A Chat with the Fastest-Growing Wine Company

In 2020, Nielsen pegged Delicato Family Wines as the fastest growing wine company, growing by more than one million cases with dollars and volume growth at least 5% higher than the overall category [see WSD 01-29-2021].

Your editor recently caught up with Delicato Family Wines chief Chris Indelicato, who tells WSD the company is the fastest-growing top six wine supplier in the US as well as the No.4 exporter of California wines, and the No.2 driver in total wine industry growth.

Below is the first part of our conversation as you, dear reader, are a fly on the wall.

Wine & Spirits Daily: What kind of growth rates did you see in 2020? And how are things looking so far in 2021?

Chris Indelicato: We had a very strong 2020 and our overall sales were up more than 30%- as measured by IRI-as well as our shipments (up 30%).

And we began [2020 with the newly completed] production and distribution center, called G4C after the fourth generation of the Indelicato family joining the business, and the timing couldn't have been better. It allowed us to grow our capacity while at the same time, gave everybody a very safe place to work and helped us deliver the increased growth for that year.

We outpaced the category growth by 2x in revenue and 4x in volume, and those are all measured by IRI. And so not only did Bota [Box] benefit the most from the pantry loading, but we also had good growth in our premium glass brands like 1924, Z. Alexander Brown and Three Finger Jack.

In '21 so far, the first few months of the year, the industry has grown about 11% and Delicato is trending above 20%, again per IRI.

WSD: How sustainable are these growth rates? Do you expect to return to 2019 levels?

Chris: We don't expect to grow at the same pace that we did in 2020, but we still expect at least high single digit growth in our portfolio during 2021. For us, we had large gains in both the convenience and e-commerce part of the business. And so some of those categories are going to continue to do well, and we've been fortunate, as we heavily invested in the digital marketing piece.

We have the number one e-commerce wine brand per Nielsen. We have a top five brand sold on Drizly, number one on Vivino, a top five wine brand sold on Instacart.[and] we have a good opportunity to continue some of the growth that we saw in 2020.

Bota has the number one repeat purchase rate among the top 30 brands. And it also is the number one loyalty rate in a premium box. So we still see some significant growth simply in Bota Box and the [3L box wine] category in general.

WSD: How much of your business does Bota Box represent?

Chris: A little over half of our business at Delicato comes from Bota Box and the brand in total today is a little under 12 million cases.

WSD: What other brands are driving growth?

Chris: 1924 is a brand we launched over five years ago, and last year it was the fastest growing premium wine brand, up over 50% in IRI. We also did really well with that new brand we launched, Three Finger Jack, and that sells for over $15 a bottle. Another brand that continues to do well coming up on its five-year anniversary is Z. Alexander Brown, and that grew 25% [in 2020] and it's up 28% in the last four weeks. That retails at $14 a bottle. And we're also doing really well with our import German brand, Relax. It's up 27%.

While we've had a great run with Bota-and there's still more opportunity there-our glass portfolio also quietly continues to perform and grow in the right categories.

WSD: You mentioned Delicato has also invested heavily in digital. Was that something you started pre-pandemic?

Chris: Delicato was well positioned to take advantage of the consumers' move to e-commerce in 2020. We really started a transformative effort to align our business with e-commerce needs since late 2018. And we're very fortunate to have the infrastructure in place to support the rapid e-commerce growth.

We focused on our product accuracy and upgrading the digital content including bottle shots, videos, production descriptions. And then we invested in syndicating our content across a wide scale retail e-commerce network and partnering with a leading content service provider. We also focused on shopper marketing and syndicating consumer product reviews, since that's what drives purchase intent. So again, we were fortunate to have all of that in place before the e-commerce business took off [in 2020].

WSD: Are you mostly focused on that third party e-commerce piece (e.g. Drizly, Minibar, etc.) versus direct-to-consumer sites?

Chris: We've spent a large portion of our effort on that B-to-B piece, making sure that our systems work well with the folks like Drizly and Amazon and the other large e-wine retailers.

We are also focusing on investing in our distributor partners and their e-commerce platforms such as Southern Glazer's Proof and eRNDC, and other platforms that are going to be used by our large independent distributors.

It's key to be able to give the distributor what they need, give the retailer what they need and be able to deliver content to the end consumer. We do sell some DTC, but our focus today is really on delivering what our selling partners need.

Stay tuned for part II of our conversation in tomorrow's issue as Chris discusses innovation and M&A opportunities.

Source: https://winespiritsdaily.com/a-chat-with-the-fastest-growing-wine-company/