Ep. 2162 Michael Traverso | Masterclass US Wine Market With Barbara Fitzgerald

I think the best advice is just being on the street talking to the buyers. And I like to sit in a restaurant, and I'm kind of weird like this. I sit in a restaurant, and I like to look at the tables and see what people have on the tables. Are they ordering glasses? Are they ordering bottles? Are they drinking beer? Are they drinking spirits? So it's really interesting to see. Yeah. Absolutely. I don't think that's weird at all. I regularly it's instead of, like, people watching, I'm, like, beverage watching. Are you ordering? What's coming out? Welcome to Masterclass US wine market with me Barbara Fitzgerald. In this show, we'll break down the complexities of selling wine in the US. By discussing the relevant issues of today with experts from around the globe. Each episode serves up three key insights to help elevate your winery's presence in the US market. So grab a pen and paper and let's pave the way for your success in the US. Hello. Welcome to Masterclass US wine market. Today, I am thrilled to welcome Michael Traverseo to the show. Michael is the vice president of business development at Wilson Daniels. A leading fine wine importer in wholesale. He owns a degree in business administration and marketing from the University of Southern California, a sensory evaluation of wine certification from UC Davis and also recently completed his business law certification through Cornell. Michael's journey with Wilson Daniels began in twenty sixteen when he joined as a senior grand manager and director of Italian estates playing a pivotal role in expanding the company's portfolio, in Italy. In twenty twenty one, he became the director of e commerce and portfolio development, and he was promoted to his current role of VP in twenty twenty two. Michael is a proud Sonoma County native and Italian American currently residing in Hill bird with his wife and two children. So welcome, Michael. It's so great to have you here. Thank you. Good to be here. Good to reconnect. Yeah. Absolutely. I was gonna say this really feels extra special because both our families have such long histories in Sonoma County and have done business together so many times over generations. Right. So it's like full circle for us to It is. It's pretty special. It's pretty special. That's one of the things I love about wine. Always comes around. Yes. Absolutely. So before we dive into today's discussion though, Michael, could you tell us a little bit more about your background and how you came to work in the wine business? I come from a long line of retailers. Both sides of my family came to United States from Italy. My father's family specifically came to Sonoma County back in the nineteen twenties and started a grocery business, which lasted about ninety years. So I I kinda grew up in that world stacking boxes and pricing items, and working behind the delicate test encounter and and wine and food always played a big part of the business, but also it extended in into our home and just everyday life. So I was always interested in in wine. Why things were different? Why? Why do things taste different? Why do, you know, different grapes, different rhinos? So and growing up at Sonoma County, you know, being around vineyards literally, you know, it was always intriguing to me. But I credit kind of my relatives and my work at the store from being, you know, really driving me to flying business. Yeah. And it was a great store. I really miss it. It was like the best selection of the tolling goods around. Yeah. It was a lot of fun. I missed part of it. Yeah. Well, in this episode, we'll talk to Michael about his insights working for a leading importer and wholesaler of high quality wines and spirits whose portfolio includes some of those premium mains of wine, like Gaia, Yonesanti, and Benante, and Italy, and Romanique Conte in France will also discuss his experiences working with family owned producers worldwide, but especially in Italy, and learn how his team really adapts to shifting market dynamics while maintaining the company's commitment to long term partnerships. So our three key takeaways for today's master class and what we're excited to learn from Michael in this episode are how Wilson Daniels really curates and develops a strong portfolio that resonates in the market. How they adapt to the changing marketplace, talking about distribution challenges, inventory, restaurant lists, digital, e commerce, and also some emerging trends and technologies shaping the industry in the coming years. Let's dive in, Michael. Obviously, you work with some very Ultra premium brands, but your portfolio is actually quite diverse. So how does Wilson Daniels identify and select Italian wineries for its portfolio? To ensure they really resonate with the market and and stand out in such a competitive industry. We look really, you know, first, obviously, quality's gotta be there. But as we look at our portfolio and as it evolves and develops, we, you know, specific to Italy, we're we're not you know, rarely do we duplicate a region or a province or an Appalachian. We really try and find the best producer in that region and go all in with that person or that family. Family is very important. We don't like corporate wineries or wineries owned by a board. We we work directly with families. And that's very, very important. We like families that are farmers. They own the land. They live in the in the land. They They grow the grapes, they make the wine. Those are really, really key elements to what we look for. And also kind of the long term approach, you know, they that we you know, most people in the United States, we're we're looking at the next quarter, you know, what what how we're gonna perform in the next three months, the next six months. But in Europe, Italy, particularly, you know, they they look at the next ten, fifteen, twenty, thirty, a