The Wine Industry Today (and Beyond) With Steve Fredricks of Turrentine Brokerage


by Drew Hendricks
Last updated Dec 29, 2022

Legends Behind the Craft Podcast

Last Updated on December 29, 2022 by rise25

Steve Fredricks
The Wine Industry Today (and Beyond) With Steve Fredricks of Turrentine Brokerage 11

Steve Fredricks is the President of Turrentine Brokerage, a company dedicated to helping California wine businesses by supplying accurate information about supply trends, providing win-win negotiations, and assisting many of the state’s leading grape growers in marketing.

Steve began working as a wholesale wine dealer for Turrentine Brokerage in 1991. Over the years, he has distinguished himself as an expert in bulk wine and grape sales, market cycles, and long-term partnerships. Now, he’s in charge of all Turrentine Brokerage activities, as well as Turrentine’s foreign partnerships and strategic partnerships in France, Italy, Spain, Australia, Chile, and Argentina.

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Here’s a glimpse of what you’ll learn: 

  • Steve Fredricks shares how he began his career
  • How the wine industry has changed over the years
  • Steve talks about the changes in the industry since the pandemic
  • What supply chain issues are wineries facing today? 
  • Steve shares how he keeps himself motivated in the business

In this episode with Steve Fredricks

How has the wine industry changed over the years? What issues do wineries face today, and what steps can be taken to overcome them?

Many wineries have become more professional and achieved substantial growth over time. Automation and technology make transactions and business operations more efficient, and they also played a pivotal role in mitigating the pandemic’s effects. Steve Fredricks shares his observation of the industry and the future he sees in the winemaking process.

In today’s episode of the Legends Behind the Craft podcast, Drew Thomas Hendricks and Bianca Harmon sit down with Steve Fredricks, President of Turrentine Brokerage, as they talk about the evolution of the wine industry. Steve also shares his thoughts on the supply chain issues wineries face and what he hopes to see in the industry in the coming years.

Resources Mentioned in this episode

Sponsor for this episode…

This episode is brought to you by Barrels Ahead.

Barrels Ahead is a wine and craft marketing agency that propels organic growth by using a powerful combination of content development, Search Engine Optimization, and paid search.

At Barrels Ahead, we know that your business is unique. That’s why we work with you to create a one-of-a-kind marketing strategy that highlights your authenticity, tells your story, and makes your business stand out from your competitors.

Our team at Barrels Ahead helps you leverage your knowledge so you can enjoy the results and revenue your business deserves.

So, what are you waiting for? Unlock your results today!

To learn more, visit barrelsahead.com or email us at hello@barrelsahead.com to schedule a strategy call.

Episode Transcript

Intro  0:03  

Welcome to the Legends Behind the Craft podcast where we feature top leaders in the wine and craft beverage industry with your host Drew Hendricks. Now let’s get started with the show

Drew Thomas Hendricks 0:19

Drew Thomas Hendricks here I’m the host of the Legends Behind the Craft podcast where I talk with leaders in the wine and craft beverage industry. Today on this show, we’re shifting back to the supply side of the industry with Turrentine Wine Brokerage. But before I formally introduce our guest gotta give a sponsored message. Today’s episode is sponsored by Barrels Ahead. At Barrels Ahead, we work with you to implement a one of a kind marketing strategy, and the highlight your authenticity, tells your story and connects you with your ideal customers. In short, we help wineries and craft beverage producers unlock their story to unleash the revenue. Go to barrelsahead.com today to learn more. Now before I introduce our guest, I got to introduce Bianca Bianca Harmon our DTC strategist is joining us again today. How’s it going, Bianca?

Bianca Harmon 1:06

It’s going great. Jerry are really looking forward to this conversation we have today.

Drew Thomas Hendricks 1:10

Yes, yes. I’m super excited today. We have Steve Fredricks on the show. Steve is the president of Turrentine Brokerage. Welcome to the show, Steve.

Steve Fredricks 1:18

Thank you. It’s great to be here.

Drew Thomas Hendricks 1:20

Thank you so much for joining us. So Steve, before we get into all the great stuff you’re doing and talk about supply side of the wine industry. How did you get started in this profession?

Steve Fredricks 1:28

Well, I was going to UC Davis, thinking I was going to become an engineer and realized after a couple of quarters calculus was not for me. And I struggled to find what else to do. I was enjoying, you know, other parts of sciences business. And I knew the wine business was there in that and I took me a few years to figure out I could create my own major and I combined fermentation science. I did a little bit of brewing studies along with the enology studies and combine that with agricultural economics to my own major. It was much more geared towards science but also the business of wine. And at that time, there were a lot of young winemakers three deep at most wineries and I realized production wasn’t for me and so I combined that together Did you did you grow up in a wine family or a I did not I grew up in Southern California they were wine enjoy you’re speaking Italian of mainly of Italian descent although my name doesn’t state it in so we just wine was part of the meals and part of family get togethers that was really it for me for for my wine background before going to Davis.

