Jessica Kogan is the chief marketing officer and the chief digital officer for Vintage Wine Estates. Joel Whitaker, editor of Kane’s Beverage News Daily and host of the Beverage Barons podcast series, interviewed her about Vintage Wine Estates and its Shareholder Passport program. Along the way, we also learn about her career path to the dual-chief title and her personal favorites in wine.
Here’s a transcript of the interview which has been lightly edited for clarity.
Joel: So, for anybody who doesn’t know, tell us about Vintage Wine Estates.
Jessica Kogan: So, Vintage Wine Estates is a brainchild of Patrick Roney, who is the CEO of the company and the head of the board. He started the company about 20 years ago, with an acquisition of Girard, Girard Winery. He came from Dean & DeLuca where he was the president and built a relationship with Leslie Rod, who was the owner. Then in purchasing Gerard, he partnered with Leslie Rod.
And basically, he then went on kind of buying a buying splurge, buying valuable wineries’ assets to build up a portfolio of Vintage Wine Estates and the idea was that the platform and structure that he had created within the organization, was strong enough to bring in these organizations find efficiency with them yet maintain their unique brand character.
And today, we are a total of 14 unique Estates and Winery brands, about 30 unique lifestyle brands. The business is quite interesting in terms of its structure. Different than a Duckhorn, which is also public, which is kind of focused on one engine, one individual piece of their business, very wholesale focused.
VWE is one-third, one-third, one-third. A third of our business is actually direct-to-consumer, which is a fast-growing part of our business. A third is production-related. And a third is wholesale related, so it’s a really well diversified business and going public made total sense in terms of what the company wants to do. Both in organic growth and in future acquisitions.
Joel: Well, I’m tempted ask you about future acquisitions but if you know, you’ll probably say, I can’t talk.
Jessica Kogan: I never know until I’m told.
Joel: That’s the best way to keep a secret. Vintage recently announced something that I thought was sort of cool. The Vintage Shareholder Passport program is for people who have stock in the company.
As an introduction to talking about that, I recall many years ago, it was a standard feature on the front page of the Wall Street Journal, every two or three years to have a little story — usually, in A-hed –you know, those cute little quirky stories — about a company that was giving out rewards to their shareholders . . . coupons from Procter & Gamble bound into the annual report, for example, or discounts on t-shirts from somebody or something.
But your program is somewhat different. You’re not offering coupons bound into the annual report. Of course, annual reports are mostly now digital anyway. But you’re offering something else. So, tell us about your program, tell us how it came to be, what benefits you expect to get, etc.?
Jessica Kogan: Well, the idea was if you look at the landscape of investors in wine-related stocks, adult beverage stocks, the idea that whether you’re an institutional investor or retail investor, you probably have an interest in wine at some level and in consuming wine. And so our theory was if we build a really cool program that rewards shareholders for their participation, perhaps these shareholders will then beyond owning shares in the company will also buy our wines and we will give them special benefits for being a shareholder.
So talking to Pat, he’s like, you know, I think it would be really cool for us to set something up like this. And I said, you know what, what’s really great is? We can set this up digitally. ‘Cuz I’m a digital person. We can build a site in which, we can support shareholders to participate and register for this program and then give them back the perks of owning shares within Vintage Wine Estates.
And so that’s that was really, the genesis of the program. And we created basically two very simple tiers because not everybody is going to want to buy, you know, a whole bunch of shares to participate. So, we created two tiers. The first is the gold tier. To participate in the Gold tier, you need to own 500 shares of Vintage Wine Estates stock. To participate in the Platinum, you need to own 1,000 shares of Vintage Wine Estates stock.
And the premise again, is that if you own these shares which are verified through our encrypted systems, if you are able to become a member, you then benefit by receiving a discount that is on a par with participating in a wine club.
If you wanted to participate in a wine club, you could enter that way without owning shares, but if you do own shares, you can participate in that everyday wine club discount, which is usually about 25% for the highest level wine club member, which we tier as well based on their relationship with Vintage Wines Estates and in our shareholder program for gold, it’s 15%; for platinum, it’s 25%. In addition, you get invited to semiannual events for both gold and platinum. We take you through a flight of wines from our states led by our incredible winemakers. You can participate in person or you can join us by Zoom if that’s if that works for you, because our shareholders come from all over the country.
And then every year, kind of similar to Berkshire Hathaway, we have one annual event. We invite all of our shareholders to come and spend the day with us at one of our estates and really learn more about what we do and how we do it. And that includes Pat (Roney) speaking, our incredible president Terry Wheatley speaking, and also all of the folks who helped bring to life all of our amazing wines. So from our top winemakers to those who work in production to even our brand ambassadors.
