XChateau Wine Podcast

With the health and wellness and moderation trends booming, the non-alcoholic wine market has been growing quickly off a small base. Launched in 2019, the Giesen 0% range has solidified its position as one of the leaders in the NA wine market. Duncan Shouler, Director of Innovation, explains how the 0% range was developed, the critical elements of non-alcoholic wine, the current market conditions, and what it will take for the non-alcoholic wine market to succeed.Detailed Show Notes: Duncan’s background - was in marine biology and shifted to wine ~20 years agoGiesen - family owned, 40 years old, large winery (crushes ~20k tons/year), a broad range of wines from large scale to single vineyardStarted non-alcoholic (“NA”) range 5 years ago (2019)~17% of production today, growingHas a more significant reach and impact on the market vs. regular winesThe creation of the NA range came from a fitness challenge in 2019, when he could not drink alcohol for 1 month and discovered there were no good choices in the NA space. Spinning cone technology (good for quality as it uses lower temps than other processes) also became available in NZ at that timeNA winemaking process - create regular wine, then remove alcohol; for red wine, you need to balance the tannins (need ripe, soft tannins)More expensive to make - costs 15-20% moreNeed to replace ~25% of volumeNeed to go through spinning cone technologyLower cost from no alcohol excise taxesNA taste - loses some of alcohol’s texture, body, heatNA wines age similarly to regular wine (except in cans)NA wine markets - still in growth mode, needs higher quality wines to succeedThe US is ahead of most markets, and the UK is slower with more traditional drinkersMainland Europe is booming, and NZ is behindMost off-premise, some growing pains (e.g., Boisson closed its stores), mostly bought where people buy alcoholOn-premise still embracing category (Giesen launching super premium range to target on-premise)Most large players (e.g., Constellation, Treasury) are looking at NA wineNA wine drinkers - originally abstainers driving growth, now people substituting wine driving growth from moderation trend; broad market from boomers to legal age Gen Z; 35-60 females largest cohortPrice points aligned with regular wine ($9 low end, up to $18/bottle, some products ~$55/bottle)Removed alcohol of high quality can be used for other things (e.g., gin, biofuel)NA wines can have up to 0.5% abv, Giesen wines 0.4-0.5% abvYou need to consume 5 bottles of NA wine to get 1 glass of 13.5% ABV wine.45% abv similar to ripe bananas, some fruit juices, breadNA wine should still be kept away from children as it is still a wine experienceMarketing NA winesLow calorie is significant; Giesen is low in sugar (drives calories), which plays into the health and wellness trendMost effective - social media and influencers - play well with Millennial and older Gen Z’s, essential NA wine growth categoryOlder consumers know Giesen from regular wineNutritional and ingredient labeling - mandatory for regular wine in the EU; NA is a food product and requires itGiesen back labels specific for each wine, the main driver of differences are in sugar contentNutritional data has some positive elements (e.g., potassium)Large serving size (12 ounces, ~½ bottle) driven by US FDA, looking to change back to a 5-ounce glass

Having struggled to manage and maintain distribution for her family winery, Cheryl Durzy, CEO of LibDib, decided to start her own distributor. In comes LibDib, a tech-enabled distributor that lets any alcohol producer have distribution in most of the key US markets. Cheryl provides background on the US 3-tier system, the role of a distributor, and how LibDib is helping producers get distribution, enable wine sales, and become a tech platform for other distributors. Detailed Show Notes: US 3-Tier SystemPut in after prohibition to keep one tier from owning alcohol distributionTiers - producer, distributor, retailerUS distribution heavily consolidated into 3 large ones, lots of smaller specialty distributors vs. many distributors in the 70s/80sDistributor functionHelps consolidate suppliers for trade accounts; accounts don’t have resources to manage each supplier separately (e.g., invoices, checks)Pay taxes, do complianceLogistics (heavy, fragile product)Customer service (mistakes, breakage, returns, samples)Sometimes act as a winery’s salesforceGetting a distributor2024 - distributors are shedding brands vs. taking on new onesTypically - look for fit w/in a distributor’s portfolio, pick someone with a good reputationDistributors will ask - what will be your investment in the market? How often will you be here? Do you have feet on the street?LibDib - enables wineries to sell themselves, a tech-enabled distributorStarted as a wholesaler in 2017 (CA, NY), enables distributor for any producerThe platform enables rich content and e-commerceHas license in 9 states, enabled through RNDC in 6 states (e.g., Texas)~1,500 suppliers w/ active accounts, ~700 wineries w/ ~450 actively sellingOriginally focused on spirits, wineries have increased by ~50% in the last few yearsUses FedEx to send wine, integrated API to track status, negotiated good rates <50% of DTC rates; have cold chain, ice pack options for hot temperaturesNew markets launching late 2024 / early 2025LibDib use casesGet wine to specific accounts in a marketEnable wine brokers in other statesImporters sell directly to accountsShip special projects from large wineries that distributors don’t want to touchPros/cons of LibDibPro - always have distribution, good communications/customer service, good technology experience for producers and trade accountsCons - no salesforce, need to be a little tech-savvyBusiness modelMarkup of 14-18% on sales (vs. 30-35% for most distributors) + producer pays for shippingSubscription service (Gold, Silver, Plus) - get lower markups and services (e.g., portfolio management, VIP chain assistance, advertising on platform)~250 subscriptions (of 1,500), mainly on Gold for chain servicesRNDC partnership - OnDemand divisionOnboard w/ both RNDC and LibDib, no sales support28% markup, inclusive of shipping6 states, ~400 suppliersMost people want to get regular distribution, which can act as a trial for RNDCTrade account benefits~30k accounts (~50% active), not including RNDC statesNo minimum shipmentsEnables direct contact w/ wineriesAccess to smaller items not available elsewhereLibTech (launched Jan 2024 in TN)RNDC invested in the last round, and LibDib built e-RNDCSelling e-commerce platform as SaaS to other distributorsLibDib is developing AI tools for suppliers, early 2025 launch

As the pioneer of Vitis Vinifera in the Eastern US, Dr. Konstantin Frank is one of the key leaders of the Fingers Lakes region in New York. Meaghan Frank, a fourth-generation vintner, has been leading the charge to evolve its hospitality program to create brand ambassadors for the winery and the region. Its 1886 Wine Experience has won Best Wine Tour by USA Today in the last two years. Meaghan breaks down their hospitality program and its impact on their business. Detailed Show Notes: Finger Lakes region, NY - 150 wineries (of 400 in NY), NW NY State - 5 hrs from NYCSkinny, deep lakes that moderate weatherGlaciers left diverse soilsTourism-driven, seasonal visitors (spring to fall) for lakes, hiking, close to Niagara Falls, Corning Museum of GlassDr. Konstantin Frank - PhD in Viticulture from Odesa, Ukraine; a grape scientist; fled to NY during WWII35 years of cold climate grape growing experience when moved to NY1st to plant vinifera in Eastern USPlanted experiment station in the 1950s - 68 varieties, including Furmit, Pedro Ximenez, and Touriga Nacional) to research what would work bestDr. K Frank Winery17 vinifera varieties → 40 wines60% wholesale, 40% DTC40 states, 9 export markets (5%, incl Japan, Aruba (lots of NY visitors), UK)DTC 60% e-commerce (driven by wine club), 40% hospitalityHospitality programThe goal is to create brand ambassadors and loyalty, get the word out about the Finger LakesInspired by Australian hospitality programs - private, educational~40k visitors/year (#1 PA - 1 hour away, NJ, OH, NY core markets) - all seated, paidPre-pandemic - ~80k visitors/year for free bar tastingsMoved to an experience-driven program with wine educators, take advantage of lake viewThree experiences: Eugenia’s Garden - modeled after great grandmother’s garden, most casual, can do a la carte glasses/bottles/flights; enables people to enjoy the day; targets a younger demographicSignature Seated ($15pp) - most popular, educational, 1 hr, 6 wines, 5 different themes that are part of the winery’s story (e.g., traditional sparkling, Riesling pioneer, groundbreaking grapes, red wines)The 1886 Wine Experience ($75pp) - only May-Oct, 2-2.5 hrs, led by wine educator, a tour of the vineyard, sparkling and still wine cellars, seated tasting of 4 wines with bites, followed by additional tastings; won best wine tour by USA Today last 2 years; lots of 1st-time visitors book 1886 due to unique natureLessons learned - used to do 6 wine flight w/ bites, which was too many; did themed months (e.g., sparkling) - did not work with mostly touristsDifferentiators - spend lots of time, has a separate private space for 1886Wine club evolutionUsed to have people pay upfront for the year - bigger barrier to signing up, always feel like “playing catchup” to ensure value delivered, concentrated work during shipment periodsMoved to more subscription model - quarterly, 3 wines w/ default package, fully customizable, no upfront fee, 20% discount on wines, and get free tastings (no limit)8% club conversion - the only way to get free tastings now, used to waive w/ 4 bottle purchaseLocals small portion of the club - pickup option only 10%, PA #1Avg tenure 1.5 years, seeing it extend with the new club modelPopular winesHospitality - Rkatsiteli #1, traditional method sparklingWholesale - #1 & #2 - dry & semi-dry RieslingRiesling 60% of production, traditional method growingIncreasing issues around climate change - 2023 had the largest spring frost in history, increasing water issues

