L'Hermitage flight: An evening at Digress (Orlando FL) with the wines of Jean-Louis Chave

Jay Smith, for what seems like eons, stocked and ran Cavanaugh's Fine Wines (College Park, Orlando) in a staid, conservative manner; and the vibe and customer base reflected his orientation. Recently, Jay decided that the time had come to hang up his green apron and he passed ownership to a group led by Augustan/Premier ADST/Breakthrough alums Rob Chase and Brian Kearney. They have renamed the shop Digress but it could have just as easily been called Diverge, or Polar Opposites, because that is exactly what has happened.

Not only have these guys changed the physical look and feel of the establishment -- making it much more esthetically pleasing and welcoming. They have also changed the wines on offer from stodgy European fare to bright and buzzy wines from all over the world. And, best of all, they have begun hosting killer wine events.

One such recent event -- a collaboration with Progress Wine Group -- was titled an Evening with the Wines of Jean-Louis Chave. For anyone remotely familiar with this producer and its wines, this was a can't-miss affair. I will report on the evening beginning with this post on the Hermitage wines tasted.

Brian Kearney kicked off the tasting with a welcome to attendees and an introduction of Proal Perry (Progress Wine Group) who would be leading us on the journey through the wines (See here, here, here, and here for perspectives on Proal.).

Brian setting the stage for Proal Perry of Progress Wine Group

Proal Perry of Progress Wine Group (from the archives)

According to Proal, the Chave family history stretches back to 1465. The current patriarch is Gerard Chave who began working at the domaine in 1935 and took managing control in the late 1970s. His son, Jean-Louis, was born in 1966 and began working at the estate in the 1990s.

The domaine got its start in the St. Joseph appellation and did not acquire vineyards on the hill of Hermitage until 1865. The Hill, as I have shown in a prior post, is divided into a number of climats and the Chaves contend that the best way to bring out the structure and expression of the appellation is through the blending of said climats. Towards that end, the domaine owns 9.3 ha of Syrah vines spread over 7 climats and 4.6 ha of Marsanne and Roussanne spread over 4 climats. The table immediately below identifies the climats while the figures immediately following identify their locations and characteristics (Additional details on the Les Bressards, L'Hermite, and Le Méal climats can be found here).

Table 1. Climat sources for L'Hermitage and L'Hermitage blanc

	Syrah	Marsanne/Rousanne
Les Bessards	Largest contributor to L’Hermitage
L'Hermite	Second biggest contributor to blend	20% of blend. Marsanne gives rich wine with a buttery feel and a clear grip on finish. Roussanne restrained when young with acidity and tight texture
Péleat	Third most important	25% of blend; 100-yr-old vines that have never been replanted; provides an excellent rich middle
Le Méal	X
Beaume	X
Diognières	X
Vercandières	X
Rocoules		50% contribution to Hermitage Blanc
Maison Blanche		5%. Marsanne. Riper, fatter fruit than Rocoules

Source of data: Wines of Northern Rhone.

The average age of the Chave Syrah vines is 40 years while the Marsanne/Roussanne vines are, on average, 50 years old. The Hermitage Blanc is generally comprised of 80 - 85% Marsanne and 15 - 20% Rousanne.

As regards winemaking, the grapes are harvested and placed into small collection boxes. The Syrah grapes are destemmed and placed into stainless steel tanks for fermentation. The wines from varying climats are kept separately duirng the 18 months of cask-aging. The wines are blended in July and left in vat until September when they are egg-white-fined prior to bottling.

The whites are 80 - 90% fermented and aged in up to 1/3 new casks with the remainder fermented in stainless steel. The oak and steel components are blended in the spring, 18 months after harvest. The whites are fined with bentonite.

In discussing blending in The Wines of Northern Rhone, Jean-Louis Chave states:

 "... blending remains the quintessential cellar challenge. Here the task is to meld together the wines of different soils, from different ages ... Its much more difficult to blend the white wines than the reds. Reds have tannin, color, and their texture is softer and tighter. With the whites you have to balance things out with some freshness at the end -- white is a continuing challenge. Blending whites you get one shot and no second chance. With the reds you can come back to them.

We began the tasting with the negociant and St. Joseph wines but I will cover those in a future post.

