Friday, December 19, 2014

INTERVIEW Leonardo LoCascio, Winebow

The Sommelier Journal

July 31 2010
Catherine Fallis, MS

A Sicilian native has brought intriguing, family-based Italian wines to America for three decades.
Leonardo LoCascio is as bold in his fashion choices as he is in his beliefs. He recently sat next to me at a Consorzio Brunello di Montalcino tasting in San Francisco, sporting not only a tangerine necktie, but a matching pashmina! Not too many men could pull that off, but for Signore LoCascio, it was as natural as his work scouting out the best wines of his native Italy and other countries. It is always a pleasure to be in the company of someone who so obviously enjoys his work and who brings so much pleasure to others through his finds. It is also refreshing to hear honest opinions, even compliments for the competition, rather than the ubiquitous points-based sales pitch.
Born in Palermo, Sicily, in 1949, LoCascio came to New York in 1969 to attend New York University, earning an international business degree in 1971. Two years later, he received his MBA in finance from the University of Chicago. Following positions as a financial analyst at Rockwell International, management consultant at McKinsey & Company, and vice president at Citibank, LoCascio launched Winebow in 1980. With a large import portfolio of about 130 wineries around the world and national distribution to nearly 70,000 wine shops and restaurants through a network of 200-plus distributors—of which about 10,000 accounts are serviced by the company directly in eight markets where it has its own distribution operations—Winebow’s 2010 sales are forecast at around $240 million. Thanks to LoCascio’s efforts with Winebow, we have more choices than ever before of unique and exciting wines that are not afraid to show their true, bold colors.

How did you decide to leave corporate management and finance and start your own importing company?
I was working at Citibank at the end of 1979 and was just promoted to vice president. I was being successful at a corporate career, but felt that something was missing for me. The world of corporate finance is a little bit rarified in the sense that you are working with products that are mostly conceptual, and I felt that I wanted something that was a bit more physical—something I could smell, taste, see, something that was esthetically appealing to me—and more important than anything else, I was looking to combine a profession with a lifestyle. So I asked myself what other things interested me, and it came down to ceramics, specialty food, and wine. And in the end, it was wine, mostly because I really liked the people who I met in the wine business during my exploratory trips to Italy. I liked the diversity. I liked the fact that they come from all walks of life—some real farmers with big calluses on their hands, as well as successful people who had made money in other walks of life who then turned to wine. I found the whole thing appealing and decided that I wanted to be part of it. I should also tell you that I come from a family of entrepreneurs. My dad had his own company; his father had his own company. They were in the essential-oil business, making lemon oil, orange oil, tangerine oil, just beautiful products from the skins of those citrus fruits, and I watched them build their own companies and the lifestyle that they lived, and I decided that in the end, this was in my blood and I wanted to be an entrepreneur myself.
How have you expanded over the years to represent regions outside Italy?
We stayed exclusively as importers of Italian wines through the mid-2000s, and then as Italian wines matured, and also as the rising euro and declining dollar started to take a toll on the growth of Italian wines, our customers started clamoring for wines that were as interesting, but from different regions. So the obvious place that in many ways resembles Italian wines is Spain. Like Italy, they have lots of different varietals, ancient vineyards, and great viticultural practices, and the wines go really well with food. So we went to Spain, and I started tasting those wines, and we got into Spanish wines in a smaller way than with Italian wines—we represent more than 15 properties from Spain. Then eventually we expanded that concept into other historic wine regions that offer a lot in terms of local and interesting grape varieties: Portugal, Austria, and, most recently, Hungary. We also decided to expand into South America, which proved to be a very wise decision given the popularity that Chile and Argentina have reached on the worldwide wine market. Our addition of artisanal Japanese sake was, similar to our wines, also based on a philosophy of quality, diversity, and local traditions.
Why not operate in every state?
We do operate in every state as an importer, meaning that in every state we have local distributors selling our wines. In eight of those states, Winebow also acts as its own distributor. Why only eight instead of 50? It’s very expensive, and also organizationally challenging, to become a distributor in another state. You need to put together a book of wines to sell, and then you need to hire a sales force. You need to have an office in every state, you need to have logistics—warehousing, trucks; it’s not something that can be done overnight. So we are expanding our footprint, but we tend to do things one at a time. Our latest expansion has been into Illinois. A few months ago, we opened up the doors in Chicago, and we have launched what, in our opinion, is going to be a very successful expansion of Winebow.
Can you comment on the acquisition of Click Wine Group?