Drew Thomas Hendricks 2:41

It was a dipping at Davis that really got you into the wine when it’s true.

Steve Fredricks 2:45

Pretty much yeah, that opportunity of going to school there. opened the door for me to it

Drew Thomas Hendricks 2:51

has for it has for many. So from there, nothing ahead. So give us a give us a rundown a turn, Turrentine.

Steve Fredricks 2:58

You know Turrentine was started in 1973 by Dan Turrentine and then continued on his son started him in like 1977. Dan had a long history in the wine business. Starting in the 40s. After he got out of the service, he was in over two. And he started with the Wine Institute early on in the days in San Francisco and work there then estate marketing over to The California Wine advisory board for a number of years. And then he retired and realized he missed his friends. And so he started just sort of using his contacts to a context of the whole wine business due to sort of start brokering and doing deals and then Bill made it his his primary focus in working with him about four years later and created the business. I then started in 1991. And we’ve grown it since then Bill retired a number of years ago and then I stepped in as president so we’re a group of shareholders that are the that are the brokers that run the business.

Drew Thomas Hendricks 4:04

And you connect growers with why

Steve Fredricks 4:06

Yeah, we connect we connect growers with wineries to help them market their grapes we connect winery to winery transactions for wine in bulk. We work with brokers such as ourselves in in the wine major wine producing countries around the world to create global deals if people need wine from around the world help people find producer for maybe a private label strategic brand and just advice over the long term trend so most a lot of our customers we’ve had for a long period of time you know continue to work with them whether that’s buying selling grapes, wine, whatever it is we’ve got a long relationship and and varied relationship with with almost everybody in the California wine distance in some way shape or form.

Bianca Harmon 4:51

Juice correct it’s not bottles, it’s all no

Steve Fredricks 4:54

we work with bottle products. We can help people find bottle product at time. It’s a very smaller part of our business whether that To someone bottling a product specifically for a customer or a strategic brand, say they want their own, you know, Suave from, you know, the Veneto region. We know that producers who can do that, or they need wine in bulk from Chile or Australia or Argentina.

Drew Thomas Hendricks 5:19

Now, do you work with all the logistics of getting that wine in country?

Steve Fredricks 5:22

No, most of that business is done by the customers themselves, our jobs to put buyer and seller together, okay, you negotiate and negotiate the details. You know, we’re not experts in transportation, and everybody’s got their own their own challenges and their own quirks with regards to that. It’s much better for them to have control of that aspect of it.

Drew Thomas Hendricks 5:42

Yeah, I think that’s why I said that is a slippery slope. There’s one thing connecting people and being a dealmaker is actually getting the grips over here.

Steve Fredricks 5:50

Yeah, again, over getting, you know, getting everything delivered. There’s so much more communication and effort necessary for all those kinds of things that having it adding somebody else in the middle of it does not make the process better.

Drew Thomas Hendricks 6:04

Sure. Sure. No, that’s important. Now, going back to 91, when you started and up to today, we’re looking at a good 30 mess. Horrible, good, good, good. 31 years. Yeah, I was the being a broker and connecting wineries granted, the size, the volume is increased. But how is the business evolved over the years? You

Steve Fredricks 6:25

know, everything used to be done by phone and fax. You know, it’s done by text and email. And so you talk to people more, you knew where, when I first started, I think we had one cell phone that was portable, that we go in the car, someone was going somewhere, but you you kind of remembered where the you knew where the the phone booths were, where they were in a in an air conditioned building, maybe a hotel lobby or where you could start to make a few phone calls. I only had to do a little bit about that. But Bill knew all those. I think you could have lunch more frequently with people spend, they were less busy, I’ll say that they felt less busy, because they would take time to go to lunches, there was a lot more of that. Now, people are too busy from their cell phone, and just everything that’s going on to really take that time. But everybody still appreciates the opportunity to spend a little bit extra time over lunch and, and to talk face to face. Those things are still just as important as always,

Drew Thomas Hendricks 7:29

it’s kind of funny that I started in the wine industry right in about 1993 at a wine store. And it faxing was the it was the thing that we people would fax in their orders. And now lately, we had email yet phone, but I think texting has become the new faxing.

Steve Fredricks 7:46

Yeah, yeah. Exactly. Yeah. If you have the expectations for the speed of an answer are also different. You know, they didn’t expect to have an answer in in seconds or minutes, you could take, you know, because you had to call someone leave a message. People are on road, you know, so their expectations of the speed of service were different. And sometimes you can’t match it anymore. Maybe there needs to be a little bit a little bit of a delay for things.

Drew Thomas Hendricks 8:17

Yes. Anyway, yeah, that could increase a little bit more friction on the amount of time, the distance at times takes me to respond to something that we’ve been talking about wine

Steve Fredricks 8:27

business has become more professional to and grown. There’s a lot of different aspects of how it works. A lot more layers at wineries in terms of corporate and so sometimes decisions take a little bit longer than they used to just because there’s too many other people who have to decide,

Drew Thomas Hendricks 8:43

Oh, for sure, with all the consolidation that’s taking place. For sure. Talking about so one of the things that really is I was preparing for this interview that really kind of piqued my interest is your wine business wheel of fortune in the in the the supply side cycle. I think everyone could learn a lot from that.

