Interview, Part 2: Vintage Wine Estates CEO Pat RoneySeptember 27, 2021
In part two of our interview with Pat Roney, the Vintage Wine Estates CEO discusses how the 2-million-case company is addressing the direct-to-consumer and e-commerce space, as well as challenges ranging from the pandemic to California wildfires.
SND: The past year and a half has presented wine companies with no shortage of challenges. How have you addressed them?
Roney: Well, we weathered the pandemic challenge, first and foremost, through our direct-to-consumer opportunity. We opened up a second distribution center in Cincinnati, Ohio so we could get two-day delivery in over 90% of the country. That was very successful for us because we subsidize our shipping and we’ve grown that business. We were up almost 40% in our e-commerce business last year. And it’s because we had the teams in place to act on the opportunity. We started doing virtual tastings, and we were able to pivot a lot of our tasting room staff and ramp up our video activities. Now, of course, hospitality is starting to return and we don’t know how long it will return for, but we continue to show some growth in that segment.
SND: In addition to DTC, have you been able to expand the off-premise business to counteract that on-premise challenge?
Roney: The challenge with a company like Vintage Wine Estates is that we’re a collection of a lot of different brands. We don’t have four or five really strong power brands. And wholesale grocery really pivoted to the top 30 brands. The consumer wasn’t wanting to go shop and have an experience. The consumer wanted to get in and get out of the store. We didn’t have the same highs as some others, but we also didn’t have the lows. We’re so strong in digital marketing, and we unleashed our whole e-grocery team and have seen a lot of growth working with our major retail partners on e-grocery.
SND: Have any of your wineries been affected by the California wildfires in the last year?
Roney: We’ve certainly had some smoke tainted wines that we had to deal with. But because we’re so diversified as a company—only 15% of our business comes from Napa and Sonoma—we can pivot to other areas. We always try to de-risk all of our facilities by keeping the underbrush and everything else down to a minimum. And vines, you know, in a non-drought year, are pretty good at protecting themselves because they’ve got so much water. But the insurance premiums are really going through the roof, up over 500% in the last three years. As a winery it’s hard to even get insurance. We’re actually going to self-insure, and then over-insure on top of that. We see that as a much safer way and perhaps less costly way to manage our risk.Subscribe to Shanken News Daily’s Email Newsletter, delivered to your inbox each morning.
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