Last Updated on July 6, 2023 by nicole

Jordan Kivelstadt, the Owner and Wayward Son at Kivelstadt Cellars & WineGarten is a prominent figure in the wine industry known for his innovative ideas and entrepreneurial spirit. With his journey beginning in 2006, Kivelstadt embarked on a career in winemaking, crafting wines for various clients and exploring different wine regions around the world. He established Free Flow Wines in 2009, a company that played a pivotal role in spearheading the wine on tap movement in the United States. After successfully growing Free Flow Wines from a small-scale operation to a team of 230 individuals, Kivelstadt sold the company and redirected his focus toward his own winery. With a strong commitment to family-owned values and a desire to build a scaled-up Sonoma Valley winery, he has dedicated himself to Kivelstadt Cellars and WineGarten while also engaging in consulting ventures on the side.

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

• Jordan shares his core values, which revolve around innovation, sustainability, and having fun
• He shares insights into the wine, highlighting the unique offerings of Kivelstadt Cellars and the WineGarten, a delightful wine garden experience for visitors
• He addresses the challenge of attracting visitors to the winery in an era where travel destinations have become more dispersed
• We explore the wines of Kivelstadt Cellars and delve into what makes them special
• Jordan provides insights into the differences between natural wines, minimal intervention wines, and biodynamic wines
• Jordan shares his experience and process of sourcing vineyards and grapes
• The challenges of scaling production and Jordan highlights the journey from “no man’s land” to success
• The balance between direct-to-consumer and wholesale sales
• The importance of storytelling and authenticity in building a brand, sharing strategies, essential tools and channels, segmentation, and more
• His enthusiasm for the wines and a sneak peek into exciting projects and developments on the horizon for Kivelstadt Cellars

In this episode with Jordan Kivelstadt

Jordan Kivelstadt of Kivelstadt Cellars & WineGarten delves into their unique wine garden experience, attracting visitors amidst dispersed travel destinations, the special qualities of their wines, and the distinctions between natural, minimal, and biodynamic wines. Jordan also shared insights on sourcing vineyards, scaling production, balancing direct-to-consumer and wholesale distribution, conveying his brand’s story, and his excitement for current wine offerings.

In today’s episode of the Legends Behind The Craft podcast, Drew Thomas Hendricks is joined by Jordan Kivelstadt, Owner and Wayward Son at Kivelstadt Cellars & WineGarten, to explore his core values, unique approach to winemaking, and the challenges and successes he has encountered in the industry. We dive into the world of Kivelstadt Cellars and discover how Jordan is reshaping the wine industry with innovation, sustainability, and a renewed sense of fun.

Resources Mentioned in this episode

• Drew Thomas Hendricks on LinkedIn
• Barrels Ahead
• Jordan Kivelstadt on LinkedIn
• Kivelstadt Cellars & WineGarten
• Free Flow Wines
• Copain Wines
• The Donum Estate
• Spotlight Brands
• Ben Salisbury on LinkedIn
• ProWein
• Unified Wine & Grape Symposium
• MailChimp

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

[00:00:00] Drew Thomas Hendricks: Drew Thomas Hendricks here.

I’m the host of the Legends Behind the Craft podcast. On the show, I talk with leaders in the wine and craft beverage industry. Today’s episode is sponsored by Barrels Ahead. At Barrels Ahead, we help the wine and craft industry scale their business through authentic content. Go to barrelsahead.com today to learn more.

I am super excited to talk with Jordan Kivelstadt. Jordan’s the founder of Kivelstadt Cellars and WineGarten and Sonoma, California. Welcome to the show, Jordan.

[00:00:29] Jordan Kivelstadt: Hey, it’s great to be here. Thanks for having me.

[00:00:30] Drew Thomas Hendricks: Oh, thank you so much for being on. So, Jordan, tell me a little bit about yourself and Kivelstadt before we dive into the issues.

[00:00:38] Jordan Kivelstadt: Yeah, it’s a long and complicated story, but the, the short version. Is I got in the wine industry in 2006. Started making wines for a variety of different people. Copain, Donum, did the classic winemaker thing and traveled around. But while I was down in Argentina making wine, I had this idea to put wine and kegs instead of bottles.

