Ep. 542 Dave Parker | Wine Business Talk with Colangelo & Partners

Welcome to the Italian wine podcast's wine business talk series. Every Thursday, we will be connecting with our Italian wine podcast listeners all over the globe on all things wine and business. This podcast has been brought to you by Colangelo and Partners, the leading fine wine and spirits agency in the US. Visit Colangelo and partners at w w w dot calangelo p r dot com. Hello. Welcome to wine business talk on the Italian wine podcast. I am your host, Juliana Colangelo, vice president at Colangelo and partners. One of the first steps to selling your wine abroad traditionally has been finding the right importer. Can be difficult and time consuming to find the right partner to bring your wines to market. Today, there are alternatives to the traditional import model including fine wine retailers like benchmark wine group who are selling direct imports. Today, our guest is Dave Parker, CEO of Benchmark Wine Group, leading seller of fine and collectible wines in the US. Benchmark is expanding into the import space creating direct selling opportunities for imported wines in the US. Dave and the benchmark team also work closely with the wine market journal, one of the world's premier resources for wine market trends. So Dave, welcome to the show. Thank you for being here. Well, thank you for having me, Jilliana. Yeah. We're really excited to dive into today's conversation. But before we get into it, describe for me your perfect vacation day in Italy. Let's let's daydream a little bit. What would you be doing and what wine would you be drinking? Wow. That's a hard one, but I remember a day in Boulder, after wandering a beautiful vineyard and looking at, another one up on the hills, going down to the coast, staying in a in a lovely resort, watching the sunset, and having a a wonderful seafood and Bisteca meal on the sea coast. Perfect wines in that kind of scenario for me would be to start with a Vermentino and then, of course, the San Diego of AZ. Wow. Sounds beautiful. Hopefully, that'll all be us one day soon. So just to dive right into it last episode, we spoke with Avino founder, Haina Zachariasen about democratizing and demystifying the wine buying process for consumers through technology and peer to peer marketing. Today, we'll take a step back in the distribution chain and talk about bringing wines into the US market and how retailers like yourself and the team at Benchmark are starting to import wines directly. So for context and just to get started, tell us a little bit more about Benchmark wine group. Benchmark wine group was founded in two thousand two. But we are specifically focused on rare wines, collectible wines, hard to get wines, boutique wines. We've grown to become the largest retailer in the country in that space with tens of thousands of collector customers. And we've had a distribution and import license from the beginning. And we, we sell to the trade, most of the Michelin Star restaurants in the country, our customers of ours, as well as some of the the finer rare wine shops. Got it. So you've had an import license since the beginning, but have you been importing wine since the company was started, or is that a more recent endeavor? Well, we've been importing mainly from brokers, mainly rare wines, back vintage wines, from the beginning, but starting in about two thousand eighteen, we've begun importing specific brands starting with, wines from the Piedmont, but now we're talking to people all over Europe. Got it. So what are you looking for in the wines that you're importing directly? We're looking for very, very well made wines that are looking for hand entree into the United States or compatible import situations with ones that they may already have. The perfect wines already have a reputation founded either in Europe through European reviewers or in the US. Or very top winemakers and a very solid story that appeals to collectors. In that latter case, we can put together a special marketing campaign for them, brand building campaign working together with Colangelo to sort of finish the job of making the wine very attractive to the US market. Got it. Great. And what is your process for going about finding direct imports? Yeah. So we've been meeting with a number of brands that have expressed interest. Colangelo has connected us with a few other contacts that we have, but we have such a reputation in the US market that a lot of folks that are familiar with the high end of the market and some of the very top brands naturally come to us. Right. That that makes a lot of sense. So what effect if any last fall's twenty five percent tariffs on a lot of EU wines have on on your pricing and your business? Yeah. It they had a major effect mainly for French wines other than Champagne, also to some degree Spanish wines and German wines. Fortunately, Champagne, as I say, are exempt, as our Italian wines. So we've seen the demand for those particularly go up. Prices in those other areas have gone up, which is chilled the demand a little bit for those French and, German and Spanish wines. Right. Right. And we'll see what the future holds, but hopefully things will will change in in the coming months. So talk to me a little bit, you know, about the benchmark direct import