With ~2M monthly sessions on their newly unified commerce and media website, Wine Enthusiast continues to be a beacon for the wine industry. Jacki Strum, President of Wine Enthusiast Media, details their new wine review platform and global wine travel directory, democratizing access to wine and wine experiences globally. These initiatives help bring more people into the world of wine, including the younger generations, a critical part of building a vibrant wine industry.  Detailed Show Notes: Covid altered the business model, led to re-structured organization and unified media and commerce divisions on wineenthusiast.com2022 - WE paused reviews for emerging wine regions to recalibrate systemsExisting tasting process1 of 2 publications that review every wine blind (high cost), taste in flights w/in region and price bracketsNeed to store, archive, organize wines, set up tastings (in paper bags with numbers), and hire reviewers50% of reviews are done at HQ (imported wines), and West Coast wines are done locallyThe manual process of filling out a pdf and putting that into the box with wines, manually inputted into J Guide (legacy system, 20 years old), then stored and organized for tastingNew tasting platform (Sept 2024) - anyone can submit a wine for review and all will be reviewedNew digital platform - bar code scanners, printed tabs, can track shipments and deliveries, a more fluid databaseReduces large volume of questions from people submitting wine (can track digitally)It has the same # of reviewers, but a more flexible infrastructure can allow for more wines to be tasted$65/SKU processing fee - all reviewers charge in some way (e.g., require subscription, membership, or advertisement)6-month processing time (same as before) - hope to reduce this over time, based on the schedule of reviewersPrinted reviews selected by the tasting dept, all scores published online for freeTasting platform benefits for new and small wineries Opens up reviews to all regions across the globeThe US market is still heavily score-driven for distribution (some major retailers, e.g., Costco, Kroger, Albertsons, require scores from major publications)Helps with tasting room and local distribution salesMedia trendsPrint is still doing well (e.g., books outsold movie tickets last year), and magazine subscriptions are increasing (free tote bags help)Advertising up slightly Digital media is growing, with a targeted advertising focusEvents - biggest growth area - launched Sip of South America, Sip of Italy, and biggest event is Wine Star Awards (25th Anniversary in SF this year)TikTok now allows alcohol advertising, getting Gen Z engaged with wine knowledgeNew travel division for WETasting room directory, partnered w/ Tock - 1st agnostic travel global wine travel guideLeverages Tock’s wineries as launching list (~1,200 wineries, CA focused), building out globally with WE relationships (~100 wineries reached out in 1st month to be included)The 2nd most trafficked page on the siteWE revenue mixCovid - led to explosive commerce growthToday - back to 2019 levels, ~80% commerce / ~20% mediaGetting Gen Z engaged with winePrint enables content absorption without ad bombardment (e.g., book reading bars in NYC)Need to change content for each channel to target audience (e.g., Google as people’s “secret diary,” article on how to hold a wine glass became a top 5 article)Influencers, infographics, video - bring in new consumers (e.g., wine & potato chip parking article led to major influencer doing every pairing on TikTok)

During a career sabbatical from wine PR at a yoga teacher retreat, Morgan Perry tried combining wine education and yoga with great success. Her classmates practically forced her to found Vino Vinyasa, which has blossomed into six cities. With a focus on creating great experiences rather than selling wine, Morgan has created a platform where people learn about wine and end up seeking out the wines featured in classes. Detailed Show Notes: Morgan’s background - wine PR, been in wine for ~15 years, became a yoga teacher in 2017Wine & Yoga synergiesBoth are about mindfulness - yoga and the wine tasting processNot for hard-core wellness or yoga peopleVino Vinyasa For the yoga teacher exam, the teacher encouraged something different, tried yoga & wine, and got a fantastic reception6 cities - NYC (2017), Austin (2018), Nashville, Chicago, LA, HoustonVino Vinyasa programming45 min Vinyasa yoga (all levels), followed by wine tasting of 2 winesTaste wine after yoga - people are relaxed and have “yoga brain” in a quiet, focused environment → people may be better tastersEmbed wine facts during yogaA comparative tasting of 2 wines, usually themed (e.g., Rose, Sauvignon Blanc)All instructors have a wine background (min WSET 1)2-3 classes/month, 20-25 people/class for intimacy (capped at 30)~30 classes/themes developed to dateVery intentional