February 4 2007
With apologies to Gary Vay-Ner-Chuk at Winelibrary and his likely epitaph, I’ve had the opportunity to meet a couple of other people that are also changing the wine world.
The wine industry has always attracted outsiders—while it seems to be a fairly inclusive community, the truth is that most of the money required to start a winery has come from outside the industry. Very few have bootstrapped their way to the top—it’s just not set-up that way given capital costs for land, personnel and equipment and the lag time in between grapes in the ground and bottle on the shelf.
For many people (myself included) interested in aligning their passion with the industry in a professional capacity, working somewhere in the value chain is the way to go. This model for getting close to the industry is probably the best way to go because outsiders can drive change in what can sometimes be a hidebound and traditional business clinging to legacy models of business.
As a result of professional work, I’ve recently had the opportunity to come across numerous people, most of them young and all of them passionate about creating value in the world of wine.
Interestingly, I say “creating value” because most people in the wine industry, though capitalists they may be, are not nakedly greedy and fueled by the love of money. More often these people are organically fueled by a passion for the vinous arts with an appreciation for good business that begets profits.
Two companies I’ve recently interacted with, led by wine industry outsiders, are examples of companies that are going to change the way we buy wine at retail from a distributor and how we buy wine consumer direct online.
Taken in Two Parts, I’ll review the distributor first.
Many in and around the industry deride the three-tier system as profiteers required to be a part of the sales chain by regulatory mandate and not value-add. The grinding axe usually includes an anecdote about lack of focus for quality-oriented small brands and heavy-handed sales tactics for grocery store wines. While that may philosophically be true, there needs to be a line of demarcation between big distributors and small distributors.
Professionally I’ve been on something of an extended road trip meeting with small distributors in many states and almost to an organization; these are smart, engaged, creative people shaking things up by focusing on artisan brands that require a hand sell.
Candid Wines based in the Chicago area is one such distributor. Started by Scott Kerrigan and Damien Casten, both of the business partners come to the industry from other professional experiences.
Casten was a young American living in Paris when his wine radar went off while eating a fantastic meal, well-paired with wine. After working in the rat race, he enrolled in the New England culinary institute and returned to France to cook at fine dining establishments, include the Michelin three star restaurant Lucas Carton before eventually settling in Chicagoland and meeting up with business partner Scott.
Scott Kerrigan, a fascinating guy and my lunch companion at Blackbird in Chicago recently had a similarly circuitous route to the world of wine. An MBA with a law degree, he’s obviously wicked smart and well-oiled in the machinations of big business. Straddling the line between foodie and passionate wino, he enrolled in culinary evening school to hone his home kitchen chops before transferring his business acumen to the wine industry and starting up Candid Wines with Damien.
Their position to market is, perhaps, the most interesting aspect of their business, though certainly not the only aspect that makes them unique and a safe bet for success.
With their mantra of, “We Make Wine Lovers Happy” they are building a business that does a 180 on the traditional distribution business. And, in my experience, entrepreneurs that are stridently dogmatic about their “brand,” how they do what they do and with whom they do it are the best candidates for long-term success. A clear execution path from points A to B is the result.
Candid wines is just that. They strike me as protégés of Kermit Lynch, creating an iconoclastic reputation for absolutely the best quality wines with a terroir-based organic bent. By building on their own palates with a reputation for quality, they will create a business that succeeds by the dint of their hard work.
But, what’s more interesting is the transparency with which they are building their business. Sure they sell wines to retailers and restaurants in the Chicagoland area, but they also have a robust consumer-oriented events portion of their business and this, in my estimation, is their secret sauce.
Most distributors provide closeout wines to non-profit events and maybe supply a bottle or two for a retailer tasting on Saturdays.
Candid Wines take their personal backgrounds and strengths to create events for consumers that are a likely profit center, and also have the magic opportunity to drive consumer pull demand for their wines at retailers and restaurants.
Smart. Very smart.
Their events, including corporate, public, catered, and charity events is an opportunity for them to give, in their words, a “Candid Wine Experience” that “delivers all the passion and pleasure that embodies great wine.”
With growth occurring in every corner of the wine industry—from amount of wineries to continued record-setting levels of consumption, I’m glad to see that new spins on old business models are occurring to advance the cause of the industry—just like Candid Wines is doing in Chicago with a singular focus on sensibly growing their business while building their wine portfolio and creating events that, of course, “Make Wine Lovers Happy.” They are turning the traditional mode of linear operation of the supply chain inside out.
Next up, I’ll review an online business that is capitalizing on the emerging Wine 2.0 space coupled with the off the charts growth of online winery consumer direct shopping.
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