Posted on | September 4, 2012
Written by | W.R. Tish
With Almost 25 Years in Business, Pasternak Wine Imports is Reaping the Rewards of a Strategic Portfolio and a Flexible Approach to Market
Nimble.It’s a word not typically associated with suppliers in an industry that is famously regulated and defined by a mandatory three-tier system. But that word—embodying both flexibility and speed—is precisely what has marked the steady growth of Pasternak Wine Imports, now going on 25 years in business. Founded in 1988 by James Galtieri, in partnership with Domaines Barons de Rothschild (Lafite), Pasternak is best characterized as a mid-size importer—big enough to feature a global portfolio and supply the entire U.S. market, yet small enough to respond quickly to supply-chain issues and category trends alike.
Galtieri exudes an authentic depth of wine expertise (he was previously a retailer), but also the confidence of a manager who is happy to let his players execute a game plan. Part of Pasternak’s collective nimbleness stems naturally from an especially close-knit executive team: a trio that also includes vice president, director of sales & marketing, Gary Clayton and chief financial officer, Badr Benabdessadek.
Leading with a Classical Edge
“We are a reflection of who we represent,” says Galtieri, describing the company’s overarching philosophy. “We pride ourselves in being ‘brand builders,’ as opposed to collectors of lots of little wineries. We have worked hard to select areas where we want to be, and then within those areas, we tend to seek an iconic brand—a brand that within its own milieu is widely respected as a leader.”
His use of the singular—brand, as opposed to brands—is intentional. “We try hard to avoid conflict in our book,” Galtieri notes. The result of this approach is displayed best in Pasternak’s French imports, which represent the engine of the overall portfolio. From Alsace, it’s Lucien Albrecht; from Burgundy, Cave de Lugny; from the Loire Valley, Guy Saget; and from Champagne, the recently launched Champagne Barons de Rothschild.
To demonstrate further, Château La Nerthe (Châteauneuf-du-Pape) and Domaine de la Renjarde (Côtes-du-Rhône) are both Rhône estates, but in distinct appellations. Similarly, Pasternak brings in several non-competing labels from Languedoc-Roussillon (e.g., Réserve St. Martin, Château de Jau, Château d’Aussières, Les Deux Rives). And in Bordeaux, Pasternak imports wine from Domaines Barons de Rothschild (the Lafite branch) and Jean-Pierre Moueix, but from distinct AOCs and at price tiers that stretch from the everyday to the collectible.
This pattern—iconic wines with minimal overlap—also plays out in Italy (Valdo from the Veneto, Barbi from Tuscany); Spain (Paul Chenau); Chile (Los Vascos); and California (Morro Bay). And in Argentina (Bodegas Caro, Rutini, Trumpeter) and New Zealand (Goldwater, Dashwood, just-added Mud House), again the brands are purposefully complementary by region and/or price point.
As a strategy, this approach has given Pasternak’s portfolio real diversity, in terms of geography, wine styles and pricing—not unlike a well-balanced restaurant wine list. Just as important, it lets the company focus attention on each brand into its respective category, in turn enabling Pasternak to deliver what Galtieri calls key to success: providing value. “If you’re not providing value, you’re up against the wall of mediocrity that everybody is slamming up against,” he says. “We provide value to the supplier, of course. We supply value to the wholesaler—at the end of the day, the wholesaler is our client—and through them, we can provide value to the retail trade, on-premise trade and finally the consumer.”
“It’s a complicated formula,” Galtieri admits. At the same time, though, it’s straightforward, and Pasternak’s relative youth and flexibility have empowered them to stick to their mission and to be ahead of many of the industry’s shifting tides. “We were early with Chile. We were early with Argentina and New Zealand,” he points out. “We are the Alsace Crémant category, and we were ready when Champagne sales went flat after the Millennium. When you have the big picture, you’re able to look at where the opportunities lie.”
Approaching the Market: Size Matters
Bringing the portfolio to market involves one very important advantage for Pasternak: being big, but not too big. “Whether we are with a large wholesaler, like Southern or Glazer’s, or smaller ones (Epic in California, Unique in Washington), we tend to be in the fine wine section of that wholesaler. So we have a better presence,” says Galtieri.
The Pasternak sales structure, overseen by Clayton, is traditional at first glance. There are two national account managers (for on- and off-premise) and six regional managers who have national coverage but focus on the top 24 markets that represent 90% of all imports. One noteworthy ripple: the regional managers not only manage wholesalers (setting pricing and sales goals, implementing budgets and promotions), but they also stay in personal contact with key accounts in each of the six zones. Clayton explains, “Our philosophy is about recognizing the importance of relationships—with our producer partners, with our distributors and, of course, working closely with retailers and restaurants.”
