Leadership Talk Tracks: Crazy Beautiful Wines

Leadership Talk Tracks: Crazy Beautiful Wines

reap News Updates

Crazy Beautiful Wines was established in 2008 after numerous visits to Argentina starting with a small shipment to the US. This venture has since evolved into a family’s commitment to producing high-quality wines in a one Liter format at an affordable price. Cofounders, Jimmy and Jack Gallivan, partner with farmers, growers, and winemakers to produce select wine varietals from celebrated wine regions around the world.

Grayson Mask: The origin story of your business is tied to a visit to Argentina in 2008. Can you shed light on the context and purpose behind this trip?

Jack Gallivan: Absolutely. The journey began with a trip my dad took in 2006. He and some friends had gone on a quail hunting trip to Argentina. Not being much of a hunter himself, my dad snuck off for a wine discovery excursion. He visited several vineyards, driven by his lifelong interest in wine and his past as a collector. While exploring, he toyed with the idea of buying a vineyard in Argentina upon retirement, given that it’s in the same time zone as Dallas. However, after assessing challenges like the language barrier and the need for on-site management, he deemed owning a vineyard too complicated. Instead, he found local winemakers with exceptional juice who were willing to produce wine under our private label for sale in the US. That became the foundation of our project.

In 2008, Malbec was rapidly gaining popularity in the US market. Though traditionally a French blending grape, it flourished in Argentina, especially around Mendoza. Seeing this trend, we felt it was the perfect product to introduce to the market rather than going with something more common, like Pinot Noir or Cabernet from California. I made my first trip there in 2010. Following that, either my brother and I or my parents would visit Argentina one or two times a year. We’d meet with the vineyard and winery, taste various blends, and refine our product. We’re fortunate to have a trustworthy partner in Argentina who handles much of the heavy lifting. Our favorite part, however, is tasting the wines and selecting our preferred blend for production.

Grayson: When you were handing out wines to friends and family, did you learn anything about what the average consumer wants in a wine?

Jimmy Gallivan: Certainly. We aim for a favorable quality-to-price ratio. Many of the big wines owned by large, sometimes publicly-traded companies, focus on mass production. Their goal is consistency, to make their wine taste identical year after year. Consequently, they may manipulate the wine such that you can’t discern differences between vintages. In contrast, we collaborate mainly with smaller, boutique wineries. These wineries produce wines that may taste slightly different with each vintage due to factors like changing climate conditions. The essence remains consistent, but nuances can differ due to variations in rain, sunshine, and other natural conditions. Our aim is to produce wines that genuinely represent their origins, and we trust our winemakers to deliver on that.

The larger the brand, especially those with over 100,000 case production, the more they might resort to sourcing juice from various places. While the labels remain unchanged, the wine itself is manipulated to maintain a consistent flavor profile. We thrive in the boutique space. While we aim to sell as much wine as possible, it’s crucial for us to maintain controlled production. This ensures that we uphold the quality and standard that we, as wine enthusiasts, would expect for our consumption. Our focus is on authenticity and the genuine experience each bottle offers.

Grayson: Given the context of the 2008 financial crisis, do you believe in hindsight that the decision to hold off on an aggressive launch was the right move? Or do you think the market at that time could’ve supported a bigger play?

Jack: It’s interesting. We did make a move pretty quickly, but we went about it in a grassroots manner. We had this initial gathering with friends and family to get their input on our wine selections, using both store-bought wines and samples from our winemaker. This feedback was crucial in guiding our early decisions. However, our initial foray was purposefully limited in scope. We only targeted New York, specifically Brooklyn, without any grand aspirations for nationwide distribution right off the bat.

Jimmy: Remember, this was during the heart of the financial crisis. Both of us were facing economic challenges in our day jobs. So the goal was to test the waters and build organically. With my partner residing in Brooklyn and being involved in the local wine scene, it made sense to tap into that market. New York became our proving ground, and its success allowed us to think about branching out, with Dallas being the next logical step given our family connections there.

Jack: Exactly, our strategy was to grow incrementally. We expanded our range and presence based on the feedback and traction we received. Concerning your question about the initial customers and the wine bar scene, it was crucial. The wine bar was a testing ground. Our product could be versatile – fitting for casual drinkers, enthusiasts, and even events. The early adopters there helped shape our brand’s direction and narrative. The diverse appeal of our wines, being suitable for various occasions and demographics, became one of our strengths.

Grayson: Is there a significant difference between pitching wines to on-premise establishments like bars and restaurants versus off-premise retail boutique stores?

Jack: Absolutely, they’re two entirely different worlds. For on-premise, our one-liter bottle is a unique selling point and works perfectly for “by the glass” orders. Our strategy is to get our wine featured on menus by the glass. On the other hand, for off-premise, we target larger family-run chains. While we’ve approached giants like Kroger, it’s easy to get overshadowed there, given their extensive range. However, we’ve secured spots in places like Total Wines with our Malbec. Furthermore, with smaller, family-owned shops that have several locations, getting a floor stack can significantly boost our sales volume, benefiting both parties.