class structure, certain poses not suitable for teachingBusiness modelThe core business is to get people to do more classes and events, not be overly salesy with wineDo private events (90% are bachelorette parties)Sell swag (t-shirts), co-branded bottlesLook to be good value (avg class price $30) vs. regular yoga classes (avg ~$20-25, range from $10-35 for drop in class)Students often seek out wines after classesWine selection for classesVenue dependant, venues carry liquor licensesCity Winery (NYC) - chooses the wines based on their selectionOther venues - can get wines donated for classesPrivate events - Customers can select wines/themesHave worked with PR clients for winesSome wineries sponsored virtual classes during CovidMarketingPR background has helped and got early press (e.g., digital Good Morning America), mostly wine marketEmail newsletterIG is the best channel, does some boosting, and is focused on growth during Covid (~11k followers)Digital marketing has focused on both wellness and wine people~15-20% of people have attended multiple classesPrivate eventsBachelorette parties, birthdays, corporate events (e.g., Binny’s in Chicago)The focus area for growthSame format as classesWellness & wine marketOther wine + yoga classes are not educational; some are tied to multi-level marketing wine programs that have long sales pitchesSees more yoga at wineriesThey have been approached by a couple of spas for partnerships, but the economics were not favorable yet (i.e., yoga teachers often are not paid well, ~$30/class)

Taking over an iconic estate can be both exciting and terrifying. When EPI purchased the iconic Brunello di Montalcino producer Biondi Santi in 2017, they asked Giampiero Bertolini to take over as CEO. Giampiero was excited to join the “Champions League” of wine but also had to convince the local community that this outside investment would be good. He delves into how Biondi Santi has been pushing toward creating more value for the brand while maintaining its core essence.  Detailed Show Notes: Biondi Santi’s historyFamily invented Brunello di MontalcinoFounded in 1888 - Ferruccio Biondi Santi had a vision of quality wine with longevity during a time when people focused on quantity with wine as part of the dietBottled in Bordeaux-shaped glass (a sign of quality) vs. standard Tuscan fiascoTancredi Biondi Santi - one of the top consulting winemakers of the time, was asked to write appellation rules in 1967Franco Biondi Santi (“the doctor”) - selected the BBS11 clone in the ‘70s and organized a 100-year vertical tasting (1888-1988) in 1994 with important wine writers that boosted the image of Brunello. One writer gave the 1891 vintage 100 pointsLa Storica (wine library) - has all vintages since 1888, releases one old Riserva with a current Riserva each yearPath to Iconic StatusThe vision of the family - be good winemakers, high-qualityIn the global market regularly → elevated the Biondi Santi to a different levelThe wine offered to Queen Elizabeth II in 1967 was a favorite of Frank Sinatra’sEPI acquired Biondi Santi in 2017 and installed Giampiero as CEO; the community was skeptical of French owners for an iconic estate had to convince neighbors by being transparent about what they were doing at the estateBefore the takeover, prior 20 years, the business was not run wellRebuilt global distribution, did not have US distributionRe-connected with trade, critics, and consumers/collectorsWhat they kept the sameReinforced market positionStyle of the winesWhat they changedNew vineyard philosophy (regenerative), replanted vineyards to improve quality, conducted soil studiesIncreased communications and more selective to the right people and thproperht channelsManaged pricing to reposition the brand to increase demandKeeping the brand freshwant s to be closer to the trade and consumer, spend more time in the marketStorytelling of what is happening at the estate, not just the history, but today’s actions that protect the futureLa Voce di Biondi Santi - started 3 years ago, selects one word each year that is part of their philosophy (this year is “respect”); creates novel/audiobook based on a keyword (e.g., Joanne Harris, author of Chocolat) and podcasts with winemaker and Giampiero around the keywordThe most effective initiative so far - repositioning the brand by increasing price → gave higher credibility and put the brand up another step, old vintages increasing in price on the secondary market, high demand on Liv-ex (one of few growing while price increasing), one of the top 35 wines in the world on Liv-exGrowth for Biondi Santi = value growth; volume is complex to growValue-driven by increasing distribution globally to rarify the brand further, not just taking price, but increasing value, which is a consequence of many conditions, and not rushing value creation in the marketBiondi Santi is now in 2.0 after 1st five years, and the next step is to increase the quality of its presence in the world and be closer to partners and consumers