hundred years. So, you know, we look for partners that have that long term vision. Along with realistic goals, you know, where do they wanna go? Where do they wanna be? All of those, you know, kind of work together. It generally is it's a great match. And I'm I'm proud to say we brought on incredible wineries and we really have retained, most of them. And, obviously, like I mentioned, you have some pretty big names, but one of my personal favorites is Elena Walk. So I was so excited to see you guys bring. What a great family? Yeah. Very good family. Great. I'll tell Adi Jay producers. Yeah. Definitely. And so you mentioned though you don't like to duplicate regions or provinces, but is there a specific region that you're really looking to bring on board? Or do you look first more at the family dynamic and the business dynamics, and then the region is secondary, or are you trying to kind of hit some targets with regions too? Yeah. We look at regions first and then kind of dive into the, you know, the, the leaders in those markets and see, you know, with that, I think there's, you know, volumes of wine production that we look at too if we're bringing a brand in nationally. We have to have, you know, subsets there to kind of fill the marketplace. But we do, you know, we do have some duplication, say, in barolo where there's stylistically, there's subregions within barolo. It's very much like burgundy. Or you can you could have three, four, five producers from that same region, but they have different styles of wine and maybe different aspects, different vineyards. So that works. Montalcino is another another region that's very dynamic, brunellos, There's sub zones and micro climates. So we do work with three different producers, different price points. And so there is some duplicate regional wines and application or app ab abilations, but for the most part, we really try and just focus on on one great producer. Yeah. And so is there a particular region that you're not in yet that is of interest to you at the moment? Yeah. I mean, you know, I love wines of Kopania, wines from puglia, Calabrio in the south. We really don't have a major footprint in the south, yet. I mean, god, we work with three different, wineries in Sicily, which is one of my favorite places in the world. But, you know, looking at some of those other parts of Italy. Also, you know, being with liguria and my family, both sides comes from liguria. I love those great white wines from liguria. Not a ton of traction in the market, you know, across the states, but I love that region too. We're not there. So Good for Italian wineries to hear some places that you're that you're looking to to break into. So let's talk a little bit about distribution challenges, which are a big part of what's happening for us in the US right now. Can you identify what some of these really are and how Wilson Daniels has adapt what they've implemented to adapt to these challenges? Yeah. No. It's very challenging. I mean, we, we're fortunate, you know, we, we have ownership. Underwood family that's very committed to the business. And back in twenty fifteen, they invested in in their own distributor, being the former owners of Young's market selling that business. They, by nature love distribution. So In five markets, New York, New Jersey, Connecticut. We have Wilson Daniels wholesale. So we have, you know, direct partnership with the distributor in that market. And then later, a few years later, they purchased Galaxy One in Oregon, which also expanded into Washington. So we have five markets where we're essentially direct distribution. So we really have a lot more collaborative control in those markets, which has been fantastic. But in general, the whole market, really, since COVID has been kind of upside down, you know, inventory management has been really challenging. It's like the accountants have taken over some of these big distributors and have really focused on lean, lean inventories. Costs have gone through the roof, whether it's, you know, warehousing and trucking, I think probably, you know, with inflation and fuel costs, you know, logistics. We obviously break a lot of of product in from Europe, from Western Europe. So just getting goods on containers has been, you know, changing, challenging, from from that standpoint, but one big thing that we implemented about a year ago specific to Italy was we witnessed, you know, we we push a lot of our markets and promote direct importing. So we will facilitate orders. From wineries in Italy and coordinate the the sale directly to the distributor versus the wine coming to our warehouse in New Jersey and then our warehouse selling the product to shipping it on truck to different distributors. So it's we've seen challenges where winery, you know, one winery might have the wine ready for you tomorrow, and the other winery might take two, three weeks. So we've created a consolidation warehouse in LaBoro Italy with our logistic partners in Italy, and we have now inventory in one location. So it's it's much easier for the product to be ordered and shipped to distributors in the market. So that's been one of the solutions to kinda get through some of those challenges. That is so great. And I think consolidation becomes so I mean, talking obviously about these large distributor shipments, but even when we talk about direct shipping in Italy, you know, it's hard to get it over here to the US and consolidation could be a good answer for that. Too. For sure. For sure. The nature of our portfolio is, you know, dirt quality wine. So we wanna make sure that the wines are stored correctly, and, the travel is is done in a way where the refrigerated container. So anything we can control to get the product to the end consumer is the best thing we can do. Yeah. Absolutely. So, okay, let's shift a little bit now also since you were so heavily involved, with e commerce