Steve Fredricks 9:02

But some it’s it’s an aspect that that has set us apart from some of our competitors Bill sort of described this cycles that we go through a number of years ago, I can’t remember when we first published it now, but we’ve revised it and sort of updated the design of it over the years. And it becomes true all the time. Everyone keeps saying Oh, globalization, all these things are going to create cycles. All they’ve done is change them up a little bit. But the fact is, wine is agriculture. And, and it’s agriculture dominated by a commodity grapes. It takes a long time for a vineyard to be established. You know you to harvest fruit off of it to make wine and get it out to the consumer. So not long delay means that our response to maybe changing consumer demand, the growth of a different variety takes a long time to really happen. If it’s the cific to a region and a variety. And it promotes then, you know, a market cycle in which over planting occurs, and the structural supply exceeds demand, but we don’t know it for a while because acres go in then acres, the market cycle, the market indicators of price are there for more acres to go in. And by the time that the the commodity comes off, the grapes come up, you know, maybe we planted too much. So we’d go to the cycle of oversupply till either maybe some older vineyards and unnecessary get removed or sales growth in that catches up with the supply and then we may go through it again. And there are different ways in which maybe supply can be found to satisfy consumer demand today that may shorten some cycles may not make them as, as strong, you could look at some of the last two Pinot Noir people who looked around the world for, you know, maybe value Pinot Noir from came in from Italy and France and Chile, you know, all over Germany. And, but it really didn’t substitute for the quality and style people were looking for from California and really only at the value end. So they were able to come within a year and a half or two years of that real need to find that wine and start bringing in having wines made in different style from those regions. And then Muscat was the same thing. The growth of Moscato it’s not that there wasn’t Moscato already planted all all around the world just in use for different sources, even Moscato available in California, but it was made in a different style had had already had at home until it was it could come out. So we’re able to oversupply Moscato pretty quickly. And we did plant some vineyards, but not not that many that made it really difficult. And they were planted more in the, in the Central Valley where growers are more business minded and not so emotional about the vineyard that they planted and hey, this Muscats not working, let’s go back to call them barter, let’s grab this over to Chardonnay or something such as that. So those kinds of change the dynamics of it. And, you know, and it’s hard to really predict what’s going to happen with consumer demand. Most of the booms of the wine business in terms of a varietals, or, or a style of wine were much more consumer driven. White Xin was an accident kind of, in terms of put that product together, though switch from red wine from white wine consumption in the early 90s. To red wine consumptions with the French paradox was not something that anyone saw coming, it came out of the blue the boom of Pinot Noir was kind of tied to to a movie Sideways and it’s but I can’t really think of anything, there’s been very few things where it’s like okay, we’re going to manufacture this demand by a product we’re going to you know, go through our our market research and product development kit on a product that’s not there. Could have much more success from from the consumer poll then from the producer push.

Drew Thomas Hendricks 13:23

Oh, yeah. So I guess what I’m trying to sell a lot of good stuff there on that. So there’s the macro economic thing of just wine and grapes in general that goes through this supply and demand thing, but then on a on a more micro level by varietals and by region utilize certain supply supply crunches as well. From a macro point where are where are we right now in the cycle? trypsin

Steve Fredricks 13:46

you really can’t talk about a macro point because it’s so you know, it doesn’t really count for every area in every vineyard. You know, when if we you know, if we hit the the number the state says 3.6 million tons people resell, we’re going to be in shortage well, maybe but where so much of the grapes are grown are in the in the Central Valley. And and so, you know, maybe there’s a short crop you know, maybe there’s some analysis the say that 150 to 200,000 tons were lost from the clarksburg and Lodi region because of the frost that happened earlier this year. Well, that doesn’t, you know, so that 150 to 200,000 tonnes, you know, it doesn’t mean that an excess from farther south can’t make up the that loss or it has no bearing on Napa cabernet or Russian River Pinot Noir or, or, or, or, you know, Sonoma Chardonnay, it doesn’t really matter. So you have to really look at it from a micro on a macro standpoint, we have two things consumer demand still seems to be growing at a at a good rate at the higher end still, even though it’s slow. old varieties like Sauvignon Blanc, at the higher end are growing faster than other varieties. Do you have that consumer demand, but then you have consumer demand at less than $10 that isn’t doing well. And so those are those are across all varieties where that’s happening, those two trends are happening. So you have that, you know, so you could say is there’s growing sales at one part of it slowing sales at another part of it. So it’s not really a macro point. You know, we’re going to, you know, we don’t have an oversupply in general in terms of a real structural oversupply. We have good quantities of, say northern interior Lodi Cabernet leftover from 21 From New Acres and a good crop 22 with some new acres and a good crop. We’ve got some opportunities with Central Coast Monterey, Santa Barbara Pinot Noir from 21 still available and some grapes that were available, you have been available till the end from 22. So there’s opportunities there doesn’t look like there’s going to be a good size crop in Napa Valley of Cabernet. So this can be three years in a row. Okay,

Bianca Harmon 16:06

yeah, I was gonna ask you about I was gonna ask if that has affected you guys, if you’ve been busier or, you know, or in general, as a business?

