Ep. 557 Aaron Sherman | 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'm your host, Juliana Colangelo. One of the keys to building a successful wine brand is building relationships with the trade to get your product onto shelves and on wine lists. Today, we'll speak with Aaron Sherman, CEO and co founder of seven fifty, the largest online marketplace for wholesale wine and spirits in the US. For wineries and importers connect with distribution retailers, manage product content and share up to date brand profiles with the trade. Welcome to the show, Erin. Thanks for joining us. Hey, Juliana. Thanks for having me. Absolutely. So before we get in today's conversation on technology and wine in seven fifty, know, Italy originally inspired you to get involved in the wine industry from from what I read and what I hear. So can you tell us a little bit more about that? Yes. That is true. I studied abroad in Italy during my second year of college. Which is actually where my co founder and I didn't meet, but where we kind of formed a bond and and actually both formed a bond around Italian wine and food in the role it plays in the culture out there. And we luckily befriended a group of Italians out there that were huge foodies and wine people. And I remember they introduced us to a bottle of Pojo de so to Brunllo Dimontalcino, and that was the uh-huh moment for me. I think Virginia Franco as well. And, we were determined after that experience to come back to the states and and work in the industry. It was a great story. That's that's incredible. So here we are today in the Italian wine podcast, so very fitting. So we're super excited to have you here. So throughout this whole series, we're talking about how wine aries can better use technology to reach their audiences, both trade and consumers. So today, we're gonna be focusing on the trade. So to start off, tell us a little bit more about seven fifty. How does it work? So seven fifty's mission is to power a connected supply chain in beverage alcohol. And the way that that has manifested is across a few different products that are all kind of interconnected inside of a a single technology ecosystem. So the core of it is a marketplace online between alcohol distributors and the buyers in wine shops, restaurants, liquor stores, bars, and it gives the buyers the first really comprehensive view of everything that's available to them to buy from distributors in the market, and it lets them order efficiently across all of those distributors. And then for the distributors, it gives their sales reps a set of tools where they have access to content about the brands they're selling and let them kind of organize their sales process and communicate relevant information and make proposals to their customers in a really efficient way. And and these things all operate on the same technology. So it really streamlines the communication process. And, you know, that's reached a lot of people in the trade at this point. We have over a thousand distributors across the US that are on the platform. You know, over a hundred thousand buyers in retail that have access to it and use it for search and discovery and placing their orders online. And more recently, we've built a access point for importers and wineries to around five thousand of them that are using it at this point, and it's really a streamlined way for them to get information about the US market, kind of understand state by state what is being sold by who, as well as a more streamlined way to kind of communicate about their their own products and get that information into the hands of the people who might be selling it and ultimately buying it in retail. Right. So, yeah, we we all know how complicated America's three tier system is, especially for for wineries and importers that might be operating outside the states, for example, in Italy. So it sounds like what with seven fifty is doing is making the communication and information all streamlined in one place and and digital as well. Yeah. Here in the US, as as is the case of thinking most of the rest of the world, much of the business was run on pen and paper. And I think we were one of the first companies to come in and build some kind of modern web technology around digitizing all of the information and and digitizing the the buying and selling process. Still a lot to do. But, the lots of progress made. Definitely. I think in this last year too, I mean, everyone's we've all the industries woken up a little to the power of digital and and how important it is to to digitize a lot of our processes and systems, but seven fifty was, is ahead of the curve in that, in that game. So how can Italian wineries utilize a tool like seven fifty to connect with some of the key players in the system, the importers, distributors, and buyers? You mentioned that more wineries and importers are using the tool these days. So tell us a little bit more about how that works. And you kind of touched on the complexity of the supply chain out here. So, you know, as a winery, they have to find their importer. Maybe they find a national importer. Who can sell their product to distributors across the country or else, maybe they're having to find multiple importers to get that national footprint. But once they're in the US by way of the regulation, they're gonna be needing to work with fifty or more distributors in most cases to get a national distribution footprint. And then it's really the the role of those distributors to go out in the market and and sell their product and represent their products to the retail buyers. And so we think about how to increase the efficiency of the process for wineries