Issue link: http://winesandvines.uberflip.com/i/918844
140 WINES&VINES January 2018 BUSINESS pecially those heavily dependent on the three-tier system. The leader of one medium- sized company said it was taking a number of steps to increase prof- itability: achieving efficiencies through volume growth or other utilization rates, raising prices and shifting the mix more toward direct-to-consumer sales. The company's CEO didn't see reduc- ing costs for materials and labor as practical or desirable. Another company about the same size disagreed: It expects to reduce the cost of materials and inputs, e.g., grapes, barrels, lower labor costs, perhaps through out- sourcing or other efficiencies like mechanization. The CEO of a medium-size company in Napa said, "The short- age of skilled labor will become a material problem. We're investing and experimenting with mechani- zation; it is what we have to do." Strategies to drive profitability Summing up the results of the survey and interviews, Ray John- son of Sonoma State highlighted what wineries can do to main- tain profitability: • Increase marketing to the end consumer and make more con- nection, even if you sell through distribution. Create memorable experiences with the brand at the winery and beyond at stores and elsewhere. Leverage the power of customer relationship management. • Create authentic product in- novations and leverage them as consumers adopt the pre- miumization trend. Innovate with new products within ex- isting brands or develop new brands at higher price points. • Invest in your business rather than harvesting profits to take advantage of this era of premiumization. • Finally, Johnson reminded ex- ecutives to focus on cost control and efficiencies and consider mechanization and stretching geographic sourcing while re- taining brand essence. PARTICIPANTS IN 2017 EXECUTIVE SURVEY Name Title Company Type of Business 2017 Cases Average Bottle Price Joe Gallo CEO E. & J. Gallo Winery Winery 75,000,000 $6 Dale Stratton VP-strategic insights Constellation Brands Winery 65,000,000 $8 Brian Vos CEO The Wine Group Winery 52,500,000 $5 John Sutton CFO The Wine Group Winery 52,500,000 $5 Bob Torkelson President and CEO Trinchero Family Estates Winery 17,400,000 $7 Chris Indelicato Owner and president Delicato Family Vineyards Winery 13,000,000 $10 Ted Baseler President and CEO Ste. Michelle Wine Estates Winery 7,700,000 $20 Rick Tigner President Jackson Family Wines Winery 6,000,000 $12 Gary Heck Owner and president Korbel Champagne Cellars Winery 1,900,000 $13 Jeff O'Neill Owner O'Neill Vintners & Distillers Winery 1,900,000 $28 Steve Lohr CEO and co-owner J. Lohr Vineyards & Wines Winery 1,800,000 $25 Peter Mondavi Jr. Owner C. Mondavi & Family Winery 1,700,000 $7 Pat Roney President and owner Vintage Wine Estates Winery 1,600,000 $12 Donny Sebastiani Owner Don Sebastiani & Sons Winery 1,300,000 $9 Carmen Castaldi President Rodney Strong Vineyards Winery 900,000 $32 Carolyn Wente CEO Wente Vineyards Winery 858,000 $17 Tim Persson CEO and managing director Hess Collection Winery 756,000 $30 Jean-Guillaume Prats President and CEO LVMH Estates & Wines Winery *624,000 $24 Alex Ryan President Duckhorn Wine Co. Winery 435,000 $44 Joe Wagner Owner Copper Cane Wine & Provisions Winery 300,000 $21 Paul Dolan President and owner Truett Hurst Winery 209,000 $30 Mike Reynolds President Hall Wines Winery 100,000 $50 Mark Vernon President and COO Ridge Vineyards Winery 75,000 $40 Eileen Crane Winemaker and CEO Domaine Carneros Winery 45,000 $36 Ron Rubin Owner The Rubin Family of Wines Winery 44,000 $25 Steve Myers Founder and consultant MacRostie Winery and Vineyards Winery 40,000 $33 Dario Sattui Owner V. Sattui Winery Winery 40,000 $25 Jeff Bundschu CEO Gundlach Bundschu Winery Winery 30,000 $35 Adam Lee Founder and winemaker Siduri Wines Winery 30,000 $36 Walt Klenz President Gary Farrell (The VinCraft Group) Winery 26,000 $42 Robert Fowles CFO Opus One Winery 25,000 $260 Ana Keller Estate director Keller Estate Winery 10,000 $44 Amélia Ceja Owner and president Ceja Vineyards Winery 7,000 $70 Cushing Donelan Director of sales and marketing Donelan Family Winery 6,000 $64 Alan Viader Director-winemaking and operations Viader Winery 4,000 $100 Kathleen Inman Owner and winemaker Inman Family Wines Winery 3,800 $52 Bettina Sichel Partner and GM Laurel Glen Vineyard Winery 3,000 $75 Cathy Corison Owner Corison Winery Winery 2,500 $100 Lloyd Davis Owner Corner 103 Winery 2,500 $45 Jon Moramarco Owner bw166 Consultant Mark Couchman Chief investment officer Silverado Premium Properties Consultant Matt Parker VP-acquisitions and sales Silverado Premium Properties Consultant Kevin McGee COO Terroir Capital Consultant Joe Ciatti Principal Zepponi & Co. Consultant Annette Alvarez-Peters GM-merchandising beverage alcohol Costco Retailer Jim Blumling Group VP-wine, beer, spirits Safeway Retailer James Davis Drinks category expert Tesco Retailer Curtis Mann Director-wine and beverage Raley's Retailer Mike Osborn Founder and VP-merchandising Wine.com Retailer Mark Coleman VP-sales and marketing Vinventions Supplier Tom Gallo VP-strategic business development G3 Enterprises Supplier Shaun Richardson General manager Laffort USA Supplier Mel Mannion President and COO M. Shanken Communications Media Antonio Galloni Founder and CEO Vinous Media Table source: Impact Databank, WBM 30 List, Wines Vines Analytics and personal interviews. *U.S. production.