Wednesday, October 27, 2010
Genesis and Evolution of Augustan Wine Imports: Part I of an Interview with Proal Perry, Founder
Once the customers and Augustan staffers had vacated the premises, Proal and I had the dock to ourselves and settled down for what turned out to be a wide-ranging discourse on the origin and evolution of Augustan Wine Imports, the company philosophy and operating principles, and the state of the broader wine industry. The fruits of those discussions will be shared over three blog posts beginning with today's.
Proal Perry has a restaurant background and one of his frustrations while in that space was the unavailability of small-producer, estate-bottled wines in the Florida market. Proal was trying to exit the restaurant business and began looking at opportunities to address this niche. Bruce Neyers, the National Sales Director for the then fledgeling Kermit Lynch Wine Merchants, came to Florida at that time seeking a distributor for the company's products and suggested that Proal form a company for that express purpose. Proal listened and Augustan Wine Imports was launched in 1993. Proal's wife Connie joined the business 1 year later to focus on business operations while he focused on sales.
A number of factors contributed to the early-life success of Augustan: (i) the timing was right; (ii) Augustan was exploiting a niche that was unserved; (iii) there was little competition; and (iv) Augustan was not viewed as a threat by the large distributors. Augustan was, according to Proal, one of the first small distributors in the state and after its initial success a number of smaller players entered the market. There are now over 200 licensed distributors in the state.
As Augustan began doing business across the state, its business model became problematic. The logistics costs associated with a small company trying to distribute small-estate wines across the state was steadily eroding profitability. By this time, the company had brought on a number of European and domestic producers but had only one distribution center in South Florida from which to dispatch products across the state. Distributing product to the Panhandle could mean that a truck would be gone for three days and be empty for two of those days. If the company wanted to extend the model across the state efficiently and effectively, another path would have to be pursued.
The chosen path was a partnership with Premier Beverage. Premier saw prestige value in Augustan and preserved that value by allowing its management to to retain a high degree of autonomy and independence. Augustan saw value in Premier's distribution muscle (4 distribution centers across the state) and willingness to provide an environment wherein the founding vision of the company could be pursued in an untrammeled fashion. Further, the partnership would allow Augustan to become even more specialized as it would now be representing a smaller group of suppliers.
In tomorrow's post I will share Proal's perspectives on the company structure, key success factors, and customers.