Steve Fredricks 16:16

Yes, we have been until recently, much busier since I would say. Since probably April, May of 2020 We’d started to be busier is the pandemic sort of shut things down with some opportunistic, but we were in oversupply prior to the pandemic and a lot of things and wineries were just starting to come out of their excess to need some of the wine that was available, great price had come down. So there’s a lot of opportunity and that brought buyers in. And we’ve been busy all the way in till recently, the market started out fast and it and it’s recently slow down as we’ve you know, gone so long. But the great brokers have been pretty darn busy. In Napa, and Sonoma, any variety that comes available, if there’s excess grapes right now would find multiple buyers for it,

Bianca Harmon 17:08

I ended the fires and all of that, you know, affect anything on your guys’s

Steve Fredricks 17:14

end, from which year you which fires

Bianca Harmon 17:17

from 2017 2020 You

Steve Fredricks 17:20

know, it always during that region, it always does effect what happens. You know, in the same way, there’s, there’s always events that make the growing season difficult, that are quality enhancers that are quality detractors, winemakers have figured out over the years, how to balance those inventories, how to work with the challenging years to try to improve them. You know, so it’s not something that that, that the industry isn’t used to dealing with quality challenges. 20 was a separate deal, because it was, you know, pretty extensive and very widely, widely publicized. But the technology for wineries to mitigate some of the effects of it is is lightyears ahead of what it was, you know, when you’re talking 1817 and 18, by the time we got to 20 There were many ways now.

Drew Thomas Hendricks 18:18

Now, what are the what are some of the technology ways that opened I can’t

Steve Fredricks 18:21

even stay there, just so many different technologies that people have come up with with ultra filtration or polymers, they can remove it, there’s so much more knowledge of the, of the compounds that cause some of the issues. So you know, they go way more about it, and have a much greater confidence in knowing what they’re putting in the bottle. And they did those some of those early fires and, you know, happened to Navy and Mendocino and Lake County a few years before that, where we just a we we’ve taken the job, we’ve reduced it down in this wine but not understanding some of the long term chemical reactions that will balance themselves out for some of the issues that come back in the bottle. So, you know, as as every day has passed since 2020. With that we’ve we’ve had less than fewer and fewer questions from customers fewer and fewer requests for analysis for any of the last few 2020s that have been available.

Drew Thomas Hendricks 19:19

Now with all this, like evolving and contracting, supply and demand, operationally, how do you guys react nimbly and be able to

Steve Fredricks 19:27

address just what we do every day, we challenge ourselves every day, but we’re used to the changes in it because it’s not something you know, maybe for a customer in their region for their variety, it’s a change, but we’re working on both sides all the time, you know, regions that are in excess or varieties and access varieties and shortage. So it’s not hard for us as a broker to be able to switch back and forth. It’s maybe more so the aspect of taking the time to remember our customers aren’t haven’t caught up with us all the time. They’re not on the same page and being patient enough to work with them with the market information around them to explain why this is happening, why what you thought was going to go on six months ago, you know, or when you came to the market six months ago, it was this price to sell and why it’s half the price. Now, what happened? Well, all these things happened. Nothing stands still, it’s it’s evolving all the time. So it’s always taking the time to explain to them and work with them and give them the deep the information necessary. And today’s larger corporate world, they’ve got to go explain to people who may not want daily involved in it, why? You know why this is different than what they thought it was. Sometimes it’s complex, and sometimes it takes a little patience, but we work through it. And you guys have,

Drew Thomas Hendricks 20:52

you’re always I mean, your website is full of education. talks to me about this collateral value

Steve Fredricks 20:59

report is just something we do for lenders to help them understand that at least in a collateral value, for wine, it was developed, because it then allowed banks to work closer with wineries and really help them out more. And so it’s just something we do for lenders standpoint and giving them one level of confidence as to what’s going on in the market.

Drew Thomas Hendricks 21:27

And I kind of kind of plead ignorance on this. So how to explain a little bit more on that it

Steve Fredricks 21:33

really is something we were analyzing the market all the time understanding the supply available, the demand available, the number of buyers, the volume, the price, and so we’re we’re specifying some ranges at which, over certain conditions, wine will sell wine, you know, someone could assume they could sell this wine based on the certain conditions. So

Drew Thomas Hendricks 21:54

it has X number of acres, and they’ve got this amount planted, they can use this report to go to the lenders,

Steve Fredricks 21:59

it’s more of a it’s more about bulk wine, it’s not about the it’s not about land and great pricing, you know, at the aspects of lending, lending for that it’s more about a line line of credit, ongoing lending for inventory and for growth. Oh, with regards to inventory,

Drew Thomas Hendricks 22:18

well, that helps. So you they look at inventory on hand and they can use this to help educate the lenders. Exactly. Cut so talk to me about some of your other services. I know you’ve got your strategic brands and

Steve Fredricks 22:30

yeah, I mean that’s really about working with buyers to help figure out what it is they want. What it is, is variety to per region the size and matching them with customers that could bottle with come up with a brand forum or if the buyer has their own brand come up with wine you know, the the the service provider to provide that wine at the price they want if it’s there so it’s really is about trying to find a niche in the market with regards to what buyers come looking for.