Photo credit: Brian Herbst

The Hermitage wines tasted were the 2014 red and white and 2004 white.

The 2014 growing season in Northern Rhone, according to Jancis Robinson, was

A challenging growing season for reds in which grapes struggled to reach full maturity and particularly vigilant sorting was required thanks to the Drosophila Suzuki fruit fly. A successful flowering resulted in a decent crop, swollen in many cases by rain during the summer and red wine harvest. Whites fared better and benefited from a late rush to maturity but retained good acid levels. Reds likely to be for relatively early drinking.

The 2014 Chave Hermitage Blanc was aromatic with floral notes, yellow apple, stone fruits, and honey. Waxy. Unctuous on the palate. Power with balance. Lengthy finish. The 2014 Hermitage Rouge was floral with dark fruit, minerality, smoke, meat, spice, and herbs. Medium-bodied, textured, and structured. Lengthy finish.

The 2004 vintage, again as described by Jancis Robinson, was a welcome return to normal vintage conditions (post the 2003 heat-wave vintage) but it "was not generous and the wines have developed fast." The 2004 Chave Hermittage Blanc showed stone fruit, honey, hay, wax, baking spices, and orange peel on the nose. Thick and rich on the palate. Waxy with apricot notes. Lengthy finish.


©Wine -- Mise en abyme

Augustan sales force "backbones" new Premier Beverage Account Development Team

Premier Beverage, a member of the Charmer Sunbelt Group, and one of Forida's largest distributors of wine, spirits, and other beverages, is streamlining its operations and enhancing its customer-servicing capabilities by melding the Augustan Sales Force and the Premier Account Development Specialist Team (Premier ADST) into a new organization called the Premium Account Development Specialist Team.  I spoke with Andrew McNamara MS, Director of Fine Wine/Master Sommelier, Premier Beverage Company and Augustan Wine Imports (and newly minted member of the Board of Directors, Court of Master Sommeliers) and Proal Perry, General Manager of Augustan Wine Imports, the team is slated to manage this new organization, to get their perspective on the rationale and implementation of this organizational move.

Andrew McNamara MS

Proal Perry

According to Proal, Augustan was founded in 1983 with the intent of bringing small-producer, estate-bottled wines to the Florida market. The business model was successful but the company did not have the size to fully serve the market so it entered into a partnership with Premier Beverage. The organizational structure that was in-place when I interviewed Proal two+ years ago was as follows: a commissioned sales force; a General Manager/Sales Manager who reported directly to Proal and was charged with balancing responsibilities across the company; two Portfolio Managers – one responsible for the U.S. and the other for the rest of the world – who handled issues such as inventory, profitability, costing, and supplier contact and coordination; and a Marketing Specialist who handled referrals. This structure no longer meshes with Premier's strategic imperatives nor the realities on the ground.

The driving forces for the melding of the organizations were two-fold: (i) Customers have a number of sales people calling on them and are always looking to reduce the number of calls that they have to field.  By having a single salesperson calling on a customer, and representing the company's full lineup of products, Premier can show that it is listening and reacting to their stated needs without sacrificing its goals. (ii) The producers that Augustan represents continue to grow and there was a need to provide a sales organization that could continue to effectively represent their products in tandem with their growth. The process of melding the organization began about four months ago with intensive planning regarding the strategy and operation as well as intensive interviewing to flesh out the team.

The new, streamlined organization has two aspects: (i) The Premium Account Development Specialist Team -- headed by Andrew -- with responsibility for selling the majority of the Augustan-sourced offerings plus selected elements of the Premier book and the capability to sell the remainder of the Premier book as the occasion arises; (ii) A sourcing/marketing/product knowledge function with the responsibility for product acquisition, producer management, knowledge acquisition and distribution (both internally and externally), and creation of events and shows which project the products that are being sourced for the market. 

The new sales force is comprised of 19 sales people plus two managers and is deployed in North and South sub-teams. Andrew, in his new position, will report to Alan Paquette, Vice President of Wine. The Marketing Specialist will expand his focus to include all the wines that will be sold by the Premier Account Development Specialist Team and will have primary responsibility for product knowledge acquisition and dissemination. The team is further blessed by having Andrew, with his capabilities, to assist in staff and customer product training. Proal continues as General Manager of Augustan Wine Import. 

