re doing what we can to delight our existing customers and attract new ones. Direct-to-consumer will always play a role because of the beauty of the Silverado winery and its expansive views of the valley. What it does is give us global ambassadors for our wines. Exports account for about 15% of what we do, and they’ve been really solid the past three years. Canada, Denmark, Austria, and Japan are all great markets for us.

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