model versus that of a traditional importer. What are the main differences that you would describe to a potential supplier. Yeah. Well, we've we very much care about the brands that we bring in. And since we're the only intermediary between the producer and the consumer or the producer and the restaurant, we can bring the pure message in both directions, taking the producer's message to the consumer, taking consumer, and restaurant response back to the producer. You can also help them build their brand if they have not done so already in the United States. Selling in the US to the high end of the market does generally require a very solid brand and that generally includes good reviews, although those can be European reviewers, or Americans requires a a good solid presentation of the brand and why it's unique. So we we would provide all of that. But we also provide sort of bespoke service into regions where they may want to go. They may already have an importer that takes it to restaurants in one part of the country. We can take the product the other parts of the country or they may have a contract that does not include direct consumers. We can add that to an existing relationship so we can build the pieces that people are looking for, mindful of what they may have already put in place. Right. So it could be seen as an an add on or an addendum to an existing, you know, import strategy to reach a different market. I bet that the direct to consumer piece is particularly interesting for international brands and wineries That's not something that is as common to be found in this business. Have you seen more interest in that side of things specifically the direct to consumer piece? Yes. Absolutely. Especially now during COVID with so many of the restaurants being closed. And some of the main walk in shops also either having restricted hours or being closed. The direct to consumer portion of the market is what skyrocketed here in the US. So we've seen that grow thirty to fifty percent overnight and restaurants right now are kind of on pause. Not all of them, but a number of them are. Mhmm. Slowly coming back. Starting too. So switching gears a little bit, you know, throughout this series, we're talking a lot about technology and how new forms of technology and existing forms can help wineries reach their consumer. And you have, a very long background and former career in technology. So can you talk to us a little bit about how your back around on technology has influenced the way you approach the wine business? Yes. I my first career was in the Silicon Valley, and my degrees are in computer science and in engineering, and data science, has become very important to the handling of rare wines where particular values, particular scores, particular messages need to be linked two particular wines and where we're bringing through thousands, tens of thousands of brands every month. Each of them needs to be associated with the right information, both for consumers, and as part of the pricing process, So that's a that's a key area. We certainly use it. We have a fully integrated software package that we designed and developed that runs every aspect of our business from initial contact and purchasing all the way through sales, inventory management, shipping, and tracking, and customer feedback. So that's been very important to us too. And I think it's important to any modern reseller that's going to operate at the national level as we do to be automated and to be very data focused. So data driven technology that allows you to really manage inventory also manage your customers and your client base as well. Yes. Exactly. So you and your experience at benchmark and and you'd mentioned before that direct to consumer really skyrocketed in in twenty twenty, are consumers buying more wine online generally, you know, beyond benchmark as well? And, you know, how do you see that lasting in into twenty twenty one and beyond, is it a lasting trend? Or do you think that's something that was just influenced by the pandemic? Well, I think that, those of us that had a ability to ship directly to consumers and had all of the right infrastructure at the beginning of the pandemic have seen great growth. And if we had large consumer customer bases, which we do, I think some of the retailers that did not have that capability, certainly the ones that only had walk in capability have not participated in that growth, and they have even seen a downturn. But for us, as I say, probably our our direct to consumer web based ordering is up perhaps fifty percent. And we expect that that'll continue. We expect that people now are learning to enjoy wine at home. It's not necessarily something you have to go out to a restaurant or a wine bar to enjoy. And people are probably moving up market a bit They're they're not spending that money on a restaurant experience. They may be doing takeout or cooking themselves. Explore a little bit more on on the wine that they drink. That will continue to. So you also work with the wine market journal, which is a great resource for wine market trends. So can you talk to us a little bit about some of the most surprising consumer demand trends out there in the US market as it relates to Italian wine? Their region or variety we're not paying attention to that we should