North Bay Business Journal

Monday, April 21, 2014, 6:30 am

Wine Industry Conference Q&A: Erle Martin, Crimson Wine Group: Standing out amid myriad brand options


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    Erle Martin is president and chief executive officer of Napa-based Crimson Wine Group, a publicly owned producer of fine wines.

    The portfolio is made up of Pine Ridge Vineyards in Napa Valley’ Stags Leap District, Archery Summit in Oregon’s Willamette Valley, Chamisal Vineyards in the Edna Valley on California’s Central Coast, Seghesio Family Vineyards in Sonoma County’s Alexander Valley and Double Canyon in Washington’s Horse Heaven Hills.

    Erle Martin

    Sales last year rose 15.7 percent to $56.5 million, according to the annual report. The company plans to spend $5.4 million this year on capital improvements, including $1.1 million on technology and the rest on vineyard development.

    Crimson spun off from New York-based Leucadia National Corp. with a $14.1 million capital infusion in February 2013.

    The portfolio has four wineries and controls 1,139 acres of land, 728 of which were planted with vines. In late March, Double Canyon agreed to sell 306 of its 447 acres of land to Yakima, Wash.-based grower Winemakers for about $4 million.

    Mr. Martin came to Crimson in 2007 after 10 years at the helm of filmmaker Francis Ford Coppola’s wine enterprises.

    He is set to be part of a panel discussion at the Business Journal‘s 14th annual wine industry conference on brand development. He spoke with the Journal about the company’s work to bolster its portfolio.

    What’s driving portfolio growth?

    ERLE MARTIN: The best way to quantify or characterize that is new-customer acquisition. We’re doing a better job in working in partnership with distributors and reaching more trade customers. We’re reaching better accounts. We’re making sure brands are aligned with market needs. We now have national accounts representation for on premise and off premise. That didn’t used to be important at our price point, but it is now.

    For direct-to-consumer, we want to make sure we’re driving high-quality foot traffic through the tasting rooms, which translates into sales. When visitors come through and are good candidates for the wine club, then we reach out to them with e-commerce offers. That’s what driving it more than reaching out to new customers.

    How do the brands in the portfolio complement each other?

    MR. MARTIN: The wine business has high fragmentation and a low level of differentiation. How can we have a voice with consumers, trade and media through whatever medium, giving them a reason to select ours when there are thousands of chardonnay, cab and other wines?

    We have worked to construct a portfolio that is complementary by region and variety, especially in a wholesale environment. If you’re in the cabernet sauvignon business, being in Napa Valley is a good place to be. So we’re trying to represent market leaders where we compete.

    In the wine marketplace there is a sizable amount of fragmentation and disorganization. There are a lot of mom-and-pops out there. We would try to minimize overlap in our portfolio. All our wines are based in very high vineyard assets.

    Anything we evaluate would be complementary to what’s in our portfolio and have quality vineyard assets.

    How has the sales and marketing approach changed?

    MR. MARTIN: I couldn’t answer this question without technology being part of the answer. There are a lot more resources at much lower cost and with much more flexibility than there have ever been. There is much more insight into consumer behavior and the behavior of brands on a trade basis. It’s all facilitated with technologies that track depletions at accounts and with high-quality [customer relationship management] applications.

    Less is more. We aim to be as focused and organized and strategically precise as we can be. If you’re selling a $150 Napa Valley cabernet, as we are with Forte our flagship wine, it will not appeal to everyone, so we’re looking to align marketing appropriately. We’re being narrow and strategic in the purchases we make.

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