How To Grow Your Direct To Consumer Brand | The Gourmet Insider | Chef Wonderful

[Music] And so now you've recently partnered with Vintage Wine Estates on the new lifestyle platform called Shop Mr. Wonderful. How did that come about, and have you had a long-standing relationship with Vintage Wine Estates?

It's a remarkable story and it's so unusual how this came together. I'll tell it to you.

Years ago, on Shark Tank, there was a deal to sell single-serve wine, buy the glass in a container that was sealed with nitrogen gas. I was all over it because I love that whole idea, and I thought this is such a big idea. I have got to go to the number one wine bar on earth, and that is Costco. That woman is Annette Alvarez-Peters. At the time, she was the most powerful woman on earth because she could buy every Pancho's complete output and still not have enough wine.

So what I decided to do is take a chance. I figured who knows, maybe she's a Shark Tank fan, maybe she saw the episode last night at nine o'clock. Through nefarious techniques, I got her cell phone number because I know a lot of people that work on the internet. I called it and I left her a message. I knew she wouldn't answer because she wouldn't know my number.

And 20 minutes later, the phone rings and it's Annette Alvarez-Peters on the phone. I said to her, "Annette, I'm so honored you called me back." And she said, "You were rude to Barbara last night on Shark Tank. What do you want?" I, and she said, "Look, I don't know if I like the single-serve idea, but I'll let you pitch it to me. I'm going to Hawaii. I'm going to be one hour in John Wayne Airport tomorrow, I'll give you 45 minutes of that time if you show up at the airport lounge and bring your wife with you. I want to meet what kind of woman would marry a guy like you."

I said, "Okay," because she knew that my wife was involved in blending the whites. We flew to John Wayne Airport. We met with Annette Alvarez. I brought the prototype of the single-serve. I really wanted to go into partnership with Costco on it. She had the prototype in her hands; she turned it over, it was above her purse. She turned it over to look at the seal, and it leaked into her purse. Oh, was she pissed!

And that was the end of that idea. It was over. But she said to me, "Listen, Kevin, you've got a brand. People trust your palate. They know you by the millions as the wine guy. If you want to play in the wine business like I think you do, because I did, you can't ship a few cases. 97% of wine in America is, what she told me, is sold for under $15.99 a bottle. You have to be able to ship me millions of cases. Millions of cases. And you can't do that on your own. You're going to do some kind of a vanity thing, go buy a vineyard, make 25,000 cases, and go out of business. Go meet Terry Wheatley and you know the whole crew over at Vintage Wine Estates, which we already have a relationship with. That’s Pat Roney, Terry, her, and that whole crew there. They service Costco. Cut a deal with them, launch your wine, then call me."

And that's exactly what happened.

Now, why do wine drinkers need a platform like Shop Mr. Wonderful? What benefits do they receive?

So we have a huge, both problem and opportunity in America. This last two years has proven that there's a huge appetite direct to consumer in the wine business. The big challenge for the industry is customer acquisition cost. All of these wine clubs, all of these people that have tried to do this, all of these online businesses have failed for one singular reason: they cannot get their customer acquisition cost below the lifetime value of the customer no matter what format they try.

Now, in that area, I have a huge advantage. Hundreds of millions of people watch me every week on television. I'm very fortunate and they know me over all of this time as someone who loves wine, curates wine, makes wine, and when it comes to wine, they understand, particularly those who bought from me already, when it comes to wine, I have their back. I know how to find the best ones at the best price that people are going to like. I know the American palette, whether it be in Southern Florida or in upstate New York or whether it's in Washington State on a New World Pinot. I know what they like, I know what they buy, and I know why they buy it and what price they're willing to pay for it.

So the whole idea of Shop Mr. Wonderful is to go beyond just my own or very fine wines and curate some of the best wines on earth for them at whatever price point they want to work at. If they want to work at under $15, I'll find the best wine for them. If they want to be in the mid-market at that $45 or $49 to $69, I'm there. If they want to go into premium, $150, $200, I'm there. I'm going to get them the best wine at that price point. That's the whole idea.