This is an exciting time for the new team.  Andrew's challenge will be melding the cultures of two separate organizations such that the end result is a group with a common sense of purpose and the tools to accomplish its goals. The challenge for the sales force will be getting up to speed on a broader array of products, and a different business model, while getting to know new team members, and maintaining the level of production in the short term. On the other side of the coin, they are now able to offer a wider variety of "new" choices to their existing customers and, as such, increase their perceived value.


©Wine -- Mise en abyme

Market Conditions and Augustan Wine Imports Positioning: Part III of an Interview with Proal Perry, Founder

Earlier this week I sat with Proal Perry, Founder of Augustan Wine Imports, for what turned out to be two hours of dialogue on Augustan Wine Imports, current market conditions, and the company's response to the winds of change that are buffeting the industry.  In installment 1 of this series I reported on the Augustan origins and partnership with Premier while installment 2 looked at the company philosophy, goals, and organizational structure.  In this the third installment, Proal gives us his insight into current and future market conditions and addresses Augustan's positioning in that future market.

Prior to the onset of the current recession, there was already a move to greater concentration in the industry.  This was a troubling trend, in Proal's view, because larger companies tend to be less forward-looking than their smaller, nimbler counterparts.  Proal likes the idea of a large number of distributors in the Florida market as it results in more wine choices for the consumer and leads to stronger wine consumption.  On the other side of the equation, wine sales are inhibited by a lack of consumer knowledge and an intimidation factor.  Retailers have seized the opportunity to increase their sales by allaying the fears of, and providing education to, retail-level customers.

According to Proal, high-end wineries have historically been loath to sell their wines to independent retailers.  Rather, they have wanted their wines sold in restaurants because of the belief that that channel provided the greatest exposure for both the wine and the winery: the wine is prominently displayed on the wine list; the bottle is brought to the table and consumed by multiple persons; and while the wine is being consumed, the bottle is on display on the table for other diners to see.  Not so for the independent retailer, according to the wineries.  These high-end wines are never displayed on the racks in the store.  Rather, the retailer makes them available only to his/her best customers in a dark back room from where it goes into a collector's cellar never having seen the light of day.  And having provided no broad-based exposure to the winery in that market.

In today's straitened environment very few wineries are placing restrictions on where their wines can be sold due, in large part, to the current restaurant environment.  It has been a difficult time for small operators who, in many cases, lack the capital to ride through the rough times.  Further, it is toxic for startups who, even in the best of times, require two years from startup to profitability.

Proal Perry with the Talley Vineyards winery Rep.

On the consumer side, Proal sees the "top-end" buyers continuing to spend on their favorite collectibles.  It is the "aspirants," as he calls them, who have retreated from the market.  This particular type of customer lacked wine knowledge but bought it because it was "cool" and bestowed "status" on the consumer.  In today's environment this type of consumer has fallen back to wines that are more moderately priced.

With the "aspirants" retreating to the lower-priced end of the market, this segment is showing a marked propensity for trying a more diverse array of wines: diverse both in terms of styles and geography.  And producers are responding.  Good value wines from around the world have increased their presence significantly over the past two years, with independent retailers leading the way in providing customers with exposure to these products.

Proal sees the current market dynamics enduring for some time.  As he sees it, the $50-$75 retail price range has been hurt badly and may never regain its prior elevated levels.  The <$30 market, on the other hand, will continue to be robust going forward, especially given the fact that the quality of the wines produced at that level has improved dramatically over the past 5 years.  It has, historically, been been difficult to get "big spenders" to try lower-priced wines but as the quality of these wines have improved, they have become more open to giving them a try.

Given the foregoing market dynamics, and a strong sense that the <$30 market will continue to grow, Augustan has focused all of its referral assessment activity on that space.  Iconic (read high-end) wines will continue to be pursued as the opportunities present themselves.  A full listing of the Augustan portfolio can be viewed here.

