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Impact Seminar: Rich Bergsund On E-Commerce, Chris Pappas On Fine Dining

March 11, 2020

The program at last week’s 44th Annual Impact Marketing Seminar took on a wide range of topics, running the gamut from premiumization in spirits to the impact of the emerging cannabis industry. Among the speakers was Wine.com CEO Rich Bergsund, who represented another rapidly developing space: e-commerce.

Taking on the topic, “The Future of Online Retailing,” Bergsund noted that Wine.com was a pioneer in the e-commerce arena, launching 22 years ago. The San Francisco-based company has seen marked growth in recent years, achieving approximately $150 million in revenue in 2019.

Yet even as Wine.com and e-commerce in general have made strides, Bergsund said the potential upside remains vast as more wine consumers move to shop online. Currently, only 3% of wine sales occur online, he noted. If online sales penetration rose to 10% industry-wide, as is the case for global luxury goods, they would reach $4 billion by the end of this decade; if they reached the overall retail average of 15%, sales would be in the $7 billion range.

Turning to how Wine.com plans to boost online adoption, Bergsund highlighted the inroads the company has made with the younger generation—particularly those under 30—who are driving strong sales growth. Relatedly, Wine.com’s mobile app now generates approximately one-third of the company’s annual revenue. Bergsund added that the retailer’s StewardShip membership program—costing $50 a year for free delivery—has grown to encompass over half the business, with most members spending over $1,000 annually.

Moving from retail to the on-premise, The Chefs’ Warehouse CEO Chris Pappas addressed the topic, “Supplying America’s Fine Dining World.” The Chefs’ Warehouse supplies specialty foods to restaurants, hotels, country clubs, and other venues, with a particular focus on chef-driven establishments. The company offers roughly 55,000 SKUs to its 34,000 customers and operates in 16 markets in the U.S. and Canada through its 28 distribution centers. Sales are approximately $2 billion annually.

“We address the upscale casual segment all the way to the Four Seasons hotel and the best steakhouses in America,” said Pappas. “We have over 2,000 suppliers today in more than 40 countries.” The company distributes outside brands from around the world but also works with suppliers to create their own labels or develop releases in conjunction with co-owning partners.

While the fine dining business has been robust in recent years, Pappas noted that it’s not without its challenges, from supplying in-demand plant-based foods to detailing sourcing info for increasingly curious consumers. “People want a relationship with the product,” he explained. Other developments Pappas is keeping an eye on include the growing demand for delivery, which could impact the on-premise drinks business in the rising upscale casual segment.—Shane English & Danny Sullivan

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