Interview with Bill Deutsch
This has been one of the biggest weeks for the wine industry in recent memory. Not only did Foster’s ceo Trevor O’Hoy surprisingly resign on Monday, but Constellation Brands announced it had sold 7 of its wine brands to the newly-formed Ascentia Wine Estates for up to $234 million.
Based in Sonoma, Ascentia is led by Jim DeBonis (former exec at Beam Wine Estates), and is backed by several investors, including W.J. Deutsch and San Francisco-based private equity firm GESD Capital Partners. Deutsch will serve as the sole marketer and distributor of the brands, while GESD helped finance the deal.
WSD has the chance to sit down with Bill Deutsch, founder and Chairman of W.J. Deutsch. He founded the company in 1981, which now carries such brands as Yellow Tail from Australia, Kunde Estate and Esser Vineyards in California, Georges Duboeuf and HobNob Vineyards of France and J. Vidal Fleury and Pierre Sparr of Italy. Bill’s son Peter is ceo of Deutsch, giving the company two generations of leadership.
Wine & Spirits Daily: What is your prospective on Ascentia and why did Deutsch decide to enter the deal?
Bill Deutsch: We decided to go into the deal because we want to expand our portfolio in California. We want to remain diversified. And we think these are fabulous brands that will compliment our import and even our California portfolio, which right now includes Kunde Estate Winery and Esser Vineyards. And these are good complimentary brands.
We also believe that the wine business has a fabulous future and as long as we have two generations in place here owning the company why not do what our distributor’s would like us to do and expand the portfolio.
WSD: In your opinion, what is the future of these brands?
Bill: Oh we’re very, very optimistic. We think these brands are known. The wines are well made and we are looking to taking each one to even greater heights.
WSD: What do you see as the growth opportunity in the U.S. market?
Bill: I think more people are drinking more wine. I think that the health aspect is something that the American consumer is very cognizant of. I think these wines all fit into an affordable price point that people who are looking for wine enjoyment will want to try. Good wines are here to stay and they’re a welcome addition to our portfolio.
WSD: How does this deal help change Deutsch and the company’s ultimate growth strategy?
Bill: It gives us more of an equity position. We have the organization already in place to market and sell these new brands. And it makes us even more important to our valued distributors throughout the United States. And fortunately the brands do not conflict with what we already have in our, what we consider a very prestigious portfolio.
WSD: How long have you been working on this deal?
Bill: Since early February of this year. I was down in Florida for a mini vacation. Received a confidential phone call and there it went. There went my vacation.
So we had a real team effort working on this very closely with GESD, the financial people. And I had occasion to speak with Rob Sands, Chairman, two weeks ago, and told him that both his dad and grandfather, who are now deceased, both of whom I knew, would be very proud of what has been accomplished here. And he got a little choked up and agreed because I knew both his dad and his grandfather.
WSD: How is Yellow Tail doing? Australia is kind of going through a rough spot right now and a lot of their exports to the U.S. are struggling. Has Yellow Tail seen any of that?
Bill: Well, the growth, which has been phenomenal, is now in excess of eight million cases and has pretty much leveled off.
I was with the Casella’s two weeks ago in Cicely where they had a four day convention and brought their importers in from all over the world in non-Asian countries to meet at the birthplace of John Casella’s two parents. It was a phenomenal meeting and the winery is now up to thirteen million cases of exports around the world.
The US leads in volume, and we’ve leveled off. However, we’ve gotten some great publicity on the very good Pinot Grigio made by Yellow Tail. Consumers report just wrote it up as the best buy Pinot Grigio.
WSD: Congratulations.
Bill: And we think we can build that to a million cases. So might see some new increases coming along. We also see growth in the blends, the various blends of Yellow Tail. They’re beginning to grow. Where Shiraz and Chardonnay have leveled off, we’re definitely seeing growth in the blends.
WSD: Interesting.
Bill: And Casella has the wine with all of the rainfall, the shortages, and what have you. They’re fabulous connections with growers in Australia have resulted in them being able to acquire enough grapes to fill the worldwide needs. This was discussed at the convention.
WSD: Is there anything else you’d like to discuss?
Bill: Well, we’re very, very excited.
I told you about the family aspect. I mean that’s something very nostalgic to Rob Sands and his brother and myself. That’s not financial that’s just nostalgic. And I go back to 1963 with his grandfather. So what goes around, comes around. And we’re very proud to be representing these wineries.
And with Jim DeBonis out on the West Coast, who has a tremendous feel for these brands because he was involved with them years ago with Beam Estates. It’s the perfect compliment. And we’re looking forward to working together. Peter and I are looking forward very much to working very closely with him.
WSD: Thank you for talking with us today, and again, congratulations on the Ascentia deal and your success with Yellow Tail.
UK DRINKERS CHOOSE VODKA OVER BLENDED SCOTCH
Vodka has replaced blended Scotch whisky as the UK’s best selling spirits in the off-premise for the first time in generations. Young drinkers and an influx of Eastern European vodka has helped grow the trend. Vodka brands like Smirnoff, Absolut and Wyborowa are outselling traditional blended whiskies including Bell’s, Teacher's and Famous Grouse, according to Off Licence News. Although total whisky sales, including expensive single malts, still out perform vodka, experts predict that vodka will take the top spot by the end of the year.
Until Monday, Megan
“We are continually faced with a series of great opportunities brilliantly disguised as insoluble problems.”
John W. Gardner
--------- Sell Day Calendar ----------
Today's Sell Day: 10
Sell days this month: 21
Sell days this month last year: 21
This month ends on a: Mon.
This month last year ended on a: Fri.
YTD sell days Over/Under: 0
WINE & SPIRITS DAILY
Subscribe or check back issues at: www.winespiritsdaily.com
Send news and comments in confidence to: megan@winespiritsdaily.com
© 2008 Wine & Spirits Daily, all rights reserved. May quote with attribution.
