Château Smith Haut Lafitte Cellar Tour and Les Sources de Caudalie Dinner: Decanter d'Yquem Weekend

Photo courtesy Ogodinho with permission.

Chateau Smith Haut Lafitte is a property located in the Pessac-Léognan commune of the Graves sub-region of Bordeaux and is owned by Florence and Daniel Cathiard, former members of the French National Ski Team.  Decanter had arranged for Yquem Weekend participants to visit the winery for a cellar tour at 6:00 pm on Friday and we showed up on schedule for this opening event.  The tour was listed as optional but, in a testament to the high interest level of the participants, everyone showed up.

The tour was led initially by Xavier Feuillerat, the individual in the winery tasked with that activity. According to Xavier, the château can trace its roots back to 1365.  The name is derived from the Old French word Lahite -- hill -- and, thus, Haut Lafitte is top of the hill.  In 1770 the property was bought by one John Smith who modified the château's name by adding his surname in the primary position.  At one time in its history the château was owned by Lodi Duffour-Duberger, one-time mayor of Bordeaux and the individual who had been charged with the development and ratification of the 1855 Bordeaux Classification.

The current owners were married in 1968.  Daniel's father ran a grocery chain which he went home to manage after his father died in 1970.  In addition to growing that business into a major mid-market chain, Daniel launched a sports-themed chain called Go Sport and both of these businesses were sold in 1990 and Château Smith Haut Lafitte bought with the sale proceeds.

The property consists of 67 hectares, 56 of which are planted to red wine grapes.  Xavier indicated that the white wine grapes were farmed biodynamically with the plots ploughed by horses, no insecticides, and vines pruned only when the moon was in a certain phase.  The white wines are fermented in 50% new French oak over a 3-week period and stored on the lees for 12 months with battonage.  The composition of the white wine is 90% Sauvignon Blanc, 5% Semillon, and 5% Sauvignon Gris.  The composition of the red wine is 35% Merlot, 55% Cabernet Sauvignon, and 10% Cabernet Franc.

By this time Madame Cathiard had joined the tour and taken over leadership responsibilities and proceeded to refute the claim of biodynamic farming.  She said they would never be biodynamic.  The château does use organic compost and plough with horses but the latter is, according to her, to avoid compacting the soil in a particularly fragile area.

James Lawther, Madame Cathiard, and Technical Director Fabian Teitgen

According to Madame Cathiard, when they bought the property 20 years ago, they were concerned with the fertility of the rootstock and have had an ongoing vine-replacement program to address this issue.  The oldest vines on the property are 52 years old and can go 6 to 7 meters into the soil.

It takes 3-5 years before they begin picking grapes from the new plants and the press from these grapes go into the second wine (Les Hauts de Smith).

The winery has an on-site cooperage which produces three barrels per day.  This production is sold to the second label and to Cognac and Armagnac producers and some used in-house.

Madame Cathiard took us into a sub-basement with access secured through an electrically operated door which opened upwards from the floor.  As we descended into the room she indicated that it was named Le Paradis -- the paradise.  On the left-hand side of the room was a table on which lay every size of wine that is produced at the château, proceeding from smallest to largest.  On the right side of the room was a line of bottles of the château's red wines arranged from oldest to most recent.  At the front of the room was a glass cube containing a wine bottle which, through the influence of imbedded mirrors, appeared to be the entrance to a hole stretching to infinity.

Photo courtesy of Ogodinho. Used with permission.

Photo courtesy Ogodinho. Used with permission.

At the conclusion of the cellar tour Madame Cathiard took us to the château's tasting room where we tasted the 2008 vintage of the white wine.  Madame Cathiard described it as evolving nicely with aromas of grapefruit and white flowers.  James Lawther, the Decanter MW accompanying us on the trip, described the wine as having freshness and balance with visible but harmonious oak, and grapefruit and apricot on the nose, exuberance on the palate, and good length and depth.

At the conclusion of the visit we thanked Madame effusively and wended our way back to Les Source des Caudalie's La Table du Lavoir restaurant for dinner.  One of the thoughtful things that Decanter had done was to check for food allergies/preferences ahead of time and to pass that information on to the locales at which we ate.  The menus were presented to us with options or personalized for those with specific needs.  The menu for the dinner at La Table du Lavoir was as follows:

Course 1:  Onion tart with anchovies and black olives, rocket salad parmesan or Foie gras from the Landes with Lillet caramel and toast; accompanied by Chateau Smith Haut Lafitte Blanc 2007.
Course 2:  Sea Breem filet à la plancha, ink of squid risotto, red sweet pepper juice or Duck magret, seasonal mushrooms and juice; acompanied by Chateau Smith Haut Lafitte Rogue 2000.
Course 3:  Warm soft chocolate cake, Bourbon vanilla ice cream or Figs tart, almond milk sorbet; accompanied by Chateau Smith Haut Lafitte Rouge 1998.