for a while. Can you share some successful case studies or examples of how Wilson Daniels has really effectively navigated this shift towards digital platforms and e commerce. Sure. Sure. Yeah. Yeah. Another thing, you know, that was out of COVID was, you know, everybody was at home and doing things like this, getting online and talking and and sharing, you know, events online. Everyone from restaurants to retailers was, I think getting very, very creative. And that that really gave the company force the company to really kind of share a lot of information. We have a lot of great stories. We have a lot of great imagery, videos, content, and we have a lot of things on our website, but there's so much more that we needed to share, and a lot of it was literally spread all over the place, whether it was on somebody's computer, on a thumb drive and somebody's desk, or, you know, in a, in a shared drive somewhere on a server. So We invested in, PIM software called Salsify, which is a product information management cloud, where it's essentially a source of truth for all of our brand marketing content. And we've used that to to also publish downstream through digital connections to other retailers and distributors so we can share information essentially with the flip of a switch, which is great. We can, you know, we can really make sure that the proper imagery, whether it's a label or picture of the owner is actually, you know, properly being distributed, and we can also edit content pretty quickly on the fly. So that that was a big, big investment. That's also kind of spurned into also a new website for the company, which will debut early in twenty twenty five, which will have a, you know, another robust set of tools. So aside from the PIP software, we did invest in an e commerce platform for our wholesale team, which, has been it's proven to be a great tool for, our customers in the New York, New Jersey, Connecticut markets to manage the business, go online, pay bills, they can order products. We've also begun to target accounts with emails and try and alert them to, you know, wines that we have, you know, in stock or wines that are about to go out in stock. So we're kind of just scratching the surface there, but it's it's been a great direction. So I have two follow-up questions. So first, does that does the ability for your wholesale clients to to take their ordering and stuff online? Does that did you see an uptick in reorders? And does it kind of, like, do away with the need to physically call an account so often, or are you still complementing with those with those physical calls? It it's purely complimentary. You know, we see it being used as a lot of reorders. You know, the nature of our portfolio is such where and the people we have on the street have such great relationships with with owners and songs in the market that, you know, they they like to see the people. They pull a lot of quirks. We taste a lot of wine. So it's it's not really, I would say, dramatically shifting the way we go to business. It's just purely compliment. Yeah. Ease of use. If I were, a buyer, I would absolutely want you to come with your bottles of, you know, Benon Sure. Benon's kids would be on good. Yes. Exactly. So my other follow-up question to that though is you mentioned the PIM software that you're using, and you said it was a big investment. So is this something that potentially a smaller, you know, maybe a winery that's producing, like, sixty thousand bottles could use to also be able to generate, you know, organize their content and share it more easily, or is it really more of a big budget item? No. I I think I I think the cost is not prohibitive to, you know, a midsized winery or or a smaller winery. I think it's super useful. I think it depends on kind of where the wines are going. If, you know, we're not a huge chain business. You know, we don't we do business in in in a few chains. We have districts of major distributors that have robust e commerce platform. So it's it's worth the investment there. It allows us to really kind of organize and also there's a public facing digital catalog that people anywhere with the link can see. So I would say it's probably something that's pretty digestible for even a smaller winery. Great. That's good to know because it is helpful for wineries too to be able to quickly generate this content and provide it to trade and and all of that. Okay. So let's talk a little bit more about trends now and balancing trends with strong brand identity. So how does Wilson Daniels do this? How do you stay ahead of industry trends that also, you know, maintain the consistent identity of Wilson Daniels? Yeah. No. It's true. I mean, you know, it's all about for us. I mean, you get really centers on the core values of the company, which haven't changed over the years. You know, we're all about quality. We're all about transparency. You know, there's always we feel, you know, a place for fine wine in the market. You read all kinds of things about what, you know, younger consumers are drinking or not drinking, and, obviously, very important to to to watch, but we definitely follow all of the the big number data, the IRS, the SIP source, which has been great, because that's generated by, by, retail account data that's been through the distributor. So we can really get a really good idea of what categories or shifting and moving and price points. So that from a very top level is great, but I think the best advice is just being on the street talking to the buyers. And I like to sit in a restaurant and I'm kind of weird like this. And I sit in a restaurant, and I like to look at the tables and see what people have on the tables. Are they ordering glasses? Are they ordering bottles? Are they drinking beer? Are they drinking spirits? So it's really interesting to see. Yeah. Absolutely. I don't think that's weird at all. I regularly it's instead