July 2014

Beverage Trade Network Interview with Steve Bird

By: Beverage Trade Network

Steve and Caroline Bird of Steve Bird Wines, New Zealand.

After completing his degree in wine science, Steve Bird started building his career as a winemaker in the New Zealand wine industry with John Hancock at Morton Estate before moving on to Thornbury Vineyards. In 2003, at Thornbury, he was awarded Wine Spectator magazine's highest ever rating (93) for a Sauvignon Blanc. Steve developed the Thornbury brand for close to ten years before selling the label to a bigger company. Soon after, he founded Steve Bird Winery and continued following his passion for wine making.

With a long time focus on the North American market, Steve also has a strong understanding about what it takes to make a brand successful and has helped many producers realize their vintage and market objectives as an international wine consultant. We interviewed Steve Bird on his distribution strategies and what it takes to make a new brand into a best-selling premium wine label.

BTN: Building A premium wine brand into a world renowned wine label is hard. What did you decide to concentrate on in the very beginning? In other words, what steps did you take in order to ensure you were going to be successful with Steve Bird wines?

Steve: We had always wanted to have the business as an export oriented business. From our perspective, it's pretty easy to understand. We have a market of four million people down here. There's not a lot of people in New Zealand to drink our product. I guess the catch for U.S. was that we wanted to make ultra-premium wine in NZ-we really wanted to make something at the premium end-and here, if you're not exporting, you are not in the game.

For us, the target has always been the United States. We started in 16 years ago with the Thornbury brand back when New Zealand was selling something around 100000 cases a year to the U.S. We were fortunate to be selling around 10000 cases a year and to have almost 10% of the market. We sold that business to a larger winery back then and after, when we started Bird just before the global financial crisis, the game plan was to be back in there again and take advantage of all those connections we had in North America, particularly in the States. We really haven't changed our game plan a great deal. Of course, we've had to tread water waiting for things to come around alright from the recessions and the credit crunch, but we still see North America as the primary market for our premium wine. The fundamentals of that plan are that people understand New Zealand fine wine in North America; they speak English and they understand varietal labeling. We also have some family connections in the U.S. and have developed some business relationships there that have stood the test of the time. We enjoy selling in that part of the world and we like to think that people in North America understand what we are trying to do with these really bright, fresh, lively styles of wine you get from New Zealand.

BTN: It's true, New Zealand has developed a reputation for producing some very crisp and fresh varietals. Is there a specific reason that you chose to concentrate on producing Pinot Gris, Sauvignon Blanc, and Pinot Noir for the North American market?

Steve: We have a very strong sense that flavor is king. You learn a lot of things when you work your way through this industry. One of the things we've learned is that people in the U.S. are not into delayed gratification. When they taste stuff, they want it here and they want it now and they need to be impressed immediately. What we've discovered about the things that deliver for New Zealand, the things that people expect from New Zealand, is immediate flavor-those primary fruit characters.

   Bird Big Barrel Pinot Noir

Sauvignon Blanc is a no brainer. It just stands out of the glass and screams its name at you. Well, Sauvignon Blanc from Marlborough does at least!

With a second white varietal we wanted something at the other end of the scale. Something that wasn't so in your face. Pinot Gris was the natural choice for us. It's not so distinctive in its varietal character. Rather than scream at you from the glass, it sort of quietly walks up beside you, taps on your shoulder and whispers in your ear.  I think that's a good way of describing what we were looking for too.

BTN: That's a very romantic notion, and that's the idea right? Wine has always had this age-old allure associated with it and what better way to tap into it than with an elegant Pinot Gris that can also capture the attention of the dedicated and growing customer base in the U.S.?

Steve: Well that's just what it does! It so much more subtle and gentle. It's the antithesis of Sauvignon Blanc, as far as white grapes go. Pinot Gris's popularity has seen a recent surge in the U.S. with Oregon and Washington's growth, which doesn't hurt either!

With Pinot Noir... Every boy who wants to be a winemaker wants to do great things with Pinot. In New Zealand, every kid goes to school and every boy wants to play rugby and be an All Black. Growing up as a wine maker, you want to be a great Pinot Noir maker. It's the ultimate challenge.

One of the things I really love about Pinot from New Zealand is the immediate flavor, the wonderful expressions of pure fruit. Red berries, black berries, all those types of fruit. That speaks volume of where we live and the cool climate. The purity of the climate we live in provides excellent conditions for the Pinot Noir grape. The primary fruit flavor gives you so much more to work with. As wine makers, we can explore the complexity of the grape; Pinot Noir gives U.S. the whole gambit of wine making choices.

For us, just as an instance, We choose to use very large cooperage-9000 L-and we choose to use a very low new oak content because we want the primary fruit flavor to really champion through. The reason we use very large oak, and we use oak at all, is to generate some degree of complexity, outside the use of stainless steel, that gives some legitimacy to Pinot as a varietal. We want to hark back to burgundy and but to generate a wine that has great complexity but still has a wonderful sense of finesse and elegance to it. We wanted something that ultimately delivers the promise of New Zealand-that primary fruit flavor.

