Posted on | February 22, 2016
Written by | Kristen Wolfe Bieler
How Baron Francois helped usher in New York’s fine wine era.
There were pros and cons to launching a fine French wine import-distribution company in 1979, recalls Adrien Baron. Hardly anyone else was approaching growers in France directly to represent their wines in the U.S., so there was little competition. On the other hand, he says, “No one was really drinking wine—the volume just wasn’t there.”
But that was about to change and Baron was among the first to see it coming. He quit his job at Star Industries, a major Long Island-based spirits distributor, and launched Baron Francois with a small portfolio of French estates from Burgundy, Bordeaux and lesser-known regions like Madiran and Cahors (Baron is a native of Southwest France).
Few salesmen today would recognize the landscape that Baron encountered in the early ’80s. “Retailers and distributors didn’t know anything about wine and they weren’t interested in selling it—all the money was in liquor,” Baron remembers. “Stores in New York would occasionally have a small space in the back for wine, filled mostly with big jugs from California. The French and Italian corners carried a lot of dust.”
Undeterred, Baron plugged away, building important relationships with top French restaurants like Lutèce, Caravelle, La Côte Basque (“most of which no longer exist today,” laments Baron). He officially got his distribution license in 1982—one of the best-ever vintages in Bordeaux, which he considered a good omen—and before long a fine wine revolution was afoot.
One important change agent was the involvement of women, Baron believes: “Women—who had before only been taking orders in the office—began to sell wine in the field. They were always more curious and willing to learn than some of the men who had been selling liquor for 30 years.”
Staying Ahead of the Pack
Fast-forward more than three decades to a transformed wine market—and one teeming with competition. Baron Francois has changed, too. In 2000 the company was purchased by the Lesgourgues family, owner of the famous Armagnac estate, Château de Laubade, as well as Château Haut Selve in Bordeaux. There have been storms to weather—most notably the devastating French wine boycott in 2003, a reaction to French President Chirac’s opposition to the Iraq war.
As proof that Baron Francois has grown stronger and savvier with time, look no further than the company’s gleaming new office in downtown Manhattan designed by C.I.D. Citlalic Peralta (citlalic.com). It’s a space they are just settling into as they prepare to celebrate an important milestone—crossing the $10 million revenue threshold.
“We continue to grow—by 40% in value over the last four years. Our staff has nearly doubled in the same time period,” asserts Frederic Goossens, who joined Baron Francois as General Manager in 2012. “The reason we are thriving is because we won’t compromise on quality and we offer a model that is very distinct in this marketplace for both our customers and our suppliers.”
What is that model exactly? First, it’s the importer-distributor combination. Goossens explains: “The advantage to being both is that we can buy directly from the vineyard, so our prices stay very competitive for our customers. Suppliers, too, are increasingly seeking out this regional model, rather than a big national importer, which isn’t always the best for building a brand.”
Their size makes them unique in a crowded wholesaler landscape as well. With the back office support and financial security of a large wholesaler, Baron Francois retains the boutique approach of a much smaller operation, says Goossens: “With 500 SKUs, we are big enough to have a good selection of wine and spirits for our customers, but at the same time we are small enough to deliver hands-on service and give the right attention to details.”
Baron Francois offers something unusual to its suppliers, a term they call “mutual exclusivity,” which guarantees that as long as a winery can supply their demand, they will take on no other supplier from that appellation. “We want to set ourselves and our producers up for success,” Goossens says. “Only when a winery can’t keep up will we add another from the region. For example, we have three producers in Sancerre and three in Côtes de Provence. In some cases, we are buying 70% of a winery’s production.”
Loyalty pays off, too, Goossens reminds: “Our strength is our history. We have developed slowly but our relationships give us incredible power in the marketplace.” For example, he points to the thriving Sancerre category, where it can be difficult for importers to secure wine. “We are never out of stock—we can guarantee our allocations and we offer the best pricing,” he says. “A five-year-old business can’t do that. When you work with a supplier for 30 years, it’s like a marriage.”
It’s thrilling for Baron to see how much wine Americans drink today—and the way palates have evolved. He’s witnessed the majority of volume in his retail accounts go from “the under $10 set to the $10 to $17 range.” The explosion of rosé, which the company has helped fuel with Château de Pourcieux, has been extraordinary. (“I used to criticize White Zinfandel, but I think it was helpful in building the rosé category by creating an easy entry point—those drinkers have switched to dry rosé, I believe.”)
There’s also the evolution of the French wine producer, a more sophisticated, open-minded individual today—in some cases Baron is working with his suppliers’ third generation. “A few decades ago, you would never see a label from Cahors list ‘Malbec’ on its label—we have to give Argentina credit for that! Today’s generation has gone to school to learn to make wine, they speak English, they visit the U.S. and want to know where their wines are sold. For the first 20 years I was in business, I probably had two suppliers visit me. The Atlantic was a lot bigger in those days.”
A French Specialist Evolves
Baron Francois will always have a French soul (which extends to craft spirits—see sidebar) but in recent years the firm has branched out to represent top producers in other countries. “We realized that to just be French, we were losing opportunities,” explains Goossens. “We are using the same strategy as we do with our French wines on our wines from Italy and Spain, and appointed a non-French wines Portfolio Manager last year to help us develop the book.”
The company just signed up Bodegas Terras Gauda, in Spain’s Rias Baixas region, the leading premium Albariño in the U.S. market, as well as seven new Italian wineries from a boutique Italian importer focused on small family-owned organic or sustainable vineyards. One can now find wines from California, New Zealand and Germany in their book as well. “I have a thousand requests per year—we could be ten times our size overnight, but we don’t want to compromise our quality,” says Goossens. Baron Francois blind-tastes constantly to find the best, and help their producers fine tune pricing and packaging: “Often, a product is successful elsewhere, but it needs to adapt to be successful in the U.S. market.”
Staying in Motion
For everything that has changed, there is as much that has not. The Baron Francois portfolio remains composed almost entirely of family-owned, estate vineyards. Interestingly, 60% of their business today is from brands that the company has represented for over 30 years—producers like Château Haute-Serre (Cahors), and Domaine Sautereau (Sancerre).
Though older than a good many wholesalers in the market, Baron Francois is far from a mature company. Goossens plans to keep hiring and hopes to double the company’s revenue in the next seven to ten years. “You have to stay true to your philosophy, but you must change with the times,” says Baron. “In this market particularly, you must always continue to fight for your share.”
Denis Lesgourgues, Baron Francois’ President, is eager to see the revolution continue: “My favorite thing is to be on the street seeing what is happening,” says Lesgourgues. “It’s not the same just hearing about it from your wine and spirits consultants.”