to get that information and get visibility in front of distributors and buyers. And that's kind of the unique value proposition that we can offer on seven fifty is that we have this large audience of kind of the key players that they need to reach in order to sell their products in the US. And so there are tools that let the wineries go in view each state, see exactly who the distributors are that are selling there. What is the make up of their portfolio? It's a way for them to identify markets or maybe there's an opportunity for the types of products that they're selling. Or perhaps distributor portfolios that would be the best fit for what they're selling, as well as just understand competitively what's happening. And then once they're in the marketplace, they have tools to be able to kind of own their marketing message to the retail buyers. And making it the information that's getting consumed by those buyers when they're in seven fifty, but also the content that's being used by the sales reps at distributors, is all kind of managed by the wineries themselves. So that may they have all the right vintages and pricing and technical information about the wine is all updated in one place. Yeah. And it even goes further. They can if they have, informational one sheet that's brand new that they wanna make sure everybody has the consistent information about, they can put that on to seven fifty once, and it's automatically disseminated out into the market across all distributors who might be selling their products, you know, any retailers who might be viewing it in the marketplace. They can upload twelve talkers. If they have an e commerce, design asset that they wanna make sure gets on the e commerce stores of retailers. They can put that out in there as well. So it's really kind of a comprehensive content management and distribution tool. Very cool. That's great. So, you know, prior to the pandemic, a lot of the communication you're talking about when sometimes happen at these big trade shows. Right? You you walk around and shake hands and look for maybe buyers and distributors to connect with for your brand. So with all of that shut down in twenty twenty and still shut down, in this first half of twenty twenty one, how is seven fifty helping US wine buyers discover new regions, wineries, and products? So there's a couple different touch points where where we help with discovery. I mean, the primary one is inside of the marketplace where a lot of what we help the distributors with is making sure that all of the technical attributes about their products are kind of complete. And so it allows a buyer then to go in and say, I'm searching for Montipulciano, but I want a three hundred and seventy five milliliter bottle, and I want it to be biodynamically farmed grapes. Show me everything that's out there in the market that kind of fits the criteria of what I'm searching for. And then there's all the content that I mentioned on top of that. So they can really educate themselves about the producer stories, the specifics of a vintage, and then they have the ability, of course, to connect directly with the distributor who's selling that. Set up in a in for tasting or replace that order online. So none of it has to happen in person. And also, you know, we have a a publication seven fifty daily, and also beverage media where we do a lot to try and tell the stories of the people and places and trends happening within the industry. And so it's become a really strong channel for wineries and imports, really anybody across the trade to be able to, you know, engage with with us and and get their story out into the market. Yeah. Absolutely. Did you see an increase in usage or or people just spending more time in the marketplace on on seven fifty during COVID and and over the last year? Absolutely. We saw a major growth in the amount of online ordering that was happening through the platform. You know, we reached nearly a billion dollars of order volume that passed through the marketplace over the course of twenty twenty, but we also saw deeper engagement from distributors and importers and wineries because this became kind of a central selling tool to make sure that they could stay connected to their customers, continue making proposals, pushing information out that was relevant to those customers, And then, of course, having that kind of streamlined way for the for the buyers to place their orders or or get more information themselves. You know, you obviously saw a decline in the in the first months of the pandemic from the on premise and had much heavier engagement from the off premise as they were, you know, their sales were soaring, as everyone was indulging in more at home drinking. But we've, but we've begun to see that rebound from the on premise, which is so exciting and promising. Yeah. That was gonna be my next question was about the on premise. Obviously, we saw the massive closures and now we're seeing the reopening, you know, now in March, which is really exciting. So what kind of conversations are you having with the on premise buyers and and the distributors and brands that are more focused on that side of the market. Is there anything more specific within the marketplace at seven fifty that they're using to place orders and to to get access to brands? The on premise interestingly, even through the pandemic, you know, there were some that were much less engaged, but we actually saw a decent amount of engagement from the on premise around just kind of broad search. So they might not have been ordering as much. They were still active trying to figure out, you know, whenever they were able to reopen and kind of