be? Yeah. So the wine market journal is the worldwide resource for auction valuation. Trax pretty much every auction house, both online and live. In the world and tracks and keeps track of all evaluations of all lines traded. It's absolutely key for benchmark in terms of making purchase decisions and valuation decisions, trends that are, I think, surprising right now. It's not surprising that Italian wine is way up. Champagne is way up because people are gravitating toward that because of the lack of a tariff into the US. Other prices are up two, but, not in conjunction with increased, purchasing. In terms of the regions of of Italy, certainly Piedmont Tuscany, Bulghary, are still the darlings of the high end collectors. But we're seeing a lot of demand from Sicily, let's say. The amount Aetna region is particularly exciting, I think, to people. But it's pretty hard. Italy is one big vineyard, and it's really hard to find a region of Italy. It isn't really in demand right now. It goes so well with the different cuisines. And, you know, for casual consumers all the way up through collectors and even investors, we're seeing more regions all the time. Yeah. But, certainly, the brunellos and the Barbarescos and the Barrolos, the three ps are the, and the Supertuscans. Are the sort of the top of the market. But really, you're seeing opportunity for wines from the entire country, it sounds like? Absolutely. Especially for drinking quickly, but the lot more very high quality wines being made that can age and and will benefit from aging. Right. Right. So another question, you know, I'm back to thinking about trends as it relates to the pandemic. You know, we read a lot about this term comfort wines that consumers were turning to wines that they already knew and brands that they trusted during the pandemic and when they were shopping online, obviously, there's less of an opportunity for the hand sale. So they're turning to the brands that they know and trust. Did you see this at benchmark and an among your clients? Not so much. We maintain a full sales and customer service team that interacts with customers and may provide, you know, that hand selling service that they were staying at their favorite wine shop, which they may not be able to get anymore if they're not going into the wine shop. We've seen continued experimentation. As I mentioned before, we've seen a lot of people go up market, buying higher end wines, But I'm sure there is a trend that you described. People do in the lack of being able to shop at a a well stocked shelf or have a wine professional talk to them. I'm gonna stick with what they enjoy. What we are seeing is People that formally were drinking beer are now drinking wine, and we don't care what wine that is as long as they've made that jump. And the people that maybe had a bottle of wine, with a holiday or a weekend, now we're doing it every evening. That's a great trend. And some number of those are gonna move up market and and and be drinking types of top end wine that we sell. Right. Absolutely. So, you know, you mentioned more people buying wine online, people drinking more, people trading up are there any other trends or predictions you have for the future of wine consumption in the US market? Yeah. I I think it it will continue to go up each time we've seen an opportunity like this where more people get exposed to wine, whether it's back in the old days, wine coolers instead of beers, you know, or inexpensive wines like Charles Shaw, have brought a whole new class of people over from other beverages into wine They don't seem to ever leave. I think people, when they discover wine and discover the the levels of quality that are available, they continue to explore for a lifetime. They don't suddenly wake up one day and say, I'm gonna stop drinking wine and go back to, you know, to, Budweiser, you know, Right. Well, that's what we hope to to see continue. So a really positive outlook that I think we can all appreciate. So thank you so much for being here today, Dave. Is there anything else that you'd like to share before we wrap up? Well, again, I would say if a a producer is interested in talking about importation, they can reach us through you or at the benchmark wine site benchmark wine dot com. If they're interested in the wine market journal, that's wine market journal dot com, and we would love to work with the the top brands that are interested in finding out more about what we do. But, likewise, if you're looking for any rare wine, we have over ten thousand at any given time in stock from all over the world. So always available. Great. That's awesome. Thank you so much, Dave, again, for joining us. And to our listeners, benchmark is at benchmark wine dot com. If you're interested in learning more about opportunities with direct import or for purchasing some some great wines, So join us next week. We'll be on with Aaron Sherman, founder and CEO of seven fifty. And thank you again for tuning in. Thank you, Juliana. See you again next week on the Italian One podcast for another episode of wine business talk brought to you by Colangelo and Partners. For more information on this series, you can visit Colangelo and partners at w w w dot calangelo v r dot com. And remember, to rate our show wherever you listen to our podcast.