Winebow was founded and is based on the East Coast, where there are many restrictions on multiple licenses and where sales in chains and grocery stores are usually not permitted, and as a result, most wine business is done in independent wine shops and restaurants. Our culture and skill set reflect this historical reality. The western and southern states, on the other hand, have completely different legal structures, and in these markets, a lot of wine business is done in chains, clubs, and grocery stores. The Click Wine Group is based in Seattle and has always done a lot of business in channels that have been outside our area of expertise, and their skills have been a welcome addition to the product selection, sales, and educational skills that are so prevalent at Winebow. In addition, we were inspired by the marketing talent with which CWG is infused and with their ability to grow and promote brands in creative and innovative ways. Some of our own brands, like Kris Pinot Grigio, Zardetto Prosecco, and Vitiano, have been enormously successful in the marketplace, as they represent extraordinary consumer value from family-owned wineries. We don’t have the marketing expertise within Winebow, and so it made perfect sense to acquire a company that has been so successful in this field. Finally, from a corporate perspective, the Click Wine Group added management depth and has contributed significantly to our sales growth and profitability objectives.
How do you select your producers? What do you look for in terms of viticulture and winemaking?
This is a great question, and I thank you for asking. First of all, the wines that I choose need to be interesting to me. I don’t like homogenized, standardized food or wine. I don’t like wines that all tend to taste the same. There are some parts of the world that just don’t interest me because the wines have a lot of similarity. I prefer to look for diversity in wines, just like I look for diversity in people. So flavor interest is always one consideration that intrigues me and is the first criterion. Sometimes that means allowing the wine not to be "spic-and-span" in the sense that, for example, if you filter or fine the wine, you are possibly eliminating sediment, but you are also stripping the wine of a lot of its character. So unless there is a reason, I discourage filtration and fining, and I will tolerate sediment because it is harmless. It doesn’t alter the flavor of the wine, which is obvious to consumers as well, and it will preserve the integrity of the wine.
I also want to work with families. It is wonderful to deal with people who used to be children when I started my company 30 years ago and who are now grown-ups and in control of their wineries. Most, if not all, of the wineries we work with have succession plans in place with members of the family. Marilisa and Franco Allegrini are the sixth generation to run this family winery; their children Caterina and Francesco are still in their teens and are already set to become the seventh generation of Allegrinis. It is still pretty much an old-fashioned way of doing business. Those relationships are very close, very personal. If there is ever a problem or an issue, there is always the opportunity to sit down and talk about it and get through it. We trust each other and have been through a lot of different market conditions, economic conditions, and political conditions together. I want to sit across the table from somebody whose name is on the bottle of wine, not the general manager of an insurance company or some other corporate enterprise. Being Italian, speaking Italian, being able to communicate in the same language, allows me a better position from which to have those conversations, compared to someone who goes there with an interpreter and has to go through a three-way conversation and negotiation.
And finally, my wines need to overdeliver. You know, I love it when I go into restaurants or into a wine shop and people are told that I am the importer for the wines, and they say, "Leonardo, I have to tell you, this $20 bottle of wine tastes like a $30 or $40 bottle of wine." When that happens, I feel like I have done my job properly.
How has winemaking changed in Italy since you started Winebow?
It is not even comparable. Italian whites tended to be very thin, low-acid wines with early oxidation. Those wines have improved immensely over these three decades. They’re fermented in stainless vats or barrels, but under temperature-controlled conditions, so they’re fresh, they’re fragrant. The most important thing is that the mentality has changed from producing quantity to producing quality. This means that yields in the vineyards have been reduced dramatically. In red wines, I would say that a lot of the appellations like Barolo, Barbaresco, and Brunello used to have too long periods of maceration, and in the case of Brunello, too long mandatory aging requirements. In those days, by law, you aged Brunello in wood four years before you could sell it. Now, it is only two years in wood; the other two can be in wood or stainless steel or small barrels or cement vats or whatever the winemaker thinks is going to help him to make a better wine. So government regulation got out of the way, and people started expressing themselves and making better wine. The improvement in quality throughout the country—whether you are talking super-Tuscans or Amarones or the wines from the South—has been dramatic, and this is reflected in the incredible popularity of Italian wines.
What are the up-and-coming Italian regions that sommeliers should particularly watch for?
Southern Italy continues to be a treasure trove of interesting wines. Whether they are whites from Campania—including Falanghina, which is one of the darlings of the wine trade right now, Greco di Tufo, or Fiano di Avellino—those are wonderfully aromatic, fresh, supple wines that are really gaining popularity. The mildly aromatic Inzolia of Sicily is along the lines of a toned-down Viognier, and Vermentino is a wonderful grape grown along the coast of Tuscany that is becoming increasingly popular. The most asked-for whites in Italian wine bars these days are Vermentino and Falanghina.