Drew Thomas Hendricks 23:02

Now are they looking for somebody looking to purchase a winery or

Steve Fredricks 23:08

actually this is more about this is more about private label brands that would go to a retailer or or or something such as that or a distributor may want their own brand and market in their region. Okay, it’s happens all the time. It’s just one thing that there are a group of wineries that have these capabilities that don’t may not have their own person out trying to sell it to them and so we we help work with same way brokering bringing buyers that have a need to sellers that have some supply okay

Drew Thomas Hendricks 23:41

now on the on the supply everybody’s everything everybody would the topic that no one’s been talking about but everybody’s been talking about off air is the whole supply chain issue. Has the bulk wine issue has bulk wine and your side of the business have you seen these same supply chain constraints?

Steve Fredricks 24:01

Oh yeah, I mean it’s the the the excuse of that AR sorry supply chain issues but we have before I have to give credit to Marissa Lang for from link twins winery in Lodi. I time is escaping me now about how long ago it was but they were asked her a question. She spoke in the unified symposium general session in Sacramento and I mentioned Hey, we have an issue of trucking in this in this country. The drivers in the trucks and it’s it’s becoming an issue and then the pandemic only made it worse. So yes, the supply chain issues have caused a lot you know, the the negotiating winery that might be opportunistic to try to buy some wine in bulk and put a private label brand into into a discount retailer. They could make that decision pretty darn late in summer. Get glass fine caps is fine corks cardboard box eyeball it, and hit the timeline for the retailer. And now that decision making, you know, it’s got to be done in the springtime, and maybe the wine bargains are there at that time, if you’re shipping wine, you know, distributors, you know, importers shipping wine from around the world in heaven, you know, six, six weeks longer have a lead time to, to hopefully get it here in time to meet this, this timeline. Across the globe, you know, glass cost, every cost has gone up. And and it’s really changed the dynamics, there was a long period of time where the timeline to do something important was X number of days guarantee it was always that way you could get the containers, you could get the trucking, you could get in on a boat, it came no problem. And now it’s like, doesn’t happen. So the the business security just in time inventory issues, all those kinds of things are changing how people are planning their business with a much longer timeline may be holding more inventory. So it’s changing up a lot of how decisions were made in the past. And it seems like it’s going to be with us for a while we’re talking about, you know, the rail workers strike is just gonna move. That’s just gonna throw another wrench in the system where it’s still hadn’t yet, you know, just starting to get a little bit better. Well, I

Bianca Harmon 26:26

think there’s gonna be a whole new issue too, with trucking into California as well, that’s going to be

Steve Fredricks 26:32

in the long run. It’s so expensive. You know, there’s still boats sitting out, you know, offshore in LA, you know, stacked up. I mean, it doesn’t happen in the timeline. So I think that, you know, when it comes to growers, picking grapes, and delivering to wineries, that Trucking is an issue. As always, and you know, now with a lot of grapes being right, but earlier, because of the heatwave, we’ve been having a lot more across the state happening all at once. It just it is, it’s not like we haven’t seen that before. But it’s just a stressful crunch in a time where, you know, labor is tight to really try to do extra.

Drew Thomas Hendricks 27:10

And as a as a broker, I mean, it’s, it seems like it’s a big logistics issue that you have to react to, and be that middleman between the two companies. But how? How do you react to these logistics?

Steve Fredricks 27:24

You know, the, the first thing that we’ve got to do as a broker is remain calm is try to, you know, calm the situation down. They’ll Turrentine had us read this book called Getting to Yes, it was a negotiator. And one of their key things was separate the people from the problem to try to, you know, get it down. What’s the problem here, it’s not a personnel issue. It’s just, you know, bringing the temperature down and trying to figure out work with them all on alternatives. But in trying times, you know, people were working together, yes, we’re three years into the pandemic aspects of stuff, we’ve had a lot of irritating issues, everybody has sort of a much shorter fuse. But so far, they under their understand hate. You know, nobody wants to have dealt with this heat that we’ve been dealing with the last few weeks, it’s not good for the grower, it’s not good for the quality of the wine and wine in the winemakers, nobody’s happy about it. And in that instance, I think by and large, the vast majority of people are working together to try and figure out a reasonable solution. And we can’t do it today. But we can do it tomorrow, or, you know, here let’s work together to try to, to, to, for the benefit of everybody. And that’s what we try to keep people doing. If it’s, you know, Hey, I can’t get these grapes in, you know, we were just meeting for lunch yesterday with the winery and one of their employees. You know, spouses works in another winery, their hoist broke, they had some grapes that were coming in, they like, oh, bring him here, will crush them and use them for you and sending you out and like, hey, what do we owe you? That’s okay. Just you know, don’t worry about it. We just needed to do this for domestic tranquility between us, you know, just a favor. We had the extra capacity. Let’s do it, we can send it to you right away, no big deal. You know, that kind of stuff happens a lot.