So in 2009, I came back, started a company called Free Flow Wines that led the US wine on tap movement. Screw that from my garage to 230 people. Sold it a few years ago and, and now focused on my own winery, which actually started before Free Flow, but really focused on building, another family-owned scaled Sonoma Valley winery, that has, you know, core values of with me and my team and what I think is important.

And then I do a bunch of consulting on the side.

[00:01:30] Drew Thomas Hendricks: Sounds good. What are your core values, since you mentioned?

[00:01:32] Jordan Kivelstadt: Them? Well, for me it’s innovation. It is sustainability. That’s something that I just think this industry needs to continue to drive towards but in a really thoughtful and genuine way. And then to have fun, like I’m a big believer that the wine industry somewhere along the way lost the path of fun and craft beer sort of picked it up and ran with it.

And, I really believe the wine machine needs get back to having fun again.

[00:01:59] Drew Thomas Hendricks: Absolutely. And that kind of ties into the, I mean, there’s a lot to, I kind of wanna unpack on that. And your Free Flow Wines, the first one with the wine in the keg or the keg movement. That’s something that I’ve been passionate about since the mid-nineties.

Back in the day, I wanted to have a store called jugs. It just sort of sold the red and it’s sold the white.

[00:02:17] Jordan Kivelstadt: Yep. No, it was a lot of fun. And this idea that you could get great wine, out of a keg or out of a tap. I mean you know, craft beer movement really paved the way for that and allowed consumers to be comfortable paying 10, 12, $14 for something that comes from draft.

Well, why not do that with wine? And when you explain both the quality and sustainability elements that drive that conversation, it resonates. And in today’s world, with the pressure on labor for restaurants and hotels, it resonates even more than it did 10 years ago. So been really cool to see that continue, to grow and scale.

[00:02:55] Drew Thomas Hendricks: Oh, absolutely. And it also cuts right to the fun cuz there’s, it takes away, I mean, you have all the pump and circumstance and the bottle and the purchasing and all, everything behind what’s in the bottle. But really it’s the fun starts when the wine gets in the glass.

[00:03:08] Jordan Kivelstadt: Agreed. The other funny thing about that is it’s one of my favorite things to watch in a restaurant.

You go to a restaurant and you see someone at the table next to you and the server walks up with a bottle of wine and they do the whole presentation at the table, and they set the cork down on the table. And it’s like this look of fear on the person’s face. It’s like, I have no idea what to do with this, this thing.

And so as a result, it makes it intimidating, whereas it should be fun and engaging, and shareable. And I just think that, for the average consumer wine, both picking off of a wine list and wine presentation can be incredibly intimidating.

[00:03:44] Drew Thomas Hendricks: Oh yeah, absolutely. I mean, there’s a time and a place for everything, and usually, oftentimes the servers, the one that looks the most uncomfortable depending on the restaurant, how they open the wine and it’s like, Ugh.

I just wanna grab it and open it for ’em. Let’s just get it. Get it in the glass.

[00:03:58] Jordan Kivelstadt: Get it in the glass, as you said. So totally

[00:04:00] Drew Thomas Hendricks: Talk about the wine and the glass and your Kivelstadt Cellars. You’ve got a wine garden. Which is something we normally don’t normally see on many winery websites. Tell me about that.

[00:04:10] Jordan Kivelstadt: So again, back to the idea of fun, and I do take a lot of inspiration from the craft beer movement, but one of the things I love is the idea of a beer garden.

And it’s funny to me because everyone talks about wine and food. Wine and food, wine and food. But most wineries, you can’t get food. You can get a snack or a paired bite or something like that. And there, there are legal reasons for that, which most consumers don’t know, in the way the law is written around what wineries can and can’t do.

But I said, no, let’s create a space where people can just come, have fun, eat great food, drink great wine in an unpretentious environment. And so we have this beautiful half-acre outdoor wine garden, where you know on the weekends there’s live music. There’s lots of people and kids and dogs, and it just feels like being your best friend’s backyard.

And everybody’s happy and smiling and drinking wine and just enjoying themselves. And to me, going back to what I said, that’s where I want the wine industry to be. I want us to create a place that brings people together. Because in Europe, that’s what wine is. Wine is a communal activity.