In red grapes, there is such an abundance to choose from, whether it is Montepulciano from Abruzzo, Primitivo from Apulia, Nero d’Avola from Sicily, Cannonau and Carignan from Sardinia, Gaglioppo from Calabria, or Aglianico from Campania and Basilicata, those are incredible wines. The Mount Etna terroir—vineyards planted on black lava rocks on the slopes of the most active volcano in Europe—is ideal for the Nerello Mascalese and the Nerello Cappuccio, which make very interesting, complex wines. Nerello Mascalese can resemble Pinot Noir in the spectrum of flavors. Both the consumers and the trade, including the sommeliers, have been waking up to these wines.
Another area which is very interesting is the Veneto. Global warming may have something to do with this. A lot of the red wines there tended to be underripe, kind of green and weedy, but now we have supple, textured, and layered wines made from Cabernet Sauvignon, Cabernet Franc, and Merlot, and in the same region, you have an explosion of interest from consumers and the trade in the wines made with the ripasso method. We sell several of them, and they all do extremely well. [Ripasso is now a recognized Denominazione di Origine Controllata, or DOC.] Another area that is already very well known is Bolgheri on the Tuscan coast. This is a very warm part of Tuscany, and grapes like Cabernet Sauvignon, especially Cabernet Franc, and also Merlot and Syrah, ripen wonderfully. This is where some of the great Italian wines are coming from: Sassicaia, Ornellaia, Masseto, Guado al Tasso, Paleo, and others.
You mentioned global warming. What effects have climate change had in Italy?
We’re seeing better red wines made in the northern regions. All along the Alpine arc, from Friuli to Piedmont, the weather has been warmer in the last 20 years than it used to be, and the grapes, especially the late-ripening varietals, have a chance to ripen fully and properly in most vintages, so there has been a very big and positive change in the quality of the wines. In the south, in Sicily and Sardinia and so on, you see the search for terroirs that are on hillsides and on mountainsides, where the days may be very warm, but the nights are cooler and, therefore, the grapes ripen fully while retaining their acidity. In some ways, this shift from the plains and valley floors to the hillsides and mountainsides is responsible for the great improvement of southern Italian wines.
How are European or Italian governmental regulations affecting wine production?
First of all, in Italy, you cannot simply buy land and plant it. After you buy the land, you have to buy planting rights, because the amount of land that is allowed to be dedicated to wine production is finite. Therefore, somebody else needs to take their vineyards out of production, either to plant other crops or to develop it for housing or factories or whatever, and then you can buy his planting rights. The second regulation is that most of the appellations in Italy are closed, in the sense that even if you manage to buy land, let’s say, in Montalcino, you’re not going to make Brunello from that land, because the amount of land designated for Brunello production is closed. So you may have your vineyards in Montalcino, but you have to wait until they open up the appellation again, and then all the owners get a proportional share by which they can increase their Brunello production. Other regulations are that most DOC wines cannot have a screwcap closure. That is a real problem for white wines, which have become very popular with Stelvin instead of the traditional cork closure. A lot of producers are petitioning the appellation regulators to open that up and allow them not to use cork, given all the problems that we have with bacterial contamination.
I also think that some of the regulations continue to be controversial for DOC wines. A good example is when you have strict regulations that dictate the minimum and the maximum of each grape variety that you can use in a given appellation. Amarone is one that comes to mind, with a minimum requirement for Corvina of 40% and a maximum of 70%. If a producer feels he can make the best Amarone using 100% Corvina, he should be able to do that. So maybe minimum requirements are OK, but maximums are definitely nonsense, in my opinion. My general feeling is that we have way too much government intrusion in the wine business. I think the consumer needs to be protected, but at the same time, the winemaker needs to be able to express his full ability and creativity. In Bordeaux, they tell you the grapes to use, but nobody would dream to tell you that you have to use a minimum of 50% Cabernet Sauvignon or 60% Merlot or 30% Cabernet Franc. Within the approved grapes, everybody is doing the best job they possibly can, and I think that is the way it should be in Italy.
How is the global economy affecting Italian producers today?
There are two answers to that. In the mid-tier, wines that retail for under $20 are the sweet spot, and as a lot of consumers have traded down, these wines are doing great. We had a record year for reds under $20. I would also say expensive Italian wines—Barolo, Barbaresco, Brunello, super-Tuscans, Chianti Classico Riserva—they’re struggling, though in the past couple of months, there has been a little bit of a comeback. 2009 was a very difficult year for the top-end Italian wines.
What other challenges face Italian winemakers in the marketplace?