Just below the regional managers, says Clayton, “we have account development managers in every major urban market working on the street, in the trenches with distributor sales people and working with key accounts.” In addition, Pasternak coordinates with suppliers’ brand ambassadors, managing market visits and getting feedback in terms of what’s working and what’s not.
Perhaps just as important, Pasternak has had tremendous success in gradually escalating specific brands within their portfolio. “Most of our suppliers tend to make different variations of their products,” explains Galtieri. “The art is selecting a couple of drivers that allow us to streamline their entry into the system.”
Playing to Strengths & Riding Trends
Pasternak’s marketing efforts reflect both the executive team’s commitment to nimbleness as well as a concerted effort to manage their portfolio on a more personal rather than bureaucratic scale. “If you’re a supplier of ours, you’re not competing within our portfolio; if you’re a wholesaler of ours, you get the attention that you need,” says Benabdessadek.
Clayton also emphasizes the value factor: “If you look at our portfolio, instead of saying we’re a fine wine company, we talk about high-value brands. And we’re not necessarily talking about price; we’re talking about wines that over-deliver in terms of the quality and style. Our sweet spot is in the $10-$20 range. We don’t play in the 1.5L arena or $6.99 wines. We want to bring wines that have a unique proposition here in the marketplace.”
Not surprisingly, a personal touch pervades much of Pasternak’s marketing strategy. “We do a lot of training programs and presentations to consumers,” says Clayton. “Having constant visits by the winemakers is very important, too. They bring the real feel: the language, the look, the technical background.” Pasternak is also deeply committed to in-store tastings at retail accounts. Clayton calls sampling “a great tool to break down barriers and introduce consumers to new types of wines.” He estimates they arrange about 1,500 in-store tastings throughout the year.
The importer has also customized programs for large accounts. A catchy, colorful “Tour de French Wines” in-store promotion for BJ’s was expanded in 2012. And a program with Royal Caribbean Cruises was created to conduct educational seminars for the Domaines Barons de Rothschild (Lafite) offerings, replete with retail purchase options.
From his national perch, Clayton feels Pasternak is in an excellent position with a French-rich portfolio. “People in the trade have re-assessed French wines as a whole, but also there is a move back from a consumer perspective toward authentic wines,” he says. “Especially with wines like Cave de Lugny. We’re seeing this iconic white Burgundy on wine lists by the glass, described as ‘French, unoaked Chardonnay.’ There’s a trend toward people looking for more honest wines.” That said, Pasternak has seen fit to Americanize some of its French wines; for example, while they bring in Sancerre and Pouilly-Fumé from Saget, they also import Saget’s “La Petite Perrière,” which is labeled Sauvignon Blanc.
The Road Ahead
Pasternak’s expansion has been steady and measured, and figures to continue that way. Still, the most recent additions—Barons de Rothschild Champagne and Mud House (New Zealand)—are stark opposites in terms of price point and style, seeming to suggest that future moves could head in unexpected directions.
Referencing the success of Valdo Prosecco and Barbi Brunello, and the fact that one of three imported wines sold in the U.S. is from Italy, Clayton says, “We’re always looking for new opportunities.” Galtieri does not rule out spirits as a future addition, although he expects that would demand “more of an artisanal approach.” Noting that “the import market is a lot smaller than the national one,” Benabdessadek points to California and Washington as possible areas of interest. Even still, nothing is getting past the Pasternak gate without fitting into the current portfolio and established criteria: “How big is the brand already? What’s the history behind it? How much can we produce? How much value can we add to our distributor and retail partners?”
For nearly 25 years, Pasternak’s growth has been steady and consistent. And yet, as James Galtieri points out, the industry they operate in seems to be accelerating. “What I see is trends are quicker to come about than ever before. Moscato, for example—out of the blue. Years ago, ‘Should we get into Pinot Grigio?’ ‘Ah, let’s wait until next year, see how it works.’ Change is as fast as lightning today,” he says. “We tend to be a traditional company. We’re traditional in selecting our suppliers. We’re not into fad wines. When you talk about a trend that is dyed-in-the-wool to last, that’s when we jump in.”
Clearly, Pasternak’s executive trio has their eyes and ears open. Says Galtieri: “We like to listen to our retail associates to hear what’s happening. The retailer sees the front line.” And once they do decide on any expansion, one thing is certain: the new brands will fit quickly and efficiently into a carefully engineered system.