The SOMM Journal

May 2014

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26 { THE SOMM JOURNAL } JUNE/JULY 2014 { business innovation } TALK ABOUT VERTICAL INTEGRATION. From grapes to graphic design, from custom crush to fulfillment, avant-garde Terravant Wine Company is at the fore- front of the wine industry. Founded in 2007 by Lew Eisaguirre, a business consultant and entrepreneur with a background in technology, soft- ware and real estate, Terravant is the country's premier full-service private label wine company. Its $22 million, 45,000-square-foot facility in Buellton, in the heart of Santa Barbara wine coun- try, is the largest of its kind. Chances are you've seen or tasted a Terravant- produced wine without even knowing it. Private labels make up around 50 percent of Terravant's business, says Eric Guerra, SVP, Sales & Marketing, who has launched more than 450 labels in a career that saw stints at Mumm Napa and Kendall-Jackson before landing at Terravant. As Guerra explains, there are two approaches to creating and naming pri- vate labels. Companies that have significant amounts of equity in their own brand—such as upscale Neiman-Marcus, for example—may choose to name their wine brand epony- mously. Others may have Terravant mint a new wine and brand name to appeal to their particular consumer set. Terravant has developed labels for the likes of Loews Hotels & Resorts, California Pizza Kitchen and B.B. King's Blues Club, among other on-premise and corporate clients; but 80 percent of the company's private labels are for the off-premise market, where huge grocery chains—including Hawaii's Foodland, the East Coast's Food Lion, Safeway, Albertson's and Target—move major quantities of Terravant- created wine. As Guerra remarks, "We service the larg- est in the industry." Private labels are "an absolute growth industry," according to Guerra, with Terravant producing more than 65 of them at present, in a range of demographically targeted price points. "In Europe, private labels are very big and occupy large amounts of shelf space," Guerra notes. "Here, every retailer is thinking about them. They give them control over the brand, and no price competition with people down the street. Retailers have private label cheese, etc.; they want to sell as many of their own products as possible." Not only does Terravant produce the wines, but their vertically integrated business model takes care of details including federal and state compliance, trademark registration and fulfillment. They even maintain a full-service in- house branding and graphic design company, Switchcraft. As if that's not enough, Terravant is also the Central Coast's largest custom-crush facility, where many noted vintners make their wines. Oh, yeah—there's also an on-site restau- rant, Avant Tapas and Wine, offering 80 wines by the glass. One final—and increasingly important—part of Terravant's business lies in its own national brands, which the technology-driven com- pany approaches with the same cutting-edge vision as it does its clients' labels. Just one example: For one of its proprietary brands, Spin the Bottle, Terravant uses patented len- ticular technology to animate the label—a first for the wine industry. All in a day's work for powerhouse Terravant. As Guerra put it: "We need to be the Apple of this industry." Wine in the Vanguard FROM PRIVATE LABELS TO NATIONAL BRANDS, TERRAVANT WINE COMPANY DOES IT ALL by David Gadd Just a few of the many private labels that Terravant has created for on- and off-premise clients. Context is the private label for all Loews Hotels & Resorts properties; Insomnia was created for the North Carolina–based Food Lion grocery chain; Ternion is a private label for Foodland in Hawaii. Spin the Bottle is Terravant's own national brand. For the novel packaging, Terravant uses lenticular technology to create the wine world's first animated wine label. Somm Journal June/July.indd 26 5/9/14 12:08 PM

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