Posted on | November 18, 2015
Written by | Kristen Wolfe Bieler
Working side by side in their new office, Winebow and Martin Scott Wines chart new territory in the fine wine wholesale game
When Virginia-based The Vintner Group, which had purchased Martin Scott Wines in 2013, went on to merge with Winebow a year later—forming The Winebow Group— it meant that the two New York-based fine wine distributors would exist under one roof, figuratively. That cohabitation became literal over the summer when both companies moved into a brand new shared company headquarters in Manhattan’s Flatiron district.
“When the merger took place we had five separate offices between New York and New Jersey. There was so much wasted time traveling between them we needed to do something fast,” shares David Townsend, CEO, The Winebow Group.
Yet the conception and design of the organization’s new space aimed to do far more than simply create more room to fit employees. “While each company will remain separate, we can now share market intelligence and best practices,” Townsend explains. “Our new office allows us to be more creative, efficient and competitive. We now have the opportunity to take education to the next level, and to make our suppliers’ lives easier. You need to bring value to the relationship—it’s not just about a bottle of wine and a price.”
The light-filled, loft-like space is dominated by windows and features seminar rooms with audio-visual capabilities and moveable walls to host smaller or larger groups. A variety of open meeting areas and workstations are scattered throughout to accommodate impromptu meetings and the steady flow of people passing through. “It’s been revolutionary to have the brand management, marketing, sales and education teams all under one roof,” says Townsend, adding that the space is also a recruiting tool: “In this competitive environment, we need to have a cutting-edge space where people want to work.” Soon, The Winebow Group will also occupy an additional floor—11,500 more square feet—to welcome import and wholesale brand management as well as sales executives.
New & Improved Nerve Center
The move has been particularly transformative for Martin Scott Wines. “Our company now has a Manhattan presence for the first time—we had been in Long Island for 25 years,” says Eric Celt, Senior VP and General Manager, Martin Scott Wines. “Our 18 NYC sales reps stop by here often throughout the day, and it gives me a chance to hear what’s happening in the market and what our customers are saying. The constant feedback and communication are making our business infinitely better.”
It’s a convenient hub for suppliers as well: “A lot of our producers fly all day to get here from overseas, and this is the first stop they make,” describes Peter Ruggie, Senior VP, The Winebow Group, Northeast. While Winebow’s prior office was just a few blocks away, it had limited usability: “We wanted a space that presented the proper image; a home away from home for our suppliers, where they feel comfortable and can even host meetings of their own.”
Customers and members of the press come and go, too, thanks to a crowded calendar of events and tastings. Celt adds, “We are raising the bar on tastings; we recently had buyers come to taste a range of Francis Darroze Armagnacs going back 50 years. This is something neither company could do before this move.”
A Merging—Not Melting—Pot
Before sharing an office, Winebow and Martin Scott Wines already had a lot in common. “We are both customer service-first organizations working with primarily family-owned wineries,” says Celt. “It’s empowering to come here every day and work with our peers at Winebow because we share the same values; this creates a super energetic environment.”
Being surrounded by an additional set of savvy wine professionals benefits every employee, adds Ruggie: “Not only do our reps gain a deeper understanding of the competitive landscape, they have increased access to the world of fine wine and craft spirits which makes them better sales people. Our employees love our products—sharing stories and experiences about wine is something they seek out on their own.”
The cross-pollination has gone both ways. Celt points to the software upgrades and enhanced selling tools, courtesy of Winebow, which have made a big impact. “We can now analyze information in a variety of new ways, and we are learning from Peter and his team how to work with this data,” he says. Ruggie credits the Martin Scott team with challenging Winebow to find better procedures for meeting NY compliance requirements, and to rethink the recruiting process. “Martin Scott has always done an excellent job of hiring great sales people and managing the subtleties of a fine wine culture—particularly with Burgundy,” he describes. “It takes a special person to have this sophistication and still have that sales gene to compete in the marketplace. Eric and his team have taught us a lot about this.”
Being in the same office space has ultimately strengthened both companies, Celt describes: “You leave here every day feeling that we are one company. Sharing this office has undoubtedly reaffirmed that position.”
Yet separate entities they shall remain, assures Townsend. Having a competitor in your midst—no matter how friendly—raises everyone’s game. “A lot of people were surprised that we really did want to keep the companies separate, but that we still wanted to be in the same space,” he says. “Each company has always had their own identity, and I want to keep that—we don’t want Winebow and Martin Scott to become the same.”
Pushing the Limits of Delivery
The company remains one of the few wholesalers in the business to own their warehouses and fleet of trucks. “It’s a huge advantage—our drivers are great, they interact with the customer almost as much as our sales reps,” explains Townsend. Winebow expanded their warehouse and added more drivers to accommodate the Martin Scott inventory—a huge upside for Celt and his team, who had always relied on third party warehouse and delivery. Even more critical was the extension of ordering windows by several hours. “In New York we used to cut our orders off at 3:00pm—at 1:00pm in Connecticut—and for many restaurants, this is just when they want to place orders, so this is a game-changer for our business,” Celt says.
Economies of scale have helped Winebow, too. “Bringing Martin Scott into the fold allowed us to expand to 38 routes in metro NYC, significantly build our upstate business, as well as offer Friday deliveries on the east end of Long Island,” says Ruggie. The move to accept Sunday orders for Monday delivery (Manhattan and Brooklyn only)—rare in the wine and spirits wholesale business—has exceeded even their most optimistic expectations. “We knew there was demand for this, but we did wonder how long it would take for this to become profitable, since it required a huge outlay in capital,” recounts Ruggie. “And it took just two weeks.”
Dispelling the Consolidation Myth
In addition to expanded delivery services and territories, the companies benefit from beefed-up marketing and PR outreach, and more education seminars. “People assume when they hear the word ‘consolidation’ that we would pull back on the things that made these companies unique and great, when in fact we are just building on and adding to that,” Townsend emphasizes. “A stronger sales force, more tastings, better delivery routes—these are the differentiators that make people want to do business with us.”
And this is just the beginning, he adds. Expect to see more value-creating innovation from The Winebow Group and its distribution houses: “In this business there are a lot of people telling you things you can’t do—I was told 20 years ago that distributors can’t go across state lines. Many said we couldn’t put Martin Scott and Winebow in the same office, or offer Sunday orders for Monday delivery. I want to be the company that knocks down barriers.”