get back into the normal swing of things. You know, they wanted to be able to kind of have a competitive beverage program, understand all the options that were out there. It gave them a lot more time for planning. Actually saw that play out in the data. And now that things are starting to come back online, you, you know, you see those orders starting to pick back up as the excitement around, you know, hopeful potential for reopening is is right on the horizon. Exciting. So, you know, seven fifty is technology overall. It's made selling wine more efficient in a nutshell to sum it up. But what's next for the platform? We're, you know, obviously, they expanded into the media space with seven fifty daily and now beverage media. And that partnership, which has been super exciting to see evolve. But what snacks, where do you see seven fifty moving towards in the future? You know, we're really, really focused on e commerce and making that that online ordering process more efficient, more valuable in terms of how you can tailor the kind of information that the buyers are able to view around the distributors they purchase from. Also, we're looking at e commerce on the b to c side. So helping wine shops and liquor stores build e commerce storefronts. There's actually a new product line for us called seven fifty storefronts that gives the the wine shops all the tools and infrastructure they need to get their inventories online, fully merchandised with content and all of the information, all the rich information that powers our b to b marketplace, and have them able to use that to have a online presence for their consumers. And then all of the billing and shipping and details that go around being able to operate e commerce. We help them facilitate. So we see that, that trend, the only increasing, really at all tiers, the, the need for e commerce and a more streamlined online buying and selling process. So there's obviously a lot to benefit from for a winery or importer distributor using the platform, but let's say, I'm a winery in Italy and I I'm new to the platform. Give me a few tips. How do I get started? Order some of the do's and don'ts when using the platform that I should be aware of? The first thing that any Warrenry who's looking to enter the US market should be thinking about is just how can they educate themselves most broadly about their options. And so that's really the the primary thing that we can help them with. They can, like, it was kind of saying before they can really understand which states might be the best target for them based on who the competitors are. Where the opportunities are because of holes, you know, in distribution as it stands today. And from there, you know, once they have distribution, it's really about engaging with the tools and making sure, you know, they're connecting with all their distributors that they're putting their information out and and keeping it maintained so that the the buyers engaging have kind of new content and information available to them. Right. Good. Good to know. Helpful helpful advice. And and, I think what you're saying and understanding the market where the opportunities are and and and doing the homework and research is is really important. So, you know, we talked about e commerce and that's come up quite a few times throughout this series about that massive growth and also the lasting impact. But what other changes do you see coming for the beverage alcohol industry, you know, in the next five to ten years, maybe specifically in terms of e commerce or elsewhere? I think that given the just massive amount of new products and and kind of skew proliferation that's happened over the last decade. You have so many unique products that need to help need help finding their home. Retailer with the consumer. So I think as a lot of these tools, evolve and mature, you're gonna see a lot more tailored abilities to market products to specific subsets of retailers, or, you know, specific consumers based on, you know, ultimately what they want to be buying. So just so more more specification, hyper segmentation within the market both, you know, at the trade level, b to b, but, you know, potentially also, you know, B to C hyper targeting when it comes, you know, to to social media advertising, right, is is something many other industries are doing really well as I I know from the the targeted ads I get for, you know, close and makeup on my Instagram feed. So, it'll be interesting to see. Our industry has been a little, slower to adopt there. But with with the renewed and kind of increased interest in e commerce and building the capabilities, really at every tier. You're gonna start to see those same those same trends and capabilities, in terms of of targeting emerge for for our industry too. Yeah. Absolutely. It's an exciting time. I think we'll, it'll be a lot changing in in the coming years, but definitely important to have those building blocks in place. And like you said, kind of do the research upfront and make sure you know where the market opportunities are for your brand. It's great to learn more about how seven fifty can help wineries and importers do that. So thanks for being with us today to to tell us more. Thank you so much. It was nice talking to you. So thanks again, Erin, for joining us. To our listeners, thanks for tuning in. Please be sure to check out seven fifty at seven fifty dot com and join us next week with, Mike Province from three by three insights. Thank you. See you again next week on the Italian wine 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 colangelo v r dot com. And remember to rate our show wherever you listen to our podcast.