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Terlato Pivots To The Off-Premise To Offset Restaurant Shutdowns

April 24, 2020

Restaurants and bars across the country remain shuttered as the coronavirus crisis rages on, and it’s uncertain when they’ll be able to reopen. For Lake Bluff, Illinois-based Terlato Wine Group, where the on-premise accounts for about half of its 1.9-million-case, $356 million business, a quick pivot to retail-focused strategies and innovative consumer engagement initiatives has been instrumental in generating new revenue streams. Thus far, the company’s efforts have paid off: In the 4 weeks through March 21, sales were up by 34% in Nielsen channels, and they continued to hold at around 30% in the early days of April.

Sales through partners including Kroger, Whole Foods, and Target have helped spur gains, and the redistribution of restaurant-focused brands into retail has also been key. “We have a number of labels that were about 80% allocated to restaurants, so prior to the pandemic they were very limited in retail accounts,” says president and CEO Bill Terlato. “Now, we have cases that we’re able to offer to retailers, who’ve enthusiastically bought those wines.” Terlato points to Gaja, M. Chapoutier, Ca’Marcanda, and other luxury labels as garnering high interest at retail, where they’ve become more available.

The company’s larger-volume brands are also contributing, with Terlato noting that many consumers are turning to wines in the $15-$35 price range. Chief among these is The Federalist, which earned Impact “Hot Brand” honors after rising 11% to 320,000 cases last year. Across all brands, Terlato is seeing sales on its e-commerce platform—Uncorked.com—rise considerably in recent weeks.

Terlato is stepping up consumer engagement through virtual tastings, hosting one to two a week for such brands as Rutherford Hill and Chimney Rock. “We’ve offered consumers packages that come with three or four wines, and we’ll then do tastings hosted by the winemakers,” says Terlato. On average, the tastings have attracted between 50-150 people, and they’ve since inspired private tastings as well, which are being offered to wine club members in lieu of physical tasting room visits. On Terlato’s spirits side, which includes Angostura, Greenhook Ginsmiths, and Nonino, many of the company’s brands are also offering virtual tours of their distilleries, and hosting virtual happy hours.

While acknowledging that significant on-premise business is unlikely in the immediate future, Terlato is lining up new on-premise programming to support restaurants from the moment they’re open. “This disaster is not going to last forever, and there will be a recovery,” says Terlato. “But right now, we’ve been forced to be creative and look for new avenues and opportunities, and so far they’re working.”—Julia Higgins

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