INTERVIEW: BOB SPUCK OF WINESTYLES
WSD had the chance to sit down with Bob Spuck, president and CEO of WineStyles, the largest national wine franchise in the country which recently opened its 100th store. WineStyles was named the 6th best new franchise in 2007 by Entrepreneur magazine in its annual "Franchise 500" issue, and has built a business on “demystifying wine.” So let’s take a look at what Bob had to say.
Megan Haverkorn: In your press release, you describe yourself as a “national franchise demystifying the wine shopping experience.” How, exactly, do you do that?
Bob Spuck: The truth is more people are drinking wine and it seems to be the “in” thing to do, like going to Starbucks and things like that. About 70% of the wines in our stores are usually wines you can’t get someplace else, like Total Wine or Speck’s or ABC. We have a percentage of our wines that are private label, where we go to the winery, own our own label and distribute it nationwide. Some of our wines are negotiated exclusively through the distributors in the local area. So people come to our stores and find a wine that they enjoy, but can’t really get it anywhere else.
The key to our system is our set up. We display our wines by what we call “style,” or in other terms, taste categories, rather than by varietal or by country and things like that. If you know what kind of wine you like or the person you are buying the wine for likes, we take you to a section of the store—it might be bold, it might be mellow, it might be rich—and once you decide that, a Cabernet or a Chardonnay might be in two different taste categories, but it’s the same varietal.
We find it very easy. Each one of our wines has a little description next to it as to where the wine came from, what it’s about, and that kind of thing. Usually there’s a little fun to the description, and the employees are knowledgeable about the wines they have in the store. And of course it’s a continually changing process because wine is a disappearing asset. So our job at corporate is of course to build our brand and to give the person coming through the door an enjoyable experience and enjoy a good wine at a good price that’s going to fit their taste category.
MH: What are your most popular brands?
BS: Well most of the brands we sell are private label because really it’s no different than non-private labels. We’ll go to a winery, like St. Supéry, who makes a great Sauvignon Blanc, and we’ll take that and sell it under our Maxwell Creek brand. It’s the same thing, and it sell for two dollars less. So our best brands are brands that are our own. We don’t try to sell brands, we try to sell wine styles as the brand and people have faith in our system and the wines we’re able to acquire.
Now, we do have about 30% of the wines in our store that we call comfort brands, and these are brands that are available in other places, depending on the neighborhood. Usually available at market price, they’re meant to make our customers feel confident and comfortable because they are familiar with those brands. But we’re not going to have a Kendall Jackson or Yellow Tail or any of those commercial brands that are sold at Costco. That’s not who we are.
MH: So what, exactly, is the difference between you guys and other retailers, Costco for example?
BS: Most of our wines are from small, esoteric, unique wineries from all over the world, of which there are millions. I mean, in total they dwarf the big wineries, but it seems like Constellation and the other big companies dominate the market through their distributors.
MH: What demographic do you think is one of the most influential right now in the wine industry?
BS: Actually the age is getting younger but it’s nowhere near the high percentage of people in the 35-65 range. Our demographics are 65% women, probably educated, have some college, have discretionary income, live in a neighborhood of a certain income level—dual household income level. The taste categories are pretty much the same, where 40% of our sales are bold, especially with men. With men alone, probably 75% are bold.
Our stores are event driven and wine club driven, meaning that people more or less belong to our store and they enjoy coming on a Thursday or a Tuesday. We’ll have Merrill Lynch or somebody in there giving little seminars, or having wine tastings, or birthday parties. We also have chefs from the area come in and share their experience; they promote their restaurant we promote the wine that they suggest.
MH: Sounds like a lot of fun.
BS: Yeah, and that’s what it’s about, fun. That’s what wine is supposed to be.
MH: Why do you think wine is growing so fast right now? What’s changed?
BS: Because it tastes good. It’s interesting. We survey people leaving our stores, and we ask them, ‘What’s the best, what’s the number one reason, what’s the best thing about wine?’ Most people usually say ‘taste,’ but of course the number one answer is that it makes a great gift.
I think it has a sophistication level as people’s communication and education levels rise. It has the same connotation as Starbuck’s. Why do we go pay 3 bucks for a cup of coffee? Because we want to be around other people who are like us, and we want to hang out. People that come into our stores to enjoy our wine events and things like that are looking for people of the same demeanor and the same demographic.
