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Bill Terlato On Opportunities And Challenges In Imported Wine
June 16, 2023
Terlato Wine Group is among the leading players in imported wine in the U.S., with a portfolio numbering some 1.8 million cases in total, across brands such as Lanson Champagne, Nino Franco Prosecco, Les Sarrins rosé from Côtes de Provence, Wairau River and Loveblock from New Zealand, and Feudi di San Gregorio, Alta Mora, and Terlato Vineyards Pinot Grigio from Italy, among many others. SND recently caught up with CEO Bill Terlato to get an update on conditions in the U.S. imported wine market.
SND: What are you seeing in the market so far this year?
Terlato: In the market in general, wine volume is down a few percentage points, and value’s up a little bit. We were up 14% in our fiscal year through March. Counter to what’s happening in the marketplace, we’ve recently done a series of meetings with distributors around the country, and it’s become clear that we’re outperforming the import category by a significant amount.
SND: How are you navigating the tougher conditions?
Terlato: The cost of everything—glass, labels, capsules, labor, production, shipping, warehousing—everything has gone up. Some of that has naturally been transmitted into price in the market. But we’ve decided to eat a lot of it, understanding that we might have a little bit of difficulty for a year or two, but if we consolidate the position of our brands, eventually those costs will moderate and even come down and we’ll be in a better position coming out of it. I think that’s one of the reasons our brands have performed very well even in a challenging period.
SND: What areas of imported wine are showing growth overall?
Terlato: The two notable areas where you still see growth in volume are Sauvignon Blanc—in particular New Zealand—and Prosecco. We’re always measuring over $15 a bottle, because that’s the bulk of our business. And that upper end of the market is growing better. New Zealand is up 7%, driven by Sauvignon Blanc. Also in that over $15 tier, Italy’s growing 3% to 4%, Australia is growing as well at the upper end. When you look at individual varieties, Cabernet Sauvignon is growing 15%, red blends are up 9%, Prosecco is up 7%, and rosé and Pinot Grigio are both up about 2%. Volume is growing in the premium and luxury tiers, but not enough to offset the decline at the lower tiers.
SND: What’s driving gains within your portfolio specifically?
Terlato: One area where we’re performing very well, counter to the market, is sparkling wine. Nino Franco, which is a DOCG Prosecco, was up more than 10% last year. Riondo grew for us. And then Lanson Champagne, we doubled the business last year to about 66,000 cases. That brand has performed exceptionally well and is taking a very strong position. From New Zealand, Wairau River grew 60% last year for us—it does about 85,000 cases—and Loveblock was up about 20%. On other imports, Il Poggione from Montalcino was up 36%. Our Terlato Vineyards Pinot Grigio was up 34%. Feudi di San Gregorio from Campania was up 29%. Alta Mora, from Sicily, Mount Etna, was up 13%. Another one is Les Sarrins Côtes de Provence rosé, which is also performing very well. It’s in over 4,000 accounts nationally, with about 20,000 cases its first year, and we’re very excited about the future prospects for that as well.
SND: What are you seeing in the on-premise arena?
Terlato: Restaurants are looking for ways to get back on their feet after the pandemic. Their lists have become smaller, they’re curating them very carefully, and they don’t want brands that everybody else has. They’re working harder to find some discoveries and some things that are higher quality and maybe not as well known, but that will be interesting for the customer, to give them an opportunity to try new things.
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