So it’s just a really fun way to get involved with your investment and if you enjoy wine, it’s even better. So that’s really the genesis of the Passport program. And it’s just rockin’, People love it. Our shareholders are loving it.
Joel: So, let’s see what is the share price of Vintage Eine Estates right now?
Jessica Kogan: So the market was down last week but typically it’s it around $10.20, $10.30.
Joel: So let’s see. Five hundred times $10 is $5,000 to take part in the program, right? So, it’s not for the mom-and-pop guy who wants to buy two shares and get the shareholder benefits. While you could do that years ago with Marriott’s program, when they had discounts for shareholders, you could get in for literally, as little, as I think two shares. Marriott has since changed that.
Jessica Kogan: But we feel that this is a good number because we’re really looking at people who I think at the 500-share level it’s the retail buyer, right? It’s somebody who like you and I who are really into wine. Who invests in the stock market, you know, little bits and pieces, it’s a relief. It’s really cool way to get involved with a whole bunch of awesome benefits that you don’t get from any other wine company.
At the, at the 1,000 level. I think we’re really talking about institutional investors who are looking to invest in adult, beverage companies that have good Holdings and this is just another way to. I guess, find the return of that benefit, to find the return. Of that ownership.
And at the end of the day our hope is that all our investors come away from this program being our greatest advocates and going out there and telling everybody, “Hey you got to buy some stock in this company enjoying this program because I’m tasting, some amazing wines and I met some great wine makers and also whenever I’m in Napa and Sonoma, they do my itinerary for me. That’s the other piece. I forgot to mention for Platinum shareholders. We will set up a VIP itinerary for them. Twice a year to come visit all of our tasting rooms. That’s pretty cool, right?
Joel: Yeah. So I have to say I think you’re a pretty good marketer,
Jessica Kogan: I mean you got to make it worth your time. Listen, we all have very little time these days, at least for me and the people I work with, we’re always time crunched. How about not worrying when you go to Napa? It’s knowing that you’re going to get a great reservation and be treated super, super well. And that really is a great benefit of this program. I mean, you just don’t have to worry about it at all. And there are seven different estates in Napa and Sonoma owned by Vintage, that are all fabulous that you could spend two to three days just visiting and tasting.
Joel: So, no t-shirts is part of the package?
Jessica Kogan: Not yet, no t-shirts. But we do have a website for our VWE shareholders, and it’s just vwepassport.com and that is where our shareholders can log in, and they can see their entire profile. They can see the wines that they have purchased, they can book reservations at any of our tasting rooms, and they’re also provided really, very, very highly customized opportunities because of their ownership of stock in the company that are not given to other customers.
Joel: Well, that’s very clever. Now I have to ask you this question. If a lot of people own 500 shares, your gold level they want to perhaps own their shares through a broker like Charles Schwab or Muriel Siebert or Merrill Lynch. Somebody like that. Are they able to take part in this?
Jessica Kogan: Yes, absolutely. If you go to the VWE corporate website, which is just VintageWineEstates.com, you will select Investors. And there’s a drop-down that says passport.
If you are interested in participating in the program, you first need to register with us. Then in another email, we ask you to provide proof of your ownership of the shares and it can come from any retail company where you hold your shares. we ask you to upload a copy of your ownership into an encrypted system. It’s a server that we do not own and we verify the ownership and then that documentation is destroyed. We then asked you to update us every quarter with your ownership of our stock.
Joel: That’s very clever. So I’m thinking off the top of my head that if somebody wanted to get your 500 share minimum but didn’t want to put out $5000 in cash. They could probably do it in a margin account for $2500 and borrow the other $2500 from their broker. So that’s not as steep an entry process as it might sound.
Jessica Kogan: I like how you think
Joel: Or if they want to buy 500 more shares for an additional $5000 they could get to your other level.
Jessica Kogan: Or they can wait. They can play the market and wait for the market to go up and down and you know kind of go from that perspective. All I’ll say is that we really believe very strongly that we want investors who are who really enjoy this industry and enjoy the business. And enjoy the products of this business. That’s why we came up with this program,
Agriculture can be a funky thing to some people. Sometimes Mother Nature is loving sometimes. Mother Nature is not so loving but ultimately you know we are in the business of adult beverage and wine and there’s a pleasure in that and so we really wanted to introduce that pleasure to our shareholders so that they look at us more as a long-term play versus a short-term play.
Joel: Well yes it by the two shipments in a year I think you probably ensure that’s at least some of them will definitely be a long-term play. So, so, that’s a good thing, you know. I think it’s very, very clever.
Jessica Kogan: I wanted to mention, I think is really important and I think you and I feel this naturally because we’re inside the industry, is community. And, you know, the shareholder passport program really is around creating Community with these shareholders as well.