Based in Sonoma, Ascentia is led by Jim DeBonis (former exec at Beam Wine Estates), and is backed by several investors, including W.J. Deutsch and San Francisco-based private equity firm GESD Capital Partners. Deutsch will serve as the sole marketer and distributor of the brands, while GESD helped finance the deal.
WSD has the chance to sit down with Bill Deutsch, founder and Chairman of W.J. Deutsch. He founded the company in 1981, which now carries such brands as Yellow Tail from Australia, Kunde Estate and Esser Vineyards in California, Georges Duboeuf and HobNob Vineyards of France and J. Vidal Fleury and Pierre Sparr of Italy. Bill’s son Peter is ceo of Deutsch, giving the company two generations of leadership.
Wine & Spirits Daily: What is your prospective on Ascentia and why did Deutsch decide to enter the deal?
Bill Deutsch: We decided to go into the deal because we want to expand our portfolio in California. We want to remain diversified. And we think these are fabulous brands that will compliment our import and even our California portfolio, which right now includes Kunde Estate Winery and Esser Vineyards. And these are good complimentary brands.
We also believe that the wine business has a fabulous future and as long as we have two generations in place here owning the company why not do what our distributor’s would like us to do and expand the portfolio.
WSD: In your opinion, what is the future of these brands?
Bill: Oh we’re very, very optimistic. We think these brands are known. The wines are well made and we are looking to taking each one to even greater heights.
WSD: What do you see as the growth opportunity in the U.S. market?
Bill: I think more people are drinking more wine. I think that the health aspect is something that the American consumer is very cognizant of. I think these wines all fit into an affordable price point that people who are looking for wine enjoyment will want to try. Good wines are here to stay and they’re a welcome addition to our portfolio.
WSD: How does this deal help change Deutsch and the company’s ultimate growth strategy?
Bill: It gives us more of an equity position. We have the organization already in place to market and sell these new brands. And it makes us even more important to our valued distributors throughout the United States. And fortunately the brands do not conflict with what we already have in our, what we consider a very prestigious portfolio.
WSD: How long have you been working on this deal?
Bill: Since early February of this year. I was down in Florida for a mini vacation. Received a confidential phone call and there it went. There went my vacation.
So we had a real team effort working on this very closely with GESD, the financial people. And I had occasion to speak with Rob Sands, Chairman, two weeks ago, and told him that both his dad and grandfather, who are now deceased, both of whom I knew, would be very proud of what has been accomplished here. And he got a little choked up and agreed because I knew both his dad and his grandfather.
WSD: How is Yellow Tail doing? Australia is kind of going through a rough spot right now and a lot of their exports to the U.S. are struggling. Has Yellow Tail seen any of that?
Bill: Well, the growth, which has been phenomenal, is now in excess of eight million cases and has pretty much leveled off.
I was with the Casella’s two weeks ago in Cicely where they had a four day convention and brought their importers in from all over the world in non-Asian countries to meet at the birthplace of John Casella’s two parents. It was a phenomenal meeting and the winery is now up to thirteen million cases of exports around the world.
The US leads in volume, and we’ve leveled off. However, we’ve gotten some great publicity on the very good Pinot Grigio made by Yellow Tail. Consumers report just wrote it up as the best buy Pinot Grigio.
WSD: Congratulations.
Bill: And we think we can build that to a million cases. So might see some new increases coming along. We also see growth in the blends, the various blends of Yellow Tail. They’re beginning to grow. Where Shiraz and Chardonnay have leveled off, we’re definitely seeing growth in the blends.
WSD: Interesting.
Bill: And Casella has the wine with all of the rainfall, the shortages, and what have you. They’re fabulous connections with growers in Australia have resulted in them being able to acquire enough grapes to fill the worldwide needs. This was discussed at the convention.
WSD: Is there anything else you’d like to discuss?
Bill: Well, we’re very, very excited.
I told you about the family aspect. I mean that’s something very nostalgic to Rob Sands and his brother and myself. That’s not financial that’s just nostalgic. And I go back to 1963 with his grandfather. So what goes around, comes around. And we’re very proud to be representing these wineries.
And with Jim DeBonis out on the West Coast, who has a tremendous feel for these brands because he was involved with them years ago with Beam Estates. It’s the perfect compliment. And we’re looking forward to working together. Peter and I are looking forward very much to working very closely with him.
WSD: Thank you for talking with us today, and again, congratulations on the Ascentia deal and your success with Yellow Tail.
UK DRINKERS CHOOSE VODKA OVER BLENDED SCOTCH
Vodka has replaced blended Scotch whisky as the UK’s best selling spirits in the off-premise for the first time in generations. Young drinkers and an influx of Eastern European vodka has helped grow the trend. Vodka brands like Smirnoff, Absolut and Wyborowa are outselling traditional blended whiskies including Bell’s, Teacher's and Famous Grouse, according to Off Licence News. Although total whisky sales, including expensive single malts, still out perform vodka, experts predict that vodka will take the top spot by the end of the year.
Until Monday, Megan
“We are continually faced with a series of great opportunities brilliantly disguised as insoluble problems.”
John W. Gardner
--------- Sell Day Calendar ----------
Today's Sell Day: 10
Sell days this month: 21
Sell days this month last year: 21
This month ends on a: Mon.
This month last year ended on a: Fri.
YTD sell days Over/Under: 0
WINE & SPIRITS DAILY
Subscribe or check back issues at: www.winespiritsdaily.com
Send news and comments in confidence to: megan@winespiritsdaily.com
© 2008 Wine & Spirits Daily, all rights reserved. May quote with attribution.
posted at 10:36 AM
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