Drew Thomas Hendricks 29:15

That sense of like helping each other out. And that camaraderie is something I’ve always loved about the industry. Yeah. It’s still still taking place. And as you mentioned, that I got fines can bring people together. If you keep the conversation on the right course, it is, you know, we

Steve Fredricks 29:31

were one of our younger brokers, William has had, you know, it’s been a challenge between a couple of customers. And the first thing he mentioned was, it’s great that I had them just last week together, meeting face to face talking about some other stuff. So when this this came up, there was a personal relationship from a face to face meeting together with them. And because it probably made it so much easier because they knew both were trying hard to Figuring out what is the best resolution to the problem and, and were calm with it as opposed to you know, inflaming the tension and, and from that. So I thought that was a great observation and a point showing that that personal relationship and that face to face does still help out.

Drew Thomas Hendricks 30:17

Absolutely more now than ever. I can’t tell you the amount of times that email has been misinterpreted. And yeah, you can read any, you’re constantly trying to put your tone into reading the email. Yeah.

Steve Fredricks 30:29

And so my wife forgotten how long we’ve been apart for some of these things and not been able to see seen people, you know, really, it’s like you forget about it. You mentioned Oh, wow, I haven’t seen him, physically seen that gun three years, and I better get out there and see him kind of thing.

Bianca Harmon 30:45

Well, people love the human interaction, no matter. I mean, at the end of the day, it’s always, always gonna be number one that

Steve Fredricks 30:56

I talked to a customer, one of our clients yesterday, and he was mentioning that by coincidence, he was down in Chile on vacation. And one of his clients from the UK was there. I mean, he’s a California winery, they sell them wine from here, but just so happens that his client was down there in Chile at the same time. And you know, they’re both in Santiago. So they get together and you realize, we’ve been doing business for three years, she took over this role for a different person, because I’d never met her face to face but we’d add a whole bunch of zoom calls, talking over different deals over the three years. And it was like we were all brands, you know, in and we we’ve never met, we’ve never met in person. So you know, video has provided some, some level of that kind of person thinks

Drew Thomas Hendricks 31:45

the video has helped a lot. It has. Okay, you mentioned Chile in international how what percentage of the of the US wines that you broker go out of the country. You know, our

Steve Fredricks 31:57

expertise is not in most, most of the volume of wine that goes out for export from California, is exported by the large wineries, they’re working hard to export their branded products around the world. Some of them are working bulk wine, but a lot, a lot less bulk goes out if it’s if it is going out, it might be bottled and branded as the wineries branches bottled in the UK or Germany or Northern Europe, just to make it cheaper to move around and more sustainable the shipper of sipper bladder of 24,000 litres in a container as opposed to only 1100 cases. And we’re not the low cost producer in the world, California isn’t so a lot of the bulk Wine Competition was really about the varietals and a price point and we’ll we’ll lose out to Chile or Argentina or Spain, most every time when it comes to cost base producer. And a lot of the bulk wine that comes in now is all same thing is maybe is packaged is bulk that’s being packaged under a brand in the US whether that’s a three liter box wine, five liter box wine or maybe a 750. So when it comes to spot market stuff is there’s a smaller percentage of just bulk wine coming in, that has no real, you know, home already.

Drew Thomas Hendricks 33:19

Now on a national level. Do you work with producers outside of California?

Steve Fredricks 33:23

You know, we’re our focuses mainly on producers within California. We do work with producers and other states that that will buy wine in bulk from us that may be based in another state but the vast majority is here now is is here, some Oregon Washington maybe are we work with Oregon and Washington producers also. Not as much as we work in California for sure that their their sizes are smaller. But we do have context and we do work with people. Both of those regions.

Drew Thomas Hendricks 33:58

Yeah, so we do a lot of a lot of different areas in the United States on this podcast, and I’m yeah, I’m always just very enthused to see how many grapes are being planted in Texas and New York and exactly a lot of wine, Minnesota.

Steve Fredricks 34:16

We’re working with customers from Arkansas, and so all over the country, but they’re coming to you for California. They’re coming to us for California wine. stuff more than more than that. You know, we’re not working without wine coming here. Yeah.

Drew Thomas Hendricks 34:34

Or even reallocating it within Texas?

Steve Fredricks 34:37

Yeah, no, no, the Texas market has changed a lot. Some of their laws have 100%, Texas and their restrictions on bottling plus their their ongoing water issues and vineyards have made it very difficult for them but then industry and in Texas has grown a lot too. There’s a lot that goes on. There’s a lot of wine produced in Texas and some good wines being produced out there.

Bianca Harmon 34:58

We’ve had a few on The podcast and I’m impressed.