of, like, people watching, I'm, like, beverage watching. What are you ordering? What's coming out? So have because you do work with such premium brands and premium wine isn't really, being affected by, you know, downturns and consumption the way the way other wines are. Are you seeing any of these? Are you seeing a drop in consumption? Are you seeing a drop in ordering and all of that? Or are you staying pretty leveled because of the the caliber of your of your portfolio? No. I mean, it's definitely I mean, we're there's definitely challenging times out there. I mean, we have very collectible wines that, are in high demand, just, you know, despite any economic up or downturn. Which is great, but for sure. Yeah. We're definitely seeing, you know, there's sort of a sense of caution on the market, you know, in the distributor level, holding inventory from the restaurant, you know, holding inventory, shrinking their lists down, a lot of retailers, you know, used to buy big money to finance their businesses was very cheap. Now it's quite a bit higher. So there's definitely been a kind of shrinkage, if you will, in the market of of really taking a position in a line. So, yeah, we're definitely navigating that for sure. Yeah. Nobody along the route of the chain wants to carry risk. So they're all being more conservative with their ordering and their Yeah. Well, one thing I would really also love to talk about is some smaller brands, because we've mentioned again, you are nationally in the US, but what does Wilson Daniels do to support and foster the growth of some smaller up and coming wineries? You know, well, a great majority of our brands are are pretty small in the context of, you know, we import less than, say, ten thousand cases, in a lot of these brands, maybe even less than that. So their volumes might be low, their value might be high, but, you know, we put them in a position where, you know, we can give and gain value by grouping. So it kind of, you know, an Italian brand, you know, being in the shadows of Beyond DeSantis and and at a table of Nextangelo guy up forty one. You know, that brings a lot of value. So there's, you know, there's that, quality by numbers. We've, you know, gone to the market with portfolio tours, with, you know, we do a lot of traditional tastings and library tastings in the market. We've also invested a lot with the wineries in bringing customers to Europe, bring them to the vineyard. So, you know, trips, and those experiences have been been a huge, huge value for even some of these smaller wineries that that don't like might not see, you know, the, the, the traffic that they would outside of being in the Wilson Daniels portfolio. In addition, you know, we've got some of the best accounts sold in the market. When you represent Gaia, when you represent Raleigh Clante, you have access to the the best restaurants in the country. And you know, those relationships also help the smaller brands or maybe less known to get, you know, some attention in those accounts. Yeah. Absolutely. And I think the the fact, like you said, you're bringing people to them is like there's no better way, I think, to make a brand unforgettable than to bring somebody to their property and just hear them talk about their passion for their land and their commitment and all of that. Sure. When you're with the Venates and you sit at their kitchen table and you're, you know, looking at Aetna and drinking the wines. I mean, you're gonna remember that forever. And those relationships that occur and foster, you know, we we hope that that stays on with that individual for forever. So we invest a lot in in in, in trips. Yeah. That's fantastic. And also maybe helpful for those smaller wineries that don't necessarily have the budget for, you know, long or multiple trips abroad. So it helps. That's right. Yeah. That's great. So how then does Wilson Daniels approach marketing and education to really inspire this passion for wine? Well, you kinda answered that a little bit already, but just to promote this distinguished portfolio that you have to both trade and consumers. Sure. Yeah. Yeah. It's kind of like I mentioned before, you know, we do pretty much a traditional fine wind marketing company. We pull a lot of quirks. We do a lot of great dinners and lunches, invite some of the best trade and press But we really have a three pronged approach. You know, we have relationships with the press. We have a really robust PR team in house. We have relationships with the Psalm community. So we have, you know, over thirty reps nationally in the marketplace that are on the street that sell wine. They're not just at their desk managing distributors. They're in the market, and then we work with the collector community as well. So those three areas are areas that we we really, really go after. We have, an approach to the market in the spring and the fall where we put a lot of budget toward a, luxury tastings. One in the spring, one of the falls, where we go to market with just some of the the true gems from the book. Maybe it's a new release line or a line we get a small amount of and we show that to the market, and we do that across the country. So that that brings a lot of noise to the market. We generally are a heavy on premise company. So we really capture a lot of that marketplace, but we do, you know, for a brand that's got a lot more scalability, and and we've done a great job growing. It's been, you know, Visol and Jayo Proseco. And with, John Luka Bizol and Linelli Family ownership, we've had an incredible partnership over the years. And a year ago, we did a tour across the country, leveraging, relationships the winery had, leveraging relationships Wilson Daniels had, along with the same sort of quality and image with using Alfa Romeo and Toming Jeluka Bizol Drive through the country, making tour stops, and pouring prosecco and talking about prosecco Superior. And