BTN: After deciding on what varietals to concentrate on, how have you gone about building strong brand recognition for your labels? What marketing alleys have you found to be the most successful.

Steve: That's a great question. We've tried a lot of stuff. We certainly steered away from mass media because, as a small family concern, we just don't have the capital necessary for the mass media approach. We had to make a decision about the kind of brand we are and, ultimately, we decided that, for us, the brand is about Family. We are very strong believers that in this industry, globally, it doesn't matter where you stand. This industry was built by families and the wines themselves are basically an evolution or trial and error, generation after generation, to find the right bits of dirt and the right techniques to make great wine. Corporations are a relatively recent phenomenon. We are still strongly rigid in the idea that our brand has to be legitimate and honest about the fact that it's our knowledge and intimate understanding of the dirt we live on that counts. With our brand we focus on our soil, our family and our history in the NZ wine industry. 35 years isn't a lot in the old world, but in New Zealand it's a third of the whole history of our wine making tradition. Most people in New Zealand who have 35 years of knowledge are already dead!

BTN: So, you decided on a strong sense of family and professionalism to concentrate your branding strategies around, but what was the next step? How did you decide on your distributors and what strategies have you found the most successful in building your distributor network?

Steve: The biggest problem was maintaining the network through the recent history of wine distribution and sales, particularly in the U.S., where we've seen massive consolidation. We started 16 years ago and had a very successful business with the Thornbury brand through VIA Pacifica Selections as importers and it all got tipsy across the period of GFC. So, when that all started to fall to pieces, my wife and I decided that there had to be a smarter way of doing this. We knew that Federal Law in the U.S. demands a specific structure and we also knew that we had to somehow flatten that structure in order to be more successful. In order to get closer to our customers, we decided to become our own importers. This specific situation gave U.S. the opportunity to work closer with our distributors. To me, a complex distribution network is a good thing. It's not a one size fits all model. If you have one big chunky distribution model that gets tipsy and falls over - there goes your business. If you control your importation into the U.S. and you have a complex model then when one bit falls off you aren't completely in the dark. You are able to mitigate your risk as your company evolves.

 Award-winning: Steve Bird Wines  

BTN: That's actually a big problem new brand owners often find themselves facing. They get a big contract with a distributor and are happy as can be. Later, for one reason or another, their sales aren't there and the distributor decides the partnership isn't working. The supplier ends up with a back load of stock they can't unload because the big distributor is no longer carrying their product.

Understanding the dynamics of the U.S. market and its regulations is essential to successfully launching a brand that you expect to be exporting to the US. It's a very savvy owner who tries to limit their risk with their own import business.

Steve: I think another one of the things that we did in this new vigil-the rebuild of our brand in the U.S.-is to put somebody, full time, on the ground who understands the brand and its consumers. We put a full-time brand manager in place. I can sit here in New Zealand and open a conversation with BTN, or numerous other distributors, but at the end of the day the deal is going to be closed by a meeting and some face time. Having a brand a manager in the U.S. has helped that a great deal. Before we had solicited the help of BTN we had various states already in play. It requires a lot of relationship building to build a successful network. Strangely enough, I had a magnificent conversation with a guy I hadn't spoken to in ten years last week. He was one of the first distributors I ever did business with. He's working with boutique brands in Colorado now-and he picked up a thread from BTN and shot me a message saying, "Hey, remember me? We had dinner in NZ 16 years ago." It just goes to show that, even though everybody goes and reinvents themselves, suddenly we're finding out we have friends in places we didn't expect to find them. With a brand rep on the ground it makes it that much easier; we don't have to meet up for dinner in New Zealand again, but we can still do business and keep the connection alive.

BTN: You just mentioned that you went back to one of your old contacts. Sometimes it's not as easy as a phone call from out of the blue. Do you have tips for our readers on how maintain those contacts and establish their position within a distributor's portfolio?

Steve: As a manufacturer you go through a series of learning's. If you are a wine brand from the other end of the earth, there's something very therapeutic to load a 20ft container full of wine out the front door of your warehouse-but that's just the beginning of the job. You have to sell it three times. If you are working in the U.S. market you have to sell it to the importer, which strangely enough is me nowadays, but after you get it to them you have to sell it again! When it goes out your front door, the job just started. Be prepared to burn some shoe leather in the marketplace. We learned that the hard way. There is a truism - People buy wine, not corporations. People buy stuff based on the relationship they have with the people that represent the product. We tend to like to deal with people that want to talk to U.S. face to face.

I added it up the other day and in the last 16 years I've spent 16 months inside the U.S. That's about a month a year trucking around the States promoting my brand and making the necessary connections to make it successful, which, I think, is what you have to do.

BTN: Treating your customers like actual friends and forming relationships that you genuinely want to maintain is certainly great advice! That is especially true within the U.S., where you have those three tiers of customers on the business sides-the importer, the distributor and the retailer-and then, ultimately, you need to get it into the hands of the end consumer. Working with wine peps and retail support groups is a great approach to harboring a strong customer base across all tiers of the U.S. market. Thanks for the insight!

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