It’s something shared among a family or friends. We just don’t, that’s not the way we think of wine here in the US.

[00:05:21] Drew Thomas Hendricks: Oh yeah, no, for sure. So what, so the experience of that, when you for setting it up, I know it’s like in Napa it’s really hard to get anything more than just a taste at a winery.

Sonoma’s got a little relaxer laws, and I know down where I am in San Diego Temecula area, wine and restaurants in the that sort of like fun atmosphere is more common.

[00:05:42] Jordan Kivelstadt: So the rule is that unless your winery is onsite with your tasting room, you are not allowed to have a commercial kitchen. So that’s why you see so many wineries offering like charcuterie and cheese and things that don’t require a kitchen.

We operate on sort of a little end around that I figured out that allows us to have this large hospitality space where there’s food and wine happening at the same time without having to have the winery physically here on site.

[00:06:12] Drew Thomas Hendricks: Well, that makes sense. Thanks for explaining that. Let’s talk about actually getting people to the winery.

I know people, less and less people are traveling or their travel destinations are getting more dispersed as wineries open up around the country. How are you facing this challenge?

[00:06:26] Jordan Kivelstadt: I think it is one of the great questions that Northern California is gonna face over the next five years, and I think you brought up something that people out here don’t want to readily admit, but I think consumers are grappling towards, so the second most visited wine region in the US outside of Napa is Hill Country in Texas.

Yes. Think about that. You lost an entire demographic of the state of Texas who doesn’t wanna come to California for whatever reasons they might have and can go get a, an honest winery. Let me put rephrase that. Not just winery, but wine country experience right in their backyard.

And the same thing’s happening in the Carolinas in Virginia. It’s happening all across the country. And so we, we may make some of the best wines in the world here in the North Bay, but we have a branding issue. And we have a cost issue. A lot of people, when they look at a trip to Napa or Sonoma, it’s extremely expensive and so it alienates a lot of consumers that wanna come out and live this experience.

[00:07:32] Drew Thomas Hendricks: It does alienate you look at some of the premier experiences in Napa and you’re, you’re sitting down for a tasting, it’s 250 a head just to get six little samples.

[00:07:42] Jordan Kivelstadt: Well, as a guy who’s about to take my kids to Disneyland, I will tell you that there is something more expensive than coming to Napa.

[00:07:47] Drew Thomas Hendricks: You know? It is. And they just raised their prices another 10% I saw.

[00:07:51] Jordan Kivelstadt: It is, it is staggering. What a few days at Disneyland for a family of four costs. But that’s a separate conversation.

[00:07:58] Drew Thomas Hendricks: Well, then it’s the pay-to-play. You take the family there, but then you’ve got the fast passes and you’ve got the jump-the-line passes.

So you plan your entry there.

[00:08:07] Jordan Kivelstadt: Not to mention the, the overpriced food and the things your kids demand that you take home with you and on and on and on and on. So,

[00:08:15] Drew Thomas Hendricks: Oh yeah.

[00:08:15] Jordan Kivelstadt: You just go into it eyes wide open.

[00:08:17] Drew Thomas Hendricks: Absolutely.

[00:08:18] Jordan Kivelstadt: But to answer your question about actually getting people here. I went to why they’re not coming, not why how we get them here.

For us, the attraction has been, we are very close to the Bay Area. So we are at the southernmost end of Sonoma Valley, which makes us 40 minutes from the Golden Gate Bridge.

[00:08:35] Drew Thomas Hendricks: Okay.

[00:08:36] Jordan Kivelstadt: That’s definitely helpful because people can make quick trips to come visit. We have food. Which has been a huge differentiator for us.

People can come here and taste, they can eat, they can do both. They can come with friends, with kids, with dogs. It’s making it more egalitarian where this experience is for everybody from, if this is your first wine tasting ever and you just turned 21, or you are a master Sam and you want a cork dork with me. And we cater to everybody in between, like there’s no person regardless of their wine knowledge or experience level, who’s gonna be uncomfortable in a place like this.

[00:09:14] Drew Thomas Hendricks: Well, that’s great. It’s so, it’s so important to make it approachable. And to cut through that pretense. But approachability aside, the wine, your wines. Let’s talk about your wines and what makes them special.