Steve Fredricks 35:04

Actually. Yeah, I mean, the one thing in the last 20 years wine quality around the world has really, through technology, a vineyard technology, winemaking technology has really has really increased a lot, it’s great to see that that you very rarely get something that is that is poor quality, we very rarely get wine sent to us that you think, Oh, this is a bad problem, you know, where they didn’t realize they’ve got a high VA issue or, you know,

Drew Thomas Hendricks 35:35

how do you address that when someone’s sending you one that has like a high view,

Steve Fredricks 35:38

you know, a lot of that’s with quality, it’s really up to the customer, you know, to, you know, obviously, if we’re getting noticed that it’s not commercially acceptable, then we’re making sure that the seller knows, and then the buyer at the time they would disclose it, but the technology is such the the ability for people to make good wines that it doesn’t happen as much, I mean, still things you know, wine doesn’t have color, the wines green and character off the city. And there’s not much you can do with that, but the price would have been mitigated themselves. But a lot of it, we’re leaving it up to the buyer and seller, everybody sees something different and a wine, I don’t know what they’re looking for, that they need for their blend, it may be that the the extra acidity in this wine works perfect.

Drew Thomas Hendricks 36:24

Yeah, balance out something else that they exactly

Steve Fredricks 36:27

going to ever know, everybody’s got a different blend in. And the blend they’re putting together evolves over time based on what they’ve been able to, to, to add to it. So their need can change something, a line that didn’t work three months ago for their blend could work today. So you never know what will or won’t work for somebody. That’s an excellent minute. And then depending on the supply available in the demand in the market, you know, people can can, you know, fluctuate their, you know, their standards a little bit to be able to accept something, a little bit of work, it’s not optimal, but it will work to be, you know, we’ll we’ll have to make it work as we need the wine. Oh, absolutely.

Drew Thomas Hendricks 37:10

So, um, Steve, personally and professionally, how do you you’ve been in the business for a while? How do you stay motivated?

Steve Fredricks 37:16

Oh, I love what I do. I’m a lucky person, you know, when I started with this business with them, and 91, you know, it’s kind of what I, by coincidence, sort of put together the wine in that business. But I really like dealing with people, I really like to try to understand the thought process for people, I’m very passionate about the behavioral economics approach to things and in those aspects. So really understanding how people make decisions and why it always, it’s always intrigued me to look at that and to study it and to try to think about it and we’re we’re in the middle we get to, we get to be part of a lot of interesting decisions, we get to be part of the thought process, you’re talking to a customer, and they’re working through their thought process of why they do something and how they do it. And you really see how the variables in decision making may get altered in terms of who you’re talking to, you could be talking to two people about the same wine and they’re for two different purposes, or they’re coming to make a decision and they’re and they’re, you know, valuing the, the inputs differently, to come to the same conclusion. It’s always interesting to see what people’s reasons are for doing something and how they’re justifying it. Oh, yeah. Justifying doing or not doing and what what is important to them since I, it’s really, you know, it’s really interesting to try to do that. And I’ve been able to, you know, work with a lot of people and not a lot of people for almost, you know, some of these people for almost the whole time I’ve been doing this

Drew Thomas Hendricks 38:56

what a perfect job to do and to be like a student of human interaction and

Steve Fredricks 39:00

it is it’s really interesting, you know, and I just I love I love talking to people about it and seeing what they’re thinking and where they’re coming from and that’s not being daily involved in brokering is always kind of tough, something like living vicariously say that he you know, what, what did he put together in order to do this? Why are they not doing anyone quizzing the brokers on why something’s happening or not empathetic?

Drew Thomas Hendricks 39:26

So that’s a kind of out of the trenches, and you got that 30,000 square foot 30,000 foot view of it. What advice would you give a young broker is is

Steve Fredricks 39:36

right, I think, for anybody that getting in, it’s a, you know, you have to be looking at the big picture and you have to be thinking long term, you know, because you never end you got to always assume positive intent. And you should always be careful of saying something bad about some Money, you’ll never know, who they know, around the world, that’s the case, you know, you you could you could get an answer from a guy oh, you know, that guy we we poured into tasting in this town together or, you know, they they’re wineries, if they’re if they’re wineries are similar close in the alphabet, you got to think at a trade tasting there at some time, who was a roommate of who in college worked together wherever, you know, domestically and globally Oh, I did harvest, you know, random right out of college in, you know, in in the Barossa. Valley. And you know, I room with a guy from that place. So you just got to be careful about saying something bad about somebody and realize that it’s a long term business. Yeah, it’s getting

Drew Thomas Hendricks 40:47

people, and then that whole negotiation process. So earlier this early this summer, I read the book never split the difference. They aren’t as good negotiating, as a broker, he kind of what the both to kind of figure out how to split the difference.