Jimmy: From a broader viewpoint, our company’s foundation is built on relationships with independent retailers, especially in markets like New York and Colorado where such retailers thrive. Laws in places like New York City prevent grocery stores from selling wine. This works to our advantage as independent retail buyers are keen on offering unique products. In contrast, large grocery stores typically stock the same varieties repeatedly. Independent retailers were more open to our offerings, valuing our wine’s quality, pricing, and unique presentation. They’ve been instrumental in our growth.

Grayson: Jack, with your background in marketing and consulting for wine brands, are there certain marketing strategies you’ve observed that offer the best ROI for wine brands?

Jack: The most effective approach I’ve found is direct engagement through in-store tastings and face-to-face interactions. It’s all about storytelling and personally connecting with potential customers. While some distributor representatives are excellent, others do the bare minimum. My personal interactions at events or in-store tastings, whether it’s on TCU’s campus or at Central Market, have been invaluable. It’s about educating and exciting people about wine, showing them there’s more than just the usual college drinks. However, scaling this approach is challenging. Our brand isn’t set up to sell wine directly on our website. We’ve ventured into digital marketing, but tracking the customer journey is difficult. Our sales structure is primarily based on the three-tier alcohol system, which means there’s no direct tracking of a customer’s journey from ad to purchase.

Jimmy: The inability to track digital ROI is one of our significant challenges. I can’t see if someone engaged with our ad, visited our site, added wine to their cart, and made a purchase. This limitation isn’t because we lack capability but due to legal constraints and our sales model. If we had a physical location, like a winery or tasting room, we might be able to sell online, but our structure is different. We work with third-party vintner partners, and shipping wine directly would be a complicated affair. I can direct customers to places like wine.com where our products are available, but I don’t have access to their sales analytics or detailed customer data.

Grayson: How do customer bases and market competitiveness compare between places like Dallas vs. New York?

Jack: The Midwest is a prime focus for us currently because it’s somewhat underserved. Coastal regions like New York and California are inundated with a variety of wines, many of which don’t even reach the heartland due to the distributor-centric model. We essentially have to “sell” our wine thrice: to the distributor, then the retailer or restaurant, and finally, the end consumer. This process is time-consuming and often discourages players from trying new brands. People generally lean towards familiar brands. Interestingly, cities like Brooklyn, Boulder, and Austin, which house vibrant young populations seeking unique and non-generic offerings, have been quite responsive to our brand. We’ve noticed similar receptivity in parts of the Midwest.

Jimmy: Absolutely. In places like California, especially Northern California, competition is fierce due to the sheer volume of domestic wines. New York presents its own challenges because it’s a major landing hub for imported wines. So, you’ll find an array of French, Italian, and other international wines there which might not be present in a state like Indiana. Building on that, targeting demographics in their 20s and 30s is strategic. This age group is more experimental, open to trying new brands, and doesn’t strictly adhere to renowned labels. They’re looking for something unique, aligned with their lifestyle and values, which gives us an opportunity to cater to their preferences and introduce them to something distinct.

Grayson: What were lessons you learned from the wine industry or things you’ve noticed within the environment?

Jimmy: The consolidation of distributors has been a notable challenge. As larger distributors buy out smaller ones, fewer independent distributors are available to promote unique brands like ours. This makes market entry more complicated. Additionally, there’s been a surge in new wine brands, fueled by celebrity endorsements and a shifting cultural landscape.

Our newest venture, the sparkling wine “Sparkle,” brought its own set of challenges. We had to build its identity from scratch, even with our existing relationships from Crazy Beautiful Wines. This project reminded us of the intricacies of launching a wine brand. We revisited steps like sourcing, designing labels, and bottling, and then had to pitch the concept to existing partners.
One significant hurdle was finding a distributor who’d champion our brand without letting it drown amidst other brands. Ensuring our wines didn’t get lost in the mix was crucial.

We solved this issue with the following strategies:

We use a “bump-the-dock” strategy in certain areas. This is where we cut out the distributor and simply make a deal with someone who has a trucking company. They can move product from our warehouse to select customers, at a lower charge.

We do a lot of legwork on behalf of the distributor and try to take the burden off them. This includes differentiating our brands versus competitors, managing accounts, researching the market, and marketing to new stores.

We only work with smaller distributors instead of a large-scale distributor. This allows us to have a more personal relationship with the distributor and we won’t get lost amongst hundreds of brands.

We collaborate with a marketing consultant, Terri White of Wheelhouse Libations, who has introduced us to 5-6 new distributors. She represents us and 20 other wine brands to leverage a package deal for new distributors.

 

Jimmy: To add, the logistics during the pandemic were nightmarish. From cork and glass shortages to French wine tariffs skewing pricing, followed by global shipping chaos, it was a perfect storm. And even now, we’re experiencing delays, like with our shipment from Argentina. During the pandemic, distributors downsized, meaning we lost familiar contacts and had to reintroduce our brand to new hires. The constant need to re-educate and re-familiarize distributor reps with our products and story was an added challenge.

Jack: Yes, distributor reps are essential for our brand’s reach. They’re essentially our extended sales team. However, with them representing multiple brands, it’s crucial they’re well-versed with our brand and its unique selling points. The introduction of virtual meetings post-pandemic has been beneficial. It’s allowed us to directly communicate our story and wine’s uniqueness to these reps, ensuring they are equipped to promote our brand to potential buyers.