[00:09:25] Jordan Kivelstadt: Sure. Well, this goes back to this concept of where I believe the place I wanna play in the wine industry is, which is what are my defining character core values earlier, but one just absolute bright red line for us is organic growing.

So we work exclusively organic about an biodynamic vineyards. That’s really important to the stewardship of the land. We believe it makes better grapes and stronger vines, and so they’re more drought resistant. We do a lot of, about 50% of our fruit comes from dry farm vineyards as well. So being conscious of, of obviously what’s going on here in California, and then minimally intervene.

There’s a lot of crazy things that could added to wine that consumers are unaware of. And I’m not bashing the part of the industry that does that. That’s not what I’m here to do. I’m just here to say, “Hey, here’s what’s important to me.” We use all indigenous yeast. We do as little in the wineries as humanly possible to turn great grapes into great wine.

But I’m also a fan of sulfur.

[00:10:28] Drew Thomas Hendricks: Yeah.

[00:10:28] Jordan Kivelstadt: I like consistency. Consistency and stability in my wines. I want a consumer who comes here and tastes the wine and has a great experience and buys a case to go home, and every single one of those bottles tastes great. That’s really important to me, but I’m transparent about it.

Other than that, on an average year where we may make 40 to 50 lots of wine, we make additions to three or four of them. That’s it, and that conditions are basically nitrogen to help our yeast count. Stay happy so we don’t get stink-reductive wines.

[00:10:58] Drew Thomas Hendricks: Yeah.

[00:10:58] Jordan Kivelstadt: I don’t think there’s anybody out there that’s gonna look at that and go, “Oh, you’re doing something inappropriate to the wines.”

It’s, it’s a naturally occurring product that we just add a little more of to make sure we have happy yeast.

[00:11:09] Drew Thomas Hendricks: Yeah. That whole term, naturally occurring product and natural wines and minimally intervented wines and biodynamic wines. I think there’s a lot of confusion now in the marketplace, especially with, with all these natural wines coming out, and I know I’ve had a.

I’ve had my fair share lately. They’re very popular at the some of the restaurants we go to. And it’s, it’s kinda like flipping a coin. I mean, it’s, at times it can be like a code word for bottle acidity. Why don’t you help us lay out the landscape between natural wines, minimal wines, biodynamic wines?

[00:11:39] Jordan Kivelstadt: So let’s, let’s separate farming methodology from winemaking, right? So biodynamic and organic predominantly have to do with the way the grapes are grown. In order to be certified organic wine, you then also have to be an organic-certified facility, and there are limitations to what you can and can’t do in winemaking.

Predominantly what you’ll see today is made with organic grapes. Which indicates that obviously the vineyard sourcing is organic. We can put that on our labels. When it comes to this idea of natural wines, I think it’s just a conversation around the concept of zero intervention by a winemaker, by a human. Right?

You’re gonna pick grapes, you’re gonna let whatever happens happen, and at the end of the day, be left with whatever’s there. The issue with that is there are small things we as humans can do during the wine making process that don’t introduce chemicals or additives, or enzymes to the wine that just help ensure that there is consistent quality in the products that we’re putting out, and that’s where we get the term minimal. Minimal is we only use naturally occurring products that are naturally occurring in the wine. We’ve got nitrogen, Tartaric acid, whatever it is. These are already existing. We’re not adding anything new that isn’t there.

We’re using indigenous yeast, so we’re not introducing a factory produced yeast. to the wine. So we’re letting everything happen naturally. What we’re doing is making small tweaks when necessary in order to ensure that the wine that’s produced doesn’t have crazy levels of volatile acidity or ethyl acetate, or Brettanomyces, or any of the things that can ruin an experience for the end consumer.

Cause at the end of the day we make wine for them, and I don’t wanna die on dogma. Or God even worse lie about what we do. I promise you that an unnamed winemaker out there who is making natural wines and has $50,000 tied up in a tank that is having a problem that makes it unsalable, we’ll do something and then we never want to be in that position.