This was a great getting-to-know-you dinner and set a phenomenal baseline of communication for the entire group.  By the way, the 1998 was the preference of the group as the 2000 needed to be decanted fro a while.

A Review of Decanter's d'Yquem Weekend Event

Decanter had billed it as a Bordeaux Readers d'Yquem Weekend and, at the end of the day, the Readers had had a lot of d'Yquem and (maybe as a result) a singularly exhilarating weekend.  This post reviews and assesses the overall program while subsequent posts will examine the individual elements in greater detail.

I became aware of this event when I visited Decanter's HQ in London a few weeks ago to attend the Steven Spurrier class on Mastering the Medoc and Graves.  While we were at lunch Steven mentioned the event and shared the promotional literature with us.  As laid out, Decanter proposed a weekend in Bordeaux with the following features:  Limited to 16 people; Les Sources de Caudalie as the hotel of choice; cellar tours of Châteaus Smith Haut Lafitte, Cheval Blanc, and d'Yquem, each tour to be led by a senior manager of the Château; post-cellar-tour lunch at Château Cheval Blanc and dinner at Château d"Yquem; transportation to and from all events; Decanter senior managers and a Master of Wine to accompany tour members on the trip.  I saw this as a fantastic opportunity to be introduced to Bordeaux from the top and, simultaneously, have the opportunity to interact with Decanter senior management and a Master of Wine for an entire weekend.  I jumped at the opportunity.

I flew into the Bordeaux airport a little after midnight on Thursday and spent the rest of the night at a hotel in the city of Bordeaux.  I headed out Les Sources de Caudalie a little after 1:00 pm.  I had never stayed at the establishment but was familiar with it through the writings of George Taber.  In his book In Search of Bacchus (Scribner, 2009), Taber described it as "... a small luxury hotel" whose "rooms are furnished with antiques, no two of them the same. One suite is in a fisherman's hut built on stilts in a small artificial lake."  We were given notice of our impending arrival at Caudalie by the sight of the square, squat tower with big, bold letters announcing Château Smith Haut Lafitte.

 Les Sources de Caudalie is directly across a narrow street from Château Smith Haut Lafitte but we had to delay our entrance into the property while another taxi backed gingerly out of an even narrower stub-driveway that serviced the hotel.  Once we unloaded the car and stepped into the entranceway, I had a clear sense that this was a special place.  The lobby was small but well appointed and looked out on the artificial lake described by Taber.  Beyond the lake ran row after row of gold-, rust-, or brown-robed vines whose leaves individually reflected the seasons impact. The reception staff were courteous and helpful without being fawning.

Our room was not ready so we had lunch and then hung at the bar drinking champagne.  While at the bar we met Sarah Kemp, Decanter Publishing Director. She was very disarming and our interaction at this initial meeting signaled that it was going to be a fantastic weekend.

Our schedule called for assembly in the hotel lobby at 5:50 pm for an optional tour of the Château Smith Haut Lafitte cellar, said tour to be led by Decanter Contributor James Lawther MW.  At this juncture I was introduced to the other members of the tour group (12 of us in all) as well as members of the Decanter team whom I had not previously met.  We took a short walk in the dark to the Château Smith Haut Lafitte cellar and was ushered into the building to begin our tour.  The tour was initially led by a senior staff member at Smith Haut Lafitte but Madame Cathiard, co-owner of the property, joined our group shortly after the tour began and guided us the rest of the way in.

Madame Cathiard gave us a spirited and enthusiastic exposition on the winery and its wines and set an overall high tone which was maintained by all of the wineries that we visited over the course of the weekend.  I will cover the winery visits in greater detail in future posts but, at this point, would like to provide my perspective on the event as a whole.

Decanter  over-delivered (not a bad thing) and, in so doing, exceeded my wildest expectations.  I live for memorable experiences and this one truly fit the bill.  We had cellar tours of Châteaus Smith Haut Lafitte, Cheval Blanc, and d'Yquem led by Florence Cathiard (co-owner), Pierre Olivier Clouet (Technical Director), and Pierre Lurton (General Manager), respectively, and, in so doing, gained insights into the workings of those enterprises at a level (and in a setting) that would have been difficult to realize had I pursued it on my own.   In addition to the cellar tours, we had sit-down meals at Cheval Blanc and d'Yquem that were hosted by M. Clouet and M. Lurton, respectively, and nothing relaxes a wine person like good food and their own wines.  They were very relaxed.