And in partnering with Vintage Estates, which now I'm a shareholder in because, you know, they went public recently, and I decided to take on a position as an equity shareholder, we have 3,000 acres under production now. We're one of the largest consolidators in the world of wine production and logistics, the ability to ship it. So I'm thinking really big here because the pandemic has proven to millions of Americans they'd like someone to ship them wine that's good, that they like at the right price point. They don't want to carry a 39-pound box of wine from the store. We'll ship it to them direct. I think the business opportunity is huge.

Now, how do you go about picking the wines for the platform? I'm sure you have a team helping you with this, but why are they selecting the wines they're selecting?

No team! I try them all myself. You cannot... you cannot people in the wine business. You have to be able to be honest with people, tell them what's good and what's bad. You have to eat your own cooking, and you have to drink your own wine. Everything on that site, I have personally sampled every single drop. It's got my name on it.

Now how do you keep track of all that, Kevin? Do you keep a journal? Do you use a program of all your tasting notes?

I do actually, but my favorite is simply a mole blonde writing pen, an ink nib pen and a book that I keep my notes in. Because, you know, I start every day when the market closes at four o'clock. I always have a glass of white wine, Montreshe. Sometimes I go Old World Shard or I go New World Shard, often my own. I always start with a glass of white. And when I'm doing that, I'm always sampling new Shards because people send me all types of output, all kinds of wines. I have hundreds of wines to try.

And I also talk to people about them first. So I have... I operate five commercial sellers around the world. I buy wine futures, I trade them. I have partners. We buy divorce sellers. Sometimes, when it comes to sampling wine, it's that glass of white at four and then the decision: which reds are we going into with the meal? Are we going to go Pinot? Are we going to go Cabs? Are we going to try Zinn, Syrah? Where are we going?

In doing so, I'm sampling new wines with my friends and family and asking their opinion too, but ultimately, it's my decision.

And what do you look for in a wine, Kevin? Does it depend on the grape variety?

No, I really don't want people to get tied up in varietals. You know, in America, we start with two verticals: Chardonnay is the most popular white, and that's great, and Cabernet Sauvignon is the great American red wine. But what I've tried to do over the years, in communicating with people, whether I'm selling it on QVC or whether I'm selling it on Shop Mr. Wonderful, is if you like a red, if you like a white, let me take you on a journey into other ways of enjoying red wine.

Because if you like a great big spicy Cabernet Sauvignon, I bet I can find a Zinn that you're just going to love. And maybe you've never tried a Zinn. Or how about a meritage? How about a blend that you've never tried? How about a New World Pinot? How about a New World Pinot with that Thanksgiving dinner, even with a turkey?

But I take copious notes, and I do a lot of video tasting notes that we post of me tasting the wine, describing the experience, what's good and bad about it. And I think after all this time, people have begun to trust me because they bought from me, they like what I'm giving them, and I'm trying to expand their horizons. And the only way you can do something like this is you've got to love wine, you've got to drink wine, you have to breathe it, live it, drink it, taste it, and be honest about it. And people will trust you.

What are the types of questions that you ask people if you're going to a dinner? You're hosting people at your house and they'd say, "Kevin, pick me a bottle of wine." What are some of the questions that you ask them to find that right bottle for that specific individual?

You know, I don't ask them if they like white or red. I never ask that. I say, "What do you like in a wine? What is it that you like in anyone?" They may say, "I love sweet wines," and then I'll sneak into the cave and I'll pull out a Moscato, you know, something to start the meal with that classic beautiful petally Christmas. They just have to tell me the direction to go, and I will find multiple offerings for them.

If they say something like, "Oh, I like a big spicy wine," or "I only like red wines," I say, "Forget about that! I'm going to get you a white one that you're going to love," even though you like reds. Obviously, I have the benefit of being able to go into the cellar and pick out all kinds of different wines, but to me, it's like painting with a palette.