With market positioning set, Augustan has to take all of the necessary steps to ensure that its customers are on board and are prepared to carry that message on to the ultimate consumer.  Augustan eschews the trade-show-type approach in favor of education-themed interactions with its customers which provides those retailers with the tools to then educate the end customer.  For example, last year, the company brought many of its producers to Florida for a three-city road show where small groups of customers had dedicated interaction time with each producer over a four-hour period.  This year the company is doing a number of education-themed sessions with customers in various markets to include a Fall show in the Orlando market where Master Sommelier Andrew McNamara will be leading a seminar on Grower Champagne and South America.

Well, this concludes what has been, for me, a fascinating view into the workings of a company and an industry through the eyes of a leader who has built a successful entity in the space.  I would like to thank John Allport of Augustan for facilitating the meeting with Proal and express my deep appreciation to Proal for taking the time to patiently walk me through the things which come so naturally to him.

Augustan Wine Imports Philosophy and Organizational Structure: Part II of an Interview with Proal Perry, Founder

I recently interviewed Proal Perry, Founder of Augustan Wine Imports, to gain insight into the company's response to current market conditions and am providing Proal's perspectives on this blog over the course of three posts.  Yesterday's post examined the company founding and subsequent partnership with Premier Beverages while today's post looks at company goals and organizational structure.

Augustan Wine Imports” goal is to be the most-valued company in this space that their upper-tier customers are doing business with. Meeting this goal requires, according to Proal, that the company exhibit the following characteristics: quality of service; knowledge; education; creativity; and innovativeness.

The critical success factors (CSFs) for goal attainment are (i) provision of high-quality wines to the market and (ii) the fostering of an entrepreneurial culture within the organization. The first CSF is of paramount importance and the company has implemented a rigorous screening process to ensure that only the highest-quality wines are offered to its customers. The second CSF is being addressed by giving a strong sense of ownership to the people in the field. The message from management to the field is “We are lending you a $1 million+ business that you should treat as your own. Invest in yourself by continually acquiring wine and industry knowledge and we will give you the support required to ensure your success.” A forcing function for this new management approach was Daniel Pink’s book Drive: The Surprising Truth About What Motivates Us.

According to Proal, “The carrot and stick approach does not work; a perception of mastery of your environment does.”

Proal believes that commissioned sales forces spend too much time “chasing the money” and not enough time servicing the customer. In the Augustan scheme, salespersons are salaried and this allows them to devote whatever time is necessary to ensure a satisfied customer. In addition to salaries, salespersons have benefits packages and expense accounts. Proal sees the latter as an essential element of the salesperson “managing his/her own company.”

Augustan has a strong support structure facilitating the activities of the field force. The General Manager/Sales Manager reports directly to Proal and is charged with balancing responsibilities across the company. Two Portfolio Managers – one responsible for the U.S. and the other for the rest of the world – handle issues such as inventory, profitability, costing, and supplier contact and coordination. The Marketing Specialist handles referrals (The Company only solicits “iconic” wines.). New opportunities as assessed as a group. A prospect wine is tasted blind and assessed both on its own merit as well as against other potential entrants. Price does not enter the assessment until after the wine has been judged to have the type of quality that Augustan is pursuing.

When asked to categorize Augustan’s customers, Proal indicated that this was an issue they have been wrestling with for a while and had not fully resolved. Historically, a disproportionate share of the business had been with the restaurant trade but that is now down to 60% from the 70% level. On the retail side, they only do business with independent fine wine retailers. The retailers who depend on Wine Spectator “shelf talkers” are not their preferred customers. He wants customers who: (i) understand what distinguishes Augustan from the competition; (ii) want to partner with Augustan; and (iii) Augustan wants to partner with. Proal cites Tim’s Wine Market as an example of the ideal Augustan customer. Tim’s has been an Augustan customer from day 1 and, 15 years on, remains one of the company’s best customers.

In tomorrow’s post we will examine wine market conditions and Augustan’s response to the tumult.

Genesis and Evolution of Augustan Wine Imports: Part I of an Interview with Proal Perry, Founder

I recently interviewed Proal Perry, Founder of Augustan Wine Imports, to gain his perspective on the current and future state of the regional wine market and to expound on what actions, if any, he has taken to ensure that the company retains its relevance in these tumultuous times.  The interview took place at one of the most beautiful restaurant "setback" locations in the metro-Orlando area: the dock on the lake at Houston's.  Augustan had brought its local customers together on the dock for a lunch-time introduction of the Talley Vineyards offerings.

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.