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Interview, part 2: Pat Roney, CEO of Vintage Wine Estates

September 27, 2021

In the second part of our interview with Pat Roney, the CEO of Vintage Wine Estates explains how the 2-million-box company is addressing the direct-to-consumer and e-commerce space, as well as the challenges that range from the pandemic to forest fires rich in California.

SND: The last year and a half have presented wine companies with many challenges. How did you approach them?

Roney: Well, we met the pandemic challenge first and foremost through our ability to contact the consumer directly. We opened a second distribution center in Cincinnati, Ohio to provide two-day delivery to over 90% of the country. That was very successful for us because we subsidize our shipping and let this business grow. In our e-commerce business, we’ve grown almost 40% over the past year. And that’s because we had the teams to take the opportunity. We started with virtual tastings and were able to involve many of our staff in the tasting room and step up our video activities. Now, of course, the hospitality is starting to return and we don’t know how long it will return, but we are still showing some growth in this segment.

SND: In addition to DTC, were you able to expand the off-premise business to counter this on-premise challenge?

Roney: The challenge with a company like Vintage Wine Estates is that we are a collection of many different brands. We don’t have four or five really strong power brands. And food wholesale has really grown to be in the top 30 brands. The consumer didn’t want to go shopping and have an experience. The consumer wanted to get in and out of the store. We haven’t had the same highs as some of the others, but we haven’t had the lows either. We are so strong at digital marketing, unleashed our entire e-grocery team, and seen a lot of growth working with our major retail partners in e-grocery.

SND: Was one of your wineries affected by the forest fires in California last year?

Roney: We certainly had some smoky wines to deal with. But because we’re so diversified as a company – only 15% of our business comes from Napa and Sonoma – we can move on to other areas. We always try to keep all of our facilities low risk by keeping undergrowth and everything else to a minimum. And grapevines are pretty good at protecting themselves in a drought-free year because they have so much water. But insurance premiums are really going through the roof, by over 500% in the last three years. As a winery, it’s hard to get insurance at all. We’re actually going to insure ourselves and then overinsure too. We see this as a much safer and perhaps cheaper way to manage our risk.

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Tagged: vintage wineries

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