I say to them, "Trust me tonight, we're going to go on a wine journey. We've prepared a fantastic meal." I try and do this with eight to ten people, and to me, this is my ultimate beta testing, because secretly, I'm trying wines on them that I'm going to put on, you know, Shop Mr. Wonderful. I want to hear what they say.

Now it's a small sample size, but I have these dinners like two, three times a week, so I might get to 30, 40, 50 people, and I'm gleaning that information. Because I don't want wine snobs, I want everyday people that like trying wine. And then I take them on a journey, and I take my notes, and then I go back to the winemakers and say, "Look, here's some notes I got."

Because I've really started to notice the difference in the regions of what women like. Women buy a lot of white wine, what they buy in Florida versus what they buy in California. You know, the unoaked Shards that really took off a couple of years ago, that really came out of Florida in those, you know, that whole Cuban vibe, that whole melting pot of getting a much crisper Montrechet, more like less oaky, less buttery. That came out of Florida; I saw it happen there.

Kevin, you kind of mentioned the average person purchasing wine. Why are sometimes people turned off by wine? Is it that snobbery that they're kind of afraid from, that they kind of shy away from getting involved in wine in general?

No, they're nervous about it. They're nervous about taking it to a friend's place for dinner. They're nervous about giving to their boss as a gift. They're nervous about opening it up and not knowing anything about it. It's the biggest deterrent to trying wine. People are nervous because they think you have to be a wine snob. And I'm really trying to push away from that.

With Shop Mr. Wonderful, I really, really want to know one thing: what is your price range? Not everybody can afford a $150 bottle of wine, and if that's not where you want to go, we don't need to go there. Tell me what you can afford, and I will get you the very best wines at that price point.

At the same time, I'll give you the opportunity to sample different varietals that you've never tried before, and then take your own notes. If you want, I will ship you another case of wine along the lines of what you just liked. But I'm really, really trying to get people to expand their horizons by just trusting me to really marry them to the right price point. Because I don't want people to overspend what they can't afford on wine.

Wine is about family, it's about friends, it's about conversation, it's about all of those things, and that's why I love it so much. It's half art, half science. Blending is really, really hard. Getting it right is hard. Being consistent one year to another with a Larry Fine One Chardonnay, I've got to make sure the people that love that Shard that buy it by the case are not going to be disappointed in this year's offering. So there's work to be done there. But I love doing it.

Mr. Wonderful, one last question. Which excites you more: a great bottle of wine or positive cash flow?

[Laughter] You know, you just reminded me of a story that combines both of those together. I don't remember if you recall the height of the pandemic - March, April, May - that period when we were all locked down. I was at our home in Miami Beach. The beach, for the first time ever in 200 years, was closed to people. Nobody was on it. The market was incredibly volatile. My portfolios of, you know, start of the operating company, we were having swings in the S&P of 11 and 12 in an hour.

In an hour. And you know that rule: I have a glass of white Chardonnay at four o'clock. I remember the day the market went down eleven and a half percent in the last two hours. My portfolio was decimated. I opened up the Shard. I poured it into a glass. I went out on the balcony and I looked out at the beach and I noticed there was a whole pod of pelicans sitting on the water close to shore inside of the sandbar.

And I saw this giant, giant... it looked like a rowboat. It was dark, but it was a great white shark. And it had actually done something they never did: it came within 10 feet of the shore because there were no people. I wasn't scared of anybody, and it started eating the pelicans with my Chardonnay there. I thought to myself - I thought I had a bad day; look at those guys.

And I know that's a crazy story. The next day, the market went up twelve percent. It was crazy. I don't know why that all fits together, but that Chardonnay was with the good times and the bad times.

Chef Wonderful here, and I am totally freaked out! I'm the clumpy gas famous winery in Napa. Yeah, I'm working on some of my new recipes. Maybe I drank too much wine because now I'm sitting beside Dog Man and Rabbit Woman. This is crazy. I'm freaking out!

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