Innovation And Acquisitions At Core Of Vintage Wine Estates Strategy

Food & Drink

After 30 years of working in the wine industry, Terry Wheatley, President of Vintage Wine Estates, and her team took the company public in June of 2021, making her the first female President of a publicly traded U.S. wine company. The $690 million IPO was achieved after entering a merger agreement with London-based Bespoke Capital Acquisition Corp.

Now, after a little more than a year at the helm, and despite a challenging stock market and supply chain issues, revenue for Vintage Wine Estates was up 33%, ending the fiscal 2022 year at $294 million. In a recent interview, Wheatley reflected on her first year, and described the strategy components that have made the company successful to date.

“Our key strategy,” stated Wheatley, “is to grow through innovation and acquisitions. As a company, we have made 20 acquisitions over the last 10 years, and we are continually developing and launching new brands.”

Some of the most well-known wineries in the Vintage Wine Estates (VWE) portfolio include Clos Pegase, Girard, and Swanson in Napa Valley; B.R. Cohn and Kunde in Sonoma County; Laetitia in Central California, and Firesteed in Oregon. Altogether, VWE has over 60 wine and spirits brands totaling around 3 million cases annually, making them the 14th largest wine corporation in the U.S. The brands range from $10 to $150 per bottle.

“We have something for everyone’s price point, and the capacity to grow to 13.5 million cases,” reported Wheatley. “A lot of people don’t realize that we actually have three divisions within the company – our wholesale group, a direct to consumer (DTC) group, and our B2B division. We call this our 3-legged stool, with about 1/3 of our business coming from each division.”

The B2B group focuses on producing private wine labels. For example, VWE works with supermarket chains and other retailers to create store-owned wine brands. They also create special occasion labels, via Windsor Vineyards, for individual consumers who may request a label for a wedding, anniversary, or other event. VWE also bottles wine for other wineries.

This type of diversification is rather rare in the wine industry, and provides VWE with more flexibility. “In this way,” explained Wheatley, “if one division is down, such as the on-premise portion of wholesale during the pandemic, we still have other divisions to focus on. For example, this past year, our DTC segment grew 39%, primarily due to increased tasting room traffic and our strong digital presence.”

Acquisition and Innovation Strategy Components at VWE

When analyzing an acquisition opportunity, Wheatley said that they have a team that vets the prospect to ensure it will be complementary to the complete portfolio. “We look for acquisitions in all three areas of the stool,” she said, “and the acquisition needs to bring something to the dance that we currently don’t have.”

Acquisitions seem to be paying off, because VWE’s fiscal 2022 report states that acquisitions for the year resulted in an increase of $11 million in revenues. However, acquisitions are just one component of VWE’s strategy, with innovation and organic growth being other components. And when it comes to talking about innovation and brand development, Wheatley’s voice takes on an added note of enthusiasm. Perhaps this is because of her strong wine marketing background, with prior positions with Sutter Home, E&J Gallo, and launching and then selling her own successful company, Canopy Management.

“Innovation is my wheel house,” stated Wheatley. “It is what I love to do. I really enjoy working with my team on this. I’ll throw out a possible brand name, and we’ll riff on a story. I’m continually innovating…when I’m driving home at 7pm each evening, and blow-drying my hair in the morning.”

One of the recently developed brands that Wheatley is most proud of is Bar Dog, which is sold in Safeway, Target, Total Wine, and many other stores, as well as online. “The brand is selling very well,” reported Wheatley, “with some of the sales proceeds going to support non-profit rescue shelters.”

Fortunately there appear to be many opportunities to keep innovating at VWE. “Because of our B2B business, we are continually asked to develop new brands for big retailers,” stated Wheatley. “This gives me great joy.” The company is also expanding into cider, de-alcoholized wine, gin, whiskey, and CBD projects.

Helping Women Succeed in the Wine Industry

One aspect of Wheatley’s career, for which many in the wine industry admire her, is her strong support in helping other women succeed. She started Wine Sisterhood, which is an online community that provides women who love wine a space to network with one another. She also serves as a mentor for other women, and has made it a point to hire and promote women into leadership positions.

“Over half of our senior leadership team is female,” she stated proudly. “And the whole marketing department is female. However, it is important to remember that you need good male peer support in order to be a successful female leader. Fortunately, our CEO, Pat Roney, has always been a big supporter of women in leadership positions.”

To date, Wheatley’s strong leadership and focus on innovation seem to be paying off. In October 2022, she was named to the Forbes “50 Over 50” List. She was joined by a group of other very prestigious women, such as Supreme Court Justice Kentaji Brown-Jackon, Dolly Parton, Tory Burch, Sandra Bullock, Martha Stewart, and Tina Turner.

Prior to this, Wheatley was named “Innovator of the Year” by Wine Enthusiast for her career-spanning dedication to innovation in the wine, spirits and beverages industries. She was also recognized as one of the wine industry’s “Most Innovative Women in Food and Drink” by Fortune, WORTH and Food & Wine magazines.

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