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   Copyright © Ric Einstein 2009

"Drongo Wombat's" Importer Responds with Her Perspective

© Deborah Gray

I read with interest your TORBwine Update, sent to me regularly by one of my Aussie suppliers. Imagine my alarm, and growing (dare I say it) anger, at opening the latest issue and recognizing the letter from (the person you in jest termed) Drongo Wombat in the piece. As his importer, the anger was not directed at you, but against the producer who emailed a number of importers about his misguided wine woes, without coming to me first, and without regard to the reality of the situation and the repercussions.

I have been an importer in the U.S. since 1992. I started with my family’s wine brand, The Cowra Estate, and supplemented this with some other small wineries to make up a portfolio. Over the years, a number of other brands have been added to the portfolio as the business has grown, but it hasn’t been easy.  I almost went under after 9/11. I had three wineries go bankrupt in my book – Marienberg and Basedow being the two most prominent, who went up in spectacular flames when the owner ran up a deficit of sixty million dollars! He nearly took a lot of others down with them. I recovered and replaced the brands I lost and a couple of years ago took on a partner to enable our business to expand.

We are also Torbreck’s importer. It’s a different relationship from the rest of my portfolio, in that my office does all the compliance, invoicing, warehousing, etc. but not the marketing. That is in the very able hands of Jon Elkins, Torbreck’s U.S. National Sales Director. I believe Torbreck has been very happy with the arrangement for the three years it’s been in place.

When the person who was the subject of your story came to me with his brand, I was very pleased because I knew his well-respected winemaker, and thought it was a great opportunity. The wine sold reasonably well at first, but did not set the world on fire and eventually sales slowed down considerably as the market changed at the top end. Neither I nor the winemaker was able to get Robert Parker to review the wine. To this day I don’t know why, but I have never allowed a rating, or lack thereof, to get in the way of properly getting behind a wine. Then the winery raised the price and it virtually ground to a halt. I still have a number of previous vintages in stock and am in the process of cutting the price drastically to move it.

It’s easy to dismiss an importer as the one responsible for the supposed lack of success for a brand, especially if the individual in question has achieved some success elsewhere, or has been led to believe that their wine is a “sure thing” or made “just like so-and-so’s 95 point wine”, etc.

The winery/vineyard owner has bought the land, planted the grapes, hired the pickers, staff, winemaker, bought barrels and tanks, bottled and labeled…and on it goes. By the time the wine is ready they are pretty desperate for a market, and these days that’s hard to come by.

It is perfectly understandable they are looking to ‘experts’ for advice and loving any positive reinforcement, especially when they are being told what they want to hear. But as others have aptly pointed out, the U.S. market is no longer the same animal it was a few years ago, or when their neighbors first achieved success. It’s crowded, confusing, over-supplied and under-represented. The distributors have merged, swallowed up and beaten down the smaller competitors, until there are a limited number of behemoths. Their warehouses are swollen with product and have spawned a bunch of “suits” wielding the big sticks of dominance, but they really only selling items “on quota” or products with the biggest incentives. They have been reduced to order takers and pleading with retailer to “please take a couple of cases of xxx wine; it’s part of my quota. I’ll let you have yyy wine if you take the one my boss is pressuring me to sell.”

Small companies, such as mine, with relatively unknown brands or limited production, just get lost in their books. We’ve have to be very creative to market wines now, and fortunately I have a network of great, small to medium-sized distributors.  

Unfortunately there are still the gouging, one-hit wonder, kick ‘em out when they don’t perform importers! We all know who they are and although their wings have been clipped by the advent of the web and the ability of retailers in the US to see that the $100 bottle they were just sold retails for $35 in Australia, they still continue to impress the neophyte vineyard farming producer with their ability to “get Parker to give your wine 90+ scores.”  So be it. Every industry has its questionable opportunists.

But, for the rest of us toiling away to make an honest living and finding it harder than ever, it is insulting to be lumped in the barrel with the bottom feeders.

To be completely transparent, my markup is 35% after the initial ocean freight and customs clearance. That’s it for every wine. If you see wines that are expensive in my portfolio, it’s because the supplier/winery/vineyard owner has charged more than another wine. In the case you wrote about, the winery owner stated that XX (a very well know winemaker) charges so much that he had to charge accordingly!” I wonder what the winemaker would say on that score.

Economies of scale are needed for us make any money. At the small volumes it can’t support you; when the case numbers increase, the margin becomes large enough to cover the static overheads and to realize a profit. In the case of those wineries whose pricing just isn’t competitive in this changed economy, I have to cut my prices and take a loss. That’s not why I went into business, so why would I be sitting on my hands not marketing the wines, or showing it, and sending it out to be tasted as often as I can? I start showing the wine from the day I receive it and, whilst ratings are very helpful in a ratings driven market, I sell the wine because I believe in it and chose it for that reason, not because it was Parker or Wine Spectator anointed.

It takes up just as much of my time to sell a mediocre, or ill-suited wine, as it does a good quality, well-priced one, so I try to make sure that everything in my book stands out, is distinctive, balanced and offers good value. I represent a diverse, interesting, strong portfolio which, with the exception of a couple of brands, over-delivers on price.

I have represented Temple Bruer for about twelve years. My relationship with David Bruer is based on mutual loyalty; he keeps sending me wine and I keep selling it through the ups and downs and the vagaries of a changing and difficult market. Sometimes I sell as much or more than he expects; sometimes I under-perform, but we keep going together. He knows I can be counted on and I’m not going to throw him out when the rating doesn’t come through. I respect the people I buy wine from and I’m proud to represent their wine. They are all important, meaningful and worth spending time on. I know those people back in Australia and New Zealand are counting on me, and perhaps their quality of life is partly dependent on my performance too. That’s a burden and a responsibility, but I choose to take it on and hope to make them proud of their importer choice.  

To give you an example of another of my wineries, the recent Wine Spectator Insider rating for my Schild 2004 Shiraz was 96 points and the listed retail price is $24.00. I am being besieged with email and phone calls. Did I rush out and take this golden opportunity to raise prices through the roof? No, I did not. It will continue to retail for around $24. It’s being called the highest rated wine for the price ever in Wine Spectator.

I have endured through a lot of joy and difficulty and still think this industry is worth being involved in, but in the U.S. it’s too late in the game to dabble because you love wine and think it’ll be fun. I am not a ‘bulk wine’ importer; how the winery proprietor who sent that email got that idea is beyond me. In some ways I wish I was; if I was the Yellow Tail importer I would be very wealthy and could retire somewhere and write novels.

Deborah Gray
The Australian Wine Connection, Inc.