Increasingly, Italian wines compete on the worldwide stage with wines from many different countries, some of which have undisputable competitive advantages. Land and labor costs in South America and the New World in general are considerably lower than what they are in "old Europe." Italian winemakers know that their competitive advantage lies in the incredible diversity of indigenous grape varietals and wine styles. They know that they have to craft wines of distinction and flavor interest that will compete in the key markets around the world, despite the lack of favorable cost conditions.
How do you see the outlook for the global wine industry?
We have declining per capita consumption and, in some cases, declining populations in Europe, but there is increased interest in the emerging markets—China, Russia, Korea, all those places are becoming big consumers of wine and competing with importers from the United States. In our country, we have both rising population and rising per capita consumption, so I think the fundamentals are great for improving wine sales. Wine drunk in moderation is a great accompaniment to food; a lot of people are beginning to understand that. Increasingly, wine is becoming the alcoholic beverage of choice for a lot of people, not just in the United States, but around the world.
Can you identify a profile of a consumer or diner who is most likely to buy your wines?
It is probably an educated, well-traveled consumer, somebody who has a little love affair with Italy, who has experienced the Italian lifestyle, and when they come back, they want to continue that lifestyle in their home or when they dine out. They tend to know at least the very basics about Italian wine in terms of grape varietals and their regions. They follow the wine press in the sense of understanding what is up and coming. They’re discovering Aglianico as the journalists have discovered Aglianico, for example, or Vermentino. They’re interested in food, because Italian wines are not blockbusters, neither reds nor whites—these are wines that go with food, so they have to have an appreciation for how food and wine match together. They are experimental; they are curious. They don’t want to be boxed in by just a few grape varieties—Chardonnay, Cabernet, Pinot Noir, Merlot, Sauvignon Blanc. They want to experiment past that, and Italy has the largest number of grape varieties in the world, and that in itself is very appealing to those kinds of consumers.
How have restaurant wine-drinking habits changed since you started Winebow?
When I started the company 30 years ago, you could find Chianti and Valpolicella and Soave, and that was about it. The explosion in food interest, in food culture, the improvement in what is offered by restaurants around the country has been matched by the same thing in wine. It is so beautiful to go to a restaurant today and look at the wine list and find wines from Greece, Lebanon, New Zealand, and, of course, from Italy and all the other great wine regions of the world. But it is not just the basics like Tuscany and Piedmont that are represented. One of the top restaurants in New York called today, and they’re going to pour Tocai by the glass for the next three months. As the wine trade got more experienced and more sophisticated, they lost a little bit of the shyness, of the need to conform. They are all out there trying to outdo one another in terms of what they can propose to the customers, and people love that. And then there is the explosion of wine bars, where you can have in a very civilized setting the opportunity to learn, to experiment, to drink different wines, without spending a fortune. You just have a glass, you decide if you like it or not, and if you do, you buy a bottle. A great example of the wine bar of the future is Clo in New York, in the Time Warner Center on Columbus Circle. It combines education, technology, and a great wine selection.
What advice do you have for sommeliers in terms of pairing food with your wines?
My wines are about nuance, purity of flavors, authenticity, the people who make them. They are stories that need to be told. Not that the sommelier needs to spend 15 minutes describing a bottle of my wine, but he certainly needs to have an appreciation for what is interesting and, in some cases, off the beaten track. We import two wonderful red wines from the backwaters of Campania: one is called Montevetrano, in the mountains behind the Amalfi coast, and the other is called Terra di Lavoro, in an area that is really not known for making great wines. When they’re exposed to these wines, consumers love them, and they thank the sommelier for providing this really incredible wine experience. And those are wines that are full of flavor, full of interest—they’re outside the box, if you will. Of course, we have plenty of wines that are very good following traditional patterns, whether they are Pinot Bianco or Sauvignon or Malvasia or what have you, but I think sommeliers working with my wines need to realize that they are going to be proposing a wine that is not going to be overwhelming the food, is not going to make people say, "Wow, this is a mouthful. I can hardly eat after drinking this." They’re going to say, "Wow, this really complements the food well, and I’m really happy that you suggested this match."
What do you do when you’re not scouting or selling wine?
Well, that doesn’t leave me much time, but I am an avid traveler. I have been pretty much all over the world. Some of my recent trips include Easter Island and, last year, Madagascar, the island of Mauritius, and Patagonia, both on the Chilean and Argentinean sides. I like to hike; I like to do physical activities like whitewater rafting. One of my projects for the next couple of years is climbing Mount Kilimanjaro in Africa. I’m also an avid reader—everything from The New York Times Book Review to novels, especially historical novels. I like to read about both Italian and American politics, and these days, there is no shortage of reading along either one of those lines.
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