One of the results of the event was that like-minded individuals were brought together on hallowed ground.  We are all wine collectors who love talking about wine and sharing a glass of wine and good food with good friends.  We all saw the d'Yquem event as a "must do"; and did.  I enjoyed every one that I met and will have ongoing relationships with a number of the people that I met there.

The final contributing element to the success of the weekend was the human element: the Decanter team.  They worked unceasingly to ensure that the weekend lived up to its hype.  Emma scurrying about with her ever-present clipboard, whipping service-providers into shape, herding recalcitrant readers between events in order to keep us on track, and ensuring that the spa worked as advertised by taking the first honey-something-or-other wrap.  Lacey working diligently behind the scenes with an ever-present smile and upraised glass.  James was a peach. A Master of Wine who has not read his own reviews. Who was helpful and always ready with a detailed explanation or tasting note when called upon.  He gave running commentaries as we drove through the various communes and even stole us away for a trip through St. Emilion while the other van was making a Macaroon stop.

Sarah was wonderful to be around.  She is exceedingly knowledgeable about wine issues, events, trends, and people and appears to be well-connected in Bordeaux.  She is a great conversationalist who loves laughter; and a glass of wine.  When I asked what were her objectives in launching the event, she said she wanted to share her experiences with the magazines' readers.  I asked about her measure of success and she said "You guys still speaking to us in the breakfast room on Sunday morning."  Her easy banter with Madame Cathiard and M. Lurton attests to her connectedness and relationships with the leading lights of the community.  During the dinner at d"Yquem it was was obvious that they had socialized a lot because they almost had to cast lots to determine who would tell the next story; stories which they both seemed to know.

This was an inaugural event and, in my opinion, it was stunning.  Decanter does not know if/when/where they will have a second event but if they do you can bet your life on one thing.  I'll be there.

Typicity of Bordeaux: Guild of Sommeliers Blind Tasting

Yesterday The Guild of Sommeliers Foundation staged a well-conceived and well-executed Bordeaux blind tasting at the 500 E. Broward Blvd (Ft. Lauderdale) location of Morton's Steakhouse.  The tasting, titled Typicity of Bordeaux, was designed to explore and highlight the uniqueness of Bordeaux commune terroirs through tasting two flights of four wines each.  The tasted wines had been opened and double-decanted on the previous afternoon in order to increase approachability.

The tasting was led by five Master Sommeliers: Andrew McNamara (Premier Beverage), Virginia Philips (Breakers), Eric Hemer (Southern Wines and Spirits), Brian Posey (Treasury Wines), and Juan Gomez (Breakers).  Attendees were seated at five circular tables, each of which was equipped with a full complement of wine and water glasses, water pitcher, and individual spittoons.  A Master Sommelier sat at each table to assist the tasters in their evaluations.

The tasting protocol was described by Andrew McNamara and then each of the Masters gave a brief overview of the terroir characteristics of a major Bordeaux sub-region.  The wines were to be tasted and assessed as a table and then discussed room-wide.  At the conclusion of each flight, the wines for that flight would be revealed.

Flight 1

Wine 1:  This wine exhibited black fruit, violets, chocolate, mint, eucalyptus, a herbaceousness, cedar, and tobacco.  It had medium concentration, good acidity, and medium+ tannins.  This wine was later revealed to be a 2006 Chateau LaFleur Gazin, Pomerol; 80% Merlot, 20% Cabernet Franc.
Wine 2:  Black fruit, baking spices, tobacco, cocoa, gripping dusky tannins.  Balanced wine but austere. Later revealed to be a 2004 Chateau Malmaison, Medoc; 80% Merlot, 20% Cabernet Sauvignon.
Wine 3:  Earthy. Bell peppers. Ripe, unctuous fruit. Concentrated.  Huge tannins but balanced by acidity.  Later revealed to be a 2006 Chateau Fonplégade St. Emilion Grand Cru Classé; 80% Merlot, 20% Cabernet Sauvignon.
Wine 4:  Earthy. Smokiness, Coffee beans, mocha, pepper spice, black tea, raisinated fruit, and a gravelly note.  Huge tannins but balanced with acidity.  Later revealed to be a 2005 Chateau La Louvière, Pessac-Léognan; 64% Cabernet Sauvignon, 30% Merlot, 3% Cabernet Franc, 3% Petit Verdot.

According to Andrew, the latter two wines were representative of the ripe, new oak style while the former were more traditional.

Flight 2

Attendes vacated the room at the end of Flight 1 so that the wines for the second flight could be poured.  Before the tasting began we were told that all four wines were from the Medoc and we had to deduce the commune and the vintage.