Steve Fredricks 41:00

You know, we tried to do that. But you know, sometimes people fall for just splitting the differences, the easy way to get it done and makes both people happy, you know, certain things. And there’s certain times where that just doesn’t work. He has all kinds of different ways to get people to figure out you need just kind of figure out what’s valuable to them and the transaction, and that’s the fun part, figuring out, if it’s complex, what are the values? What is this person need? Do they need storage? Do they need consistency over time? You know, do they need payment terms? What is it? You know, they want a better quality? Do they need some kind of flexibility? You know, whatever that is, and we try to help people figure that out in our jobs, trying to help them not go too far. both buyer and seller? Are you sure you need that amount of wine? Are you sure you’re gonna grow that fast? We’ve got six other people doing the exact same thing. Are you sure the retailer wants six new products or just one, you know, more from one, and it’s getting people to try to really, you know, think through what they want to do, especially in those bigger times, especially when there’s drastic change, especially when it’s really over supplied or really under supply we’re at, at the, at the, at the worst possible time, you know, in the cycle, to really not do something that you’re going to regret? Sure, sure. And

Bianca Harmon 42:23

you have to speak into the cycle and the time and stuff do you have to manage pretty well sometimes to with customers and clients based on the supply that you have versus the demand and monetize it.

Steve Fredricks 42:36

I mean, look, we, you know, we’re subject to what everybody else is, it just depends on the on the conditions that the buyer and seller have given us. If we have you know, time, you know, an exclusivity, we can do a better job for both buyer and seller. And sometimes we don’t have exclusivity year, we don’t have time to do it. And then it’s really more about speed, but we’re trying all the time to make sure that we’re we’re we’re not playing favorites, we’re letting the market determine who gets what, you know, it’s not about me to play favorites, if I can, if I can avoid it. And some, you know, grapes is different than wine, there’s a much more of a relationship between buyer and seller for grapes, wine people, they’re tasting the product. It’s not about oh, I liked that winemaker, I like that guy, he’s he’s good. I’ll, it’d be great to have him come out to my vineyard in that it’s knows he is going to pay the does the wine good, you know, is it at the right price. And you know, and the buyer and seller never have to talk really. So it’s all different kinds of things. But we try to we’re, our goal is to try to let the market decide what happens like that. Very, very good buyers and sellers decide. Because look, we’ve got it, we got it, you know a buyer, you always have to, you have to do it the same way every time for a buyer and a seller because a buyer can become a seller. And if they think you’re playing favorites for the buyer all the time, when they’re a seller, they’re not going to come knocking on your door to have you sell some form because they think you skew it towards the other side. You have to you have to play it down, you have to try as hard as you can to play down the middle all the time. Because because our customers go back and forth by and they sell a lot of them. And so you have to realize that you got to do the same thing every time cover the same ground with them every time. Do it in the same way they have to be able to trust you, which is why we’ve been you know, our 2023 will be 50 years since we were founded. And there’s a lot of customers that I could say 50 years pretty much working with that company. Maybe not the same people but the same company. And over my time I can look at they’re some of the same people in places for that time. So, Bill, you know, it’s a it’s an important it’s an important aspect of our business that we pride ourselves on. And I think

Drew Thomas Hendricks 45:02

it’s unique to the industry to have such longevity and such long term relationships. You don’t see that in a lot of a lot of industries. Yeah, we’re lucky. We’re lucky. For our sister Steve, where can people find out more about Turrentine?

Steve Fredricks 45:16

Wembley, give us a call? And you, we do answer the phone? Yeah, we do people answer the phone not automated. Because we are a service based company, you can go on the internet to the website, it turrentinebrokerage.com, there’s a lot more on there, really about how to use our services, kind of the information that you need to have thought about before you give us a call, we’d help a lot of people develop new products or find different things they want to do to diversify what they’re doing, to think of different ways in which they can achieve their goals of growth. You know, there are many ways to succeed in trying to find what you want to find. And there are a lot of customers for sellers, they don’t even think are out there for them for their products for their grapes or for their wine. You know, we can always there’s there’s more out there than what people can see on their own. And that’s our job to help them find that. Well, that’s domestically or globally to try to find something that helps me out in the long term, you know, that I can maybe start testing out today, I don’t have to plant my own vineyard, I can find some grapes, or I can find some wine and do something or if I’ve done that, I’ve already got the vineyard, we might help you find a buyer that values your product. And we’ve masked, amassed a lot of information about preferences of people, what they look for, and one of the main things we do is know that so a product comes up the wine grapes from a region. And from our time one of us knows Oh, yeah, no, this guy’s always prize that they may not be looking for, they’re really going to value knowing these grapes, this wine for available, call them and tell them about it. They’re not looking. I know they’re not looking but they’ve always loved this, he may change their mind, they may want it even though they don’t think they do you know, or they’re not looking for it. So those are the kinds of things we were able to do. And you could find that out some of that on the website, learn a little bit and then come to us and we’re happy to answer any questions.

Drew Thomas Hendricks 47:14

That sounds fantastic and very valuable resource. Steve, thank you so much for joining us. Welcome to The Real education.

Steve Fredricks 47:22

Yeah, thank you. I appreciate the time.

Drew Thomas Hendricks 47:25

You have a great day. All right, you too.

Outro 47:33

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