Shipping cabernet from Peloponnese
(Business 2.0 Magazine) -- Forget about that jet-fuel ouzo. Greek wineries are finally getting props from sommeliers, but they need U.S. reps. to market their product.
Investment level: <$100K
Risk level: Medium
When new wines poured out of Argentina, Australia, Chile, and New Zealand 20 years ago, most weren't fit to strip old paint from your siding. But as winemakers refined their methods, savvy marketers who tasted the improvements quickly signed on to export the brands to global markets - and made a killing. Wines from these four countries now account for nearly a third of the $3.7 billion imported-wine market in the United States.
So where is the new crop of hidden vines that will turn hundreds of prescient exporters into millionaires?
The answer whispered these days among sommeliers is Greece. Long dismissed as a producer of turgid retsina table wine, Greece has a new generation of winemakers, with pedigrees from France and Napa Valley, who are turning out award-winning wines from exotic grapes like moschofilero (akin to a pinot grigio) and agiorgitiko (more like a cab). Exports to the United States jumped by almost a third in 2005, and industry pros say they will double again by 2008.
The heart of the market is Peloponnese, the peninsula making up southern Greece. Its 150-plus boutique wineries produce 2 million cases a year, well over the 500,000 cases industry pros say an appellation needs to sustain an export market. They sell everything from table wines that retail for less than $10 to luxury reds that go for upwards of $40.
"They have the volume, the variety, and the quality," says Rajat Parr, wine director for celebrity chef Michael Mina's six restaurants. "If someone can market them, it'll be huge." One star winemaker, George Skouras, has a Chicago-based representative but says his peers lack representation. "We want to go beyond the ethnic market and get into mainstream restaurants," he says.
The first step to breaking into the business is obvious: Travel through Peloponnese, tasting wines to find ones likely to earn high scores from wine magazines. Then ask to be a winemaker's exclusive U.S. rep.
Set-up costs for exporting one or two labels will run between $25,000 and $100,000. About $10,000 goes toward legal fees to get a U.S. import license. Then, plan on buying a few thousand cases at $5 or so per bottle.
Another $6,000 gets them on a containership. American exporters charge a markup of as much as 50 percent to distributors, who can get up to another 50 percent from stores and restaurants. After paying import duties and warehouse rental, you can raise a glass to double-digit profit margins.To send a letter to the editor about this story, click here.