MH: How are retailers specifically playing a part in that growth, specifically WineStyles?
BS: Well, we have small stores. Our stores have about 140 wines in them. They have a wine clubs, they have the events, they have all the things they do to get the people in the neighborhood. Some of our stores have 500 wine club members where the people buy two bottles of wine. Since most people drink more than two bottles of wine, they keep coming back to their store and our retailers work with the company and the distributors and they adjust their inventory to what’s appropriate for their neighborhood.
As retailers, we have marketing programs, we have email programs and we have gift baskets.
MH: What is your relationship like with the other branches of the three tier system?
BS: I can tell you what it used to be and I can tell you what it is. When we first started WineStyles and we had really no stores, they kind of viewed our business as a folly. They didn’t believe that it could be done, especially with competition from Total Wines and Speck’s and all those huge depot type deals. We never believed that was our market.
When they open those big stores like Total Wines and so on, it certainly disrupts the market, but they can’t be everywhere. They can only open one store and can’t open another one for 20 miles, so we fill in all the area in-between and generate convenience, choice, and fun. And that’s really what we feel people are going for, what people want to do.
So we started out with six distributors around the country in different states, and they were very leery about bringing wine in for WineStyles because once they buy those brands, they own them. But they bought into our concept. Either I’m a good salesman or they saw the light or whatever. Now that we have 100 stores and we’ll probably buy $25 million worth of wine next year, it’s a completely different story and everybody beginning with Southern Wine & Spirits has been trying to make relationships with us because we do pretty good business and we pay our bills.
MH: Do you have a history in the wine industry?
BS: No, I don’t. I’m a franchisor. I’ve built many companies. I’ve been in franchising all of my life. I look for things that people want and built different cutting edge concepts and so on. But the people working for me have tremendous experience; people that have been distributors, people that buy the wine and people out in the field.
MH: Where do you see WineStyles going in the future?
BS: Well, I’ll take my crystal ball out. We’re selling—we use the word awarding— we are awarding 6 to 10 new franchises a month. We wish everyday was December. I expect us to probably open between 50 to 100 new stores every year. And we will continue to be international as we already are.
It’s just a different way of fulfilling the needs of the customer. We see Total [Wines] and these guys come into markets and watch the liquor stores fold and the different independents fold. I think our concept provides a need and I think that’s what selling is all about: providing a solution to somebody’s need. People seem to enjoy the atmosphere of the store.
Megan Haverkorn: In your press release, you describe yourself as a “national franchise demystifying the wine shopping experience.” How, exactly, do you do that?
Bob Spuck: The truth is more people are drinking wine and it seems to be the “in” thing to do, like going to Starbucks and things like that. About 70% of the wines in our stores are usually wines you can’t get someplace else, like Total Wine or Speck’s or ABC. We have a percentage of our wines that are private label, where we go to the winery, own our own label and distribute it nationwide. Some of our wines are negotiated exclusively through the distributors in the local area. So people come to our stores and find a wine that they enjoy, but can’t really get it anywhere else.
The key to our system is our set up. We display our wines by what we call “style,” or in other terms, taste categories, rather than by varietal or by country and things like that. If you know what kind of wine you like or the person you are buying the wine for likes, we take you to a section of the store—it might be bold, it might be mellow, it might be rich—and once you decide that, a Cabernet or a Chardonnay might be in two different taste categories, but it’s the same varietal.
We find it very easy. Each one of our wines has a little description next to it as to where the wine came from, what it’s about, and that kind of thing. Usually there’s a little fun to the description, and the employees are knowledgeable about the wines they have in the store. And of course it’s a continually changing process because wine is a disappearing asset. So our job at corporate is of course to build our brand and to give the person coming through the door an enjoyable experience and enjoy a good wine at a good price that’s going to fit their taste category.
MH: What are your most popular brands?
BS: Well most of the brands we sell are private label because really it’s no different than non-private labels. We’ll go to a winery, like St. Supéry, who makes a great Sauvignon Blanc, and we’ll take that and sell it under our Maxwell Creek brand. It’s the same thing, and it sell for two dollars less. So our best brands are brands that are our own. We don’t try to sell brands, we try to sell wine styles as the brand and people have faith in our system and the wines we’re able to acquire.