So kind of how Berkshire Hathaway has all these people come to their event, all these folks who own shares in Vintage Wine Estates are wine drinkers and enjoy wine. And that is a community unto itself and so it really is an invitation to participate at that level.
Joel: Well it’s very clever and very smart. I think it’s a terrific marketing tool and I suspect it’s a terrific shareholder retention tool. Also now let’s say at as far as you know, Vintage is the only people doing this that I know of right now.
Joel: Now, tell us a little bit about yourself since I gather, you’re the person that came up with the idea.
Jessica Kogan: I did.
Joel: So how did you get into marketing? Where’d you go to school, Life story?
Jessica Kogan: Sure. Let me try and wrap it up in 30 second. I actually am from Washington DC, as we were just talking before where you’re located in Maryland. I went to NYU (New York University), where I worked in the fashion industry for quite a few years and helped launch Donna Karen and I loved it. I then worked a lot with cosmetic and fashion brands, reinvigorating their images. Elizabeth Arden was one of my big brands reinvigorated. Dr. Scholl’s. And then eventually launched a cosmetics line, Urban Decay, which was then acquired by LVMH.
I then decided to go into the digital world. I am one of those way back way back people from 1998, where I worked at a company called Razorfish and I helped design and build some websites that are still in existence today, including the first iteration of Schwab.com, and for the Southern Poverty Law Center, tolerance.org.
I was also building all the stationary sites for Prada, Gucci, Giorgio Armani. They came from a fashion background. I then moved to San Francisco with Razorfish. And at the time, my partner was looking at the wine industry and was very interested in starting his own company.
And I said, well, tell me a little bit, a little bit about the company. I don’t know anything about wine. Just tell me about it. And he said he basically kind of spoke to me and said I want to get Cabernet and I want to sell it for $15 a bottle and not buy it for, you know, $60, $70 dollars a bottle at the store.
I’m like, that’s genius. I totally want to participate in that and he was like, well, you don’t know how to sell and wholesale and I said, but I know how to build websites and that’s basically was the genesis of Cameron Hughes, which many people consider the Warby Parker of wine. You know it’s a destination where you get amazing wines at an amazing price from appellations that you know.
Cameron Hughes was eventually purchased by Vintage Wine Estates. When we were purchased by VWE, I was thinking about going off on my own and doing some other stuff, but Terry Wheatley (VWE’s president) was just so convincing and so, so awesome.
She’s like, “just stay on, just try it,” and I did, and I’ve never looked back. She’s one of the most amazing dynamic leaders I’ve ever worked with. Pat has just incredible instincts and I feel very lucky to be part of this organization and for them to value what it is that I do in the industry which is direct-to-consumer. That’s always been my specialty. As the industry evolves and comes to terms with the fact that digital is going to be a big part of their lives, whether they like it or not. It has been nothing but a benefit for our for our business.
Joel: Well, great. So that’s a great life story and it explains how you got to where you are and also explains your dual titles. Which you know, I have to say I was wondering about that for a while because everybody, I know whose digital person is pretty nerdy and you don’t seem nerdy but more marketing. So, you combined the two. That’s excellent.
Well, Jessica, is there anything you wish we would have asked you that we didn’t ask.
Jessica Kogan: Let’s see. You didn’t ask me what kind of wine I like.
Joel: Okay. What kind of wine do you like?
Jessica Kogan: First you need to tell me what you like.
Joel: Well, I drink really cheap stuff. Let me tell you that. I have two or three standbys. One is the Franzia Merlot out of the box.
Jessica Kogan: No. 1 selling product for Wine Group. No. 1 selling product.
Joel: Yep. I actually think it’s reasonably decent. But then I have to tell you, I also have no taste buds and a terrible sense of smell so, you know, it could be terrible and I wouldn’t know it or could be great and I wouldn’t know it.
The second thing that I like is Foxhorn Chardonnay, which is an Australian product. I think it’s shipped in bulk over here, and then bottled out in Ripon, Calif., or someplace like that. We do like Beringer Bros. Barrel-Aged Cabernet Sauvignon. The other thing that we tend to do here at here in our house is Coppola.
Jessica Kogan: Yes. He (Francis Ford Coppola) does some pretty good stuff.
Joel: The coolest thing is because my daughter is an aspiring actress and she had some Coppola Claret down at Walt Disney World when we were down there on a family trip at this really expensive steak house in the Yacht Club there and she liked it. And so, we have to have that every other week or else he gets dramatic on us. We also appreciate Korbel California Champagne.
Jessica Kogan: I love it. So, you should definitely get the Editors Cut from Coppola. And you must visit their Winery. The Tasting Room is insane! They have these little gazebos and a pool and it’s just actually super, super cool. I like them a lot. I used to do a lot of work with them and Corey and I’m a big fan of Coppola.