Wine 1:  Floral qualities, violets, roses, juicy black fruits, leather, and mint.  Great weight on the palate.  A layered wine.  Later revealed to be a 2004 Chateau Giscours, Margaux; 53% Cabernet Sauvignon, 42% Merlot.
Wine 2:  Perfume, black plum, smoky, dry tobacco.  Feminine.  Later revealed to be a 2004 Chateau Ducru-Beaucaillou, St. Julien; 70% Cabernet Sauvignon, 30% Merlot.
Wine 3:  Some volatile acidity? Balsamic quality. Austere. Gripping, drying tannins. Power. Pencil lead. Later revealed to be a 2004 Chateau Grand-Puy-Lacoste, Pauillac; 75% Cabernet Sauvignon, 25% Merlot.
Wine 4:  Oak dominant. Coffee, espresso, mocha, forward fruit, rust, gravel.  Muscular tannins.  Later revealed to be a 2004 Chateau Cos d'Estournel, St. Estephe; 60% Cabernet Sauvignon, 40% Merlot.

All in all this was a very informative and intriguing approach to continuing education for Sommeliers from the Guild.  Alas, we could have utilized an additional two hours and it still would not have been enough.  The time went by way too quickly.

Austro-Hungarian tasting and the wines from Somló, Hungary

At the recent Austro-Hungarian tasting held in London at the residence of the Austrian Ambassador, three wines from the Somló wine region of Hungary were featured: Somló Abbey Winery Olaszrizling 2009: Domaine Kreinbacher Kőkonyha 2008; and Hóllovar Estate Hárslevelű 2009. In this post I examine both the region and the wines presented at the tasting.

The Somló wine region is, at 900 hectares, one of the smallest wine regions in Hungary. The region has historically been structured around the land on the slopes of the extinct volcano Somló-hegy but has recently been extended to incorporate the land and vines on two nearby hills. The region’s climate is continental and diverse with hot and humid summers, dry autumns, rainy springs and cold winters. The soil is basalt, clay and sand with increasing percentages of basalt as elevation is increased.

The wines from Somló are exclusively white and are made from Hárslevelű, Furmint, Juhfark (the most recognized wine from the region), Welschrizling, Traminer, Chardonnay, and Olaszrizling. The wines of the region are acidic and exhibit an earthiness due to the minerals in the soil. These wines require long aging in wooden casks and, given their robustness, have somewhat fallen out of favor.

Somló Abbey Winery Olaszrizling 2009

Somló Abbey’s 3-hectare vineyard is home to 15,000 vines of all allowed varietals and yields an average of 5,000 bottles annually. The vineyard is located on basalt-covered soil at 230 meters above sea level. The winery pursues low yields and practices minimal intervention in both the viticultural and vinicultural aspects of winemaking. The grapes are hand-harvested and only free-run juice is used in the wines. The wine is fermented in 500 liter used Hungarian oak barrels. No artificial yeasts are used during the fermentation process.

This particular vintage is 100% Olaszrizling and is 13.5% alcohol by volume. The wine was medium pale yellow in color and had notes of apple and other tropical fruits such as banana and papaya. A definite earthiness on the palate. 5g/l of residual sugar.

Domaine Kreinbacher Kőkonyha 2008

This winery was established in 2002 and has 33 hectares of vines. Annual production from this organically farmed vineyard is 9000 cases annually. The wines are fermented and aged in Hungarian oak barrels of between 500 and 2000 liters in volume. This is the only winery in the region that makes blended wine and this particular entry is made from equal parts Furmint, Hárslevelű, and Olaszrizling. The soil in the vineyards is basalt and the Olaszrizling vines are planted on southeast-facing slopes, the Furmint vines on south-facing slopes and the Hárslevelű vines on southwest-facing slopes. All of the varietals are planted between 250 and 280 meters above sea level.

The wine registers at 14% alcohol by volume. It is pale yellow in color and has a slight florality. It is light-bodied with a lot of acidity. It has a greenish/bitter note on the palate and intense minerality. A long finish.

Hóllovar Estate Hárslevelű 2009

This estate is comprised of a single 4-hectare, south/southeast-facing plot located at the foot of the basalt strips on Somló Hill. The estate name derives from the protected birds’ nests hidden among the basalt rocks. Varietals planted on the plot include Furmint, Olaszrizling, Hárslevelű, Juhfark, and Sauvignon Blanc. The vineyard sits between 215 and 270 meters above sea level.

At 14%, the wine is high in alcohol but exhibits good balance. The wine is light bodied with notes of pine and exotic fruits.

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.