Now, we do have about 30% of the wines in our store that we call comfort brands, and these are brands that are available in other places, depending on the neighborhood. Usually available at market price, they’re meant to make our customers feel confident and comfortable because they are familiar with those brands. But we’re not going to have a Kendall Jackson or Yellow Tail or any of those commercial brands that are sold at Costco. That’s not who we are.
MH: So what, exactly, is the difference between you guys and other retailers, Costco for example?
BS: Most of our wines are from small, esoteric, unique wineries from all over the world, of which there are millions. I mean, in total they dwarf the big wineries, but it seems like Constellation and the other big companies dominate the market through their distributors.
MH: What demographic do you think is one of the most influential right now in the wine industry?
BS: Actually the age is getting younger but it’s nowhere near the high percentage of people in the 35-65 range. Our demographics are 65% women, probably educated, have some college, have discretionary income, live in a neighborhood of a certain income level—dual household income level. The taste categories are pretty much the same, where 40% of our sales are bold, especially with men. With men alone, probably 75% are bold.
Our stores are event driven and wine club driven, meaning that people more or less belong to our store and they enjoy coming on a Thursday or a Tuesday. We’ll have Merrill Lynch or somebody in there giving little seminars, or having wine tastings, or birthday parties. We also have chefs from the area come in and share their experience; they promote their restaurant we promote the wine that they suggest.
MH: Sounds like a lot of fun.
BS: Yeah, and that’s what it’s about, fun. That’s what wine is supposed to be.
MH: Why do you think wine is growing so fast right now? What’s changed?
BS: Because it tastes good. It’s interesting. We survey people leaving our stores, and we ask them, ‘What’s the best, what’s the number one reason, what’s the best thing about wine?’ Most people usually say ‘taste,’ but of course the number one answer is that it makes a great gift.
I think it has a sophistication level as people’s communication and education levels rise. It has the same connotation as Starbuck’s. Why do we go pay 3 bucks for a cup of coffee? Because we want to be around other people who are like us, and we want to hang out. People that come into our stores to enjoy our wine events and things like that are looking for people of the same demeanor and the same demographic.
MH: How are retailers specifically playing a part in that growth, specifically WineStyles?
BS: Well, we have small stores. Our stores have about 140 wines in them. They have a wine clubs, they have the events, they have all the things they do to get the people in the neighborhood. Some of our stores have 500 wine club members where the people buy two bottles of wine. Since most people drink more than two bottles of wine, they keep coming back to their store and our retailers work with the company and the distributors and they adjust their inventory to what’s appropriate for their neighborhood.
As retailers, we have marketing programs, we have email programs and we have gift baskets.
MH: What is your relationship like with the other branches of the three tier system?
BS: I can tell you what it used to be and I can tell you what it is. When we first started WineStyles and we had really no stores, they kind of viewed our business as a folly. They didn’t believe that it could be done, especially with competition from Total Wines and Speck’s and all those huge depot type deals. We never believed that was our market.
When they open those big stores like Total Wines and so on, it certainly disrupts the market, but they can’t be everywhere. They can only open one store and can’t open another one for 20 miles, so we fill in all the area in-between and generate convenience, choice, and fun. And that’s really what we feel people are going for, what people want to do.
So we started out with six distributors around the country in different states, and they were very leery about bringing wine in for WineStyles because once they buy those brands, they own them. But they bought into our concept. Either I’m a good salesman or they saw the light or whatever. Now that we have 100 stores and we’ll probably buy $25 million worth of wine next year, it’s a completely different story and everybody beginning with Southern Wine & Spirits has been trying to make relationships with us because we do pretty good business and we pay our bills.
MH: Do you have a history in the wine industry?
BS: No, I don’t. I’m a franchisor. I’ve built many companies. I’ve been in franchising all of my life. I look for things that people want and built different cutting edge concepts and so on. But the people working for me have tremendous experience; people that have been distributors, people that buy the wine and people out in the field.
MH: Where do you see WineStyles going in the future?
BS: Well, I’ll take my crystal ball out. We’re selling—we use the word awarding— we are awarding 6 to 10 new franchises a month. We wish everyday was December. I expect us to probably open between 50 to 100 new stores every year. And we will continue to be international as we already are.
It’s just a different way of fulfilling the needs of the customer. We see Total [Wines] and these guys come into markets and watch the liquor stores fold and the different independents fold. I think our concept provides a need and I think that’s what selling is all about: providing a solution to somebody’s need. People seem to enjoy the atmosphere of the store.
posted at 12:55 PM
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