Have you ever noticed that when you go to the store to buy the Franzia box wines that they are always way back?
Joel: Yes.
Jessica Kogan: Have you ever wondered why?
Joel: I can bet? Why? Because you have to walk by your products to get to it.
Jessica Kogan: That’s correct. That’s correct. So that that’s like a total inside. I didn’t even know that until a couple years ago. I just like, why is it all the way back there? I wanted to like the best-selling product because as you walk down the aisle, they’re trying to convince you to buy some other products down the aisle.
So, my favorite wines, are I love New Zealand, sauvignon blanc. It’s one of my favs. I’m not usually a white wine drinker. But in general, if I do drink white wine, it’s really literally any New Zealand. In fact, Layer Cake makes an awesome New Zealand, sauvignon blanc that I’ve been enjoying lately and it’s just delicious.
I am typically a big Barolo drinker; I love Italian wines and Cameron Hughes Wine does amazing Italian wines. If you go to their website, they always have something going on the import side for Italy.
And then, of course, you know, I do like big, hefty, yummy chewy cabs. And I like any of our wines that we make. Within our estates I think we have two incredible wine makers, that make some amazing, amazing cabs. In fact, one of the acquisitions that we just made is of candy and there’s some beautiful Sonoma cabs that their winemaker is making right now, that encourage everyone to try.
Joel: Well, that’s great. So now we know each other’s wine menu. You know, you’re more upscale that I am,
Jessica Kogan: I am very focused when I buy my wines. It doesn’t cost a lot to make wine. It costs a lot to sell wine, so knowing what you like, and finding that product or that brand that is selling it just right is the key to everything, and I tried to through my marketing help customers realize their taste buds with a price that is going to meet them at their pocketbook.
Joel: So I suppose, I now have to ask you, since you opened the door, how successful are you? How are VWE’s sales doing?
Jessica Kogan: Well, we are closing (the books on) FY2021. And because we are a public company, I am not allowed to speak at all about numbers anymore. But I can tell you that for the Direct-to-Consumer side of the business –. This is a well-known fact for everybody within the industry – as a result of Covid, if you didn’t pivot into your direct sales, you were certainly challenged.
So we are going to see higher than normal revenue around direct-to-consumer simply because of the pandemic. So, we were able to meet that demand. It will be interesting to see what happens with the new Delta variant.
It’s like we have no idea what’s really going to happen, but I can tell you this, our tasting rooms are fuller than they’ve ever been, and you can tell folks very much want to be out and that makes me really happy.
Joel: So now the question related to your tasting rooms. Do you have any idea what percentage of your visitors are vaccinated? And No.2, are people wearing masks routinely around there? Or they basically going out like they’re down in Arkansas,
Jessica Kogan: Great questions actually. So, from the vaccination standpoint, we are not checking vaccination cards, but in California, they just reinstituted the mask mandate. And so you now need to wear a mask when you are in The Tasting Room. Our employees have been wearing masks throughout. The protocols did not change for them. But now for customers, when they do come to The Tasting Room, they are asked to wear masks.
Joel: And if I showed up and said, oh, I forgot my mask, or I lost it in the hotel or something.? Do you have —
Jessica Kogan: We got tons of extras!
Joel: Well, that wasn’t a question. You have those, but are they logoed with one of your wine brands, or something like that?
Jessica Kogan: Of course, when you’re sitting outside of the tasting room and enjoying some of our wines, you do not need to wear a mask, but when you are inside, you do need to wear masks now and that just changed this past Friday.
Joel: I presume outside you’re sort of socially distanced, and the wind is blowing and all that.
Jessica Kogan: Yes. Yes, we’re very lucky. We have really, really large, beautiful properties. So there’s a lot of space to sit outside. I think people still want to get out. They don’t want to stay in their homes, they just want to be free and it’s very understandable and we get little pushback from customers around wearing masks. I’ve seen some horror stories for restaurants and obviously the airlines, but we’ve been quite lucky in that we’ve had just amazing guests and customers who come in and they’re just super supportive.
And I kind of feel like when you go to a tasting room, it’s like it’s like you’re going for ice cream. You know how, when you walk into an ice cream store, like you’re just happy, you’re getting ice cream. And I think that’s really the attitude for many of our customers when they come to our tasting rooms. They’re just so happy to be out and to be doing something that they really enjoy.
Joel: Yeah, I bet you’re right about that. It’s been great talking to you. I hope I wish you lots of luck. I hope your Shareholder Passport program goes on for years and years and years because it sounds like a really good thing and a way frankly to build loyalty. Yes.
Jessica Kogan: Absolutely. Absolutely. We’ve done very little marketing. In fact. I think you’re one of the first to have actually covered it and it’s like going gangbusters so we can tell that the program is very desired.