then also with Kipton Hotel, which is one of our, you know, larger customers. So, those sort of collaborative events make a lot of noise and help the products in the market and also touch a lot of points for touching restaurants, we're touching consumers, and we're we're also touching the press. So Yeah. And I love these, like, nontraditional collaborations that invite maybe nontraditional consumers to learn more about wine. So, like Sure. Yeah. Absolutely. You gotta stay creative. Yeah. Yeah. And I have to say I love the, basil Cortice is, like, one of the most beautiful sparkling wines out there. Yeah. So let's talk briefly too because you did mention that you work you have, like, a pretty good stronghold in collector community. And what is that really looking like right now? Like, what what are they tending towards? What is, you know, is is it all still the same big players that it always once was? Is there anybody that's, like, you know, any particular region that's emerging amongst collectors? The collector community and kind of en masse has really, you know, really centered around Burgundy, traditionally, burgundy and probably in the past board, though, with Burgundy being front and center. And, you know, the costs of Burgundy has gone through the roof, and it's still attainable to to a lot of these people in the collective community, but they're also shifting to other areas like Barolo, where It has, you know, Nebula has such, power and dynamic tastes and profiles and ageability. You know, that collective community has also kinda dipped their toe into places like Barolo. And then I think you're seeing the younger collector being a little more adventurous and also being probably a little more travel outside of the traditional places for wine, and they're going to other parts of the world, they're going to other parts of Philly and France. So They're, they're going to regions like Sicily. They're going to regions like Calabrio. They're going to places where their parents maybe stayed and just went to Burgundy or just went to Mordo. So so it's it's interesting out there. I think the collector community is definitely changing, and I think we'll probably see a larger shift, but it's a good shift. I think there's gonna be, you know, a more open minded approach to to collectors. That's great. More curious. So you're seeing, like, amongst the the younger up and coming collectors, just more curiosity in general. For sure. More curiosity and expanding outside of the traditional box. Well, that is very exciting for Italy because Italy can offer a lot of out side of the box options. Sure. For sure. For sure. Well, Michael, thank you so much for all of this incredible insight that you've given us as we start to wind it down now, which time for our rapid fire quiz. So we ask our guests three questions to help really, solidify the, the lessons of the episode and help our listeners better understand the US market. So please just try to answer in a couple sentences if you can. But what is your number one tip for mastering the US line market. I think, really, number one tip would be really pricing and positioning. Really, it's kinda core marketing, some of the marketing aspects, really know, know your competition, know the pricing, really do your research, and really, you know, make sure that you know the category. Yeah. That's great advice. And what is something you would have told your younger professional self about selling wine in the US? I think two things really being patient you know, really the patients, I think, the younger me wanted immediate answers, immediate action, and I think being patient and fostering the relationships. I think we started this this discussion with relationships. You and I've known each other for one time. Our family has known each other. And just, you know, those relationships are really key, and many of them go beyond just the base of business. So I think relationships and patience. Yeah. And isn't that fantastic, you know, as as business and the world in general modernizes Like, we still have this really an incredibly important element in the wine industry of, like you said, relationships and this face to face aspect that there's just no replacement for. Yeah. Okay. And number three, we all do a lot of travel in the wine business. So what is your favorite travel hack when doing market work. My travel hack, and, you know, I like to stay in shape when I'm out there. So I love going when I'm in these big cities, it's usually a core power yoga. And so visit the core power yoga. Generally, when you're the first time you visited the core Power yoga in that specific location, you usually get a class for free. So that's that's my tip. Yeah. Good to know. Good to know. And you got a really care yourself or those, like, you know, six, seven hour Italian meals. So You do. So that helps. Move around a little bit first. Yeah. Yeah. That's right. Michael, again, thank you so much for all the insight you shared with us today for joining us here. How can our listeners connect with you? Well, you can find me on LinkedIn. Just my name. There's not a lot of Michael Traversos out there, but, you can find me on LinkedIn or you can find me on Instagram. I'm and my handle is Traverso style. So you can hit me on there. I'll respond. Fantastic. And we can put those in the show notes too. So, again, thank you so much for being here with us, and I hope to see you soon, whether it'll Yeah. From County. Yep. Sounds good. Thank you. Take care. And that's a wrap for this episode of Master Class US wine market. Thank you so much for joining us. If you enjoyed this episode and want to stay up to date with the latest industry trends, remember to like, follow and share our podcast. And if you find value in our conversations, please leave us a review to help others discover the show and grow our community. Stay tuned for new episodes every Monday. Until then,