[00:13:49] Drew Thomas Hendricks: So the natural wine, it’s true. So you, you’re invested $50,000 into this barrel or this tank and it’s got bottle acidity. I mean, there’s little, what does the winemaker do?

[00:14:00] Jordan Kivelstadt: If you are a true zero zero natural winemaker, you can’t do anything. You just have to then try to market or sell off and bulk that product where there are these very minute, naturally occurring things you can do that would’ve rectified that situation. And, and so to me it just makes sense to do it that way.

But again, that’s my philosophy. My winemaker and I like that’s we are very aligned on that. And what we do is we make a lot of really cool wines. And most people think are natural wines, but every bottle tastes great. So let’s use an example, right? We make a Carbonic Zinfandel.

I love carbonic wines. I love Beaujolais. I drink a lot of Beaujolais. And

[00:14:45] Drew Thomas Hendricks: That’s my favorite season. The new bows are out, and I mean in my mind that’s a very natural wine. It’s just from bottle to tank.

[00:14:53] Jordan Kivelstadt: Yep. Clean, quick go. No oak influence all of that. So, but we said, “Okay, how do we make this uniquely California?”

What grape is more iconically California than Zinfandel, right? Then take Zinfandel, we all think of big dense alcoholic wines. Let’s make an 11% alcohol Carbonic Zinfandel, and see how it goes. And it’s barbecue wine. It’s not trying to be anything more than delicious.

[00:15:20] Drew Thomas Hendricks: That’s my exact type of wine. I’m a big proponent of the 11 to 13% alcohol wines, especially for in a convivial atmosphere where you’re out just having fun, you’re not sitting on a serious dinner. I mean that to me that’s the sweet point. And that’s where all the wines used to be, like in the nineties.

[00:15:36] Jordan Kivelstadt: Correct.

[00:15:37] Drew Thomas Hendricks: When I was –

[00:15:38] Jordan Kivelstadt: Our palette as Americans gravitated, bigger, richer, more alcoholic over time. And I think it’s re, I think people are rebounding back now.

[00:15:48] Drew Thomas Hendricks: Is it, I mean it, like when I look at when I’m in a store and I’m kind of search out and I see the natural wines, they do have the lower alcohol, but that’s not by definition, it’s just kind of by chance the way they’re made.

Is that correct?

[00:16:02] Jordan Kivelstadt: I think that when, well when you aren’t going to use modern wine making to adjust the wines when they come in, you are forced to pick earlier because the vast majority of commercially made wines have acid adjusted in the winery. So if you want to same, and that’s why we get confused so much for natural wine is that our wines are that lower alcohol, higher acid style.

[00:16:24] Drew Thomas Hendricks: With the natural wines and the adjusting it and the acidity adjusted.

We just got back from the North Coast Wine Expo and being on the sales side, being on the marketing side, we don’t normally get to delve into the cellars and see actually the different ingredients that can be used to fix a wine. And they had an experiential part of this expo this year where they would, they had a control sample and then they had some different, additives that could be used to make the wine rounder, to make the wine a little more caramel, like it was quite, it was quite revealing for me being, not being on the winemaking side to see what how to see those exact flavors. And now I can pinpoint ’em now that I’m tasting some of the wines as a consumer. Oh yeah. They added the Sauvi wine or whatever to it.

[00:17:05] Jordan Kivelstadt: Yeah. It’s credible to me when if you pull back the cover and realize there are hundreds and hundreds of additives that are put in wine that you as a consumer don’t know are there.

And that’s just not what I want to do. My goal is do as little as we can because if you have great grapes, and that’s the thing, a lot of commercial wines, the big commercial scale wines, they’re not using great vineyards. They’re using vineyards that produce a lot of fruit, and then they can make the wine taste good.

We prefer to work with really great vineyards and let the vineyard, the grapes show through and not wine make them into what we want them to be.

[00:17:45] Drew Thomas Hendricks: Absolutely. So as you started off, how did you go about sourcing these vineyards and sourcing these grapes?

[00:17:50] Jordan Kivelstadt: You just start looking honestly, and it’s taken us 10 years to get vineyard sourcing where we wanted it with the partners that we have, and we have some of these vineyards who worked for eight or 10 years now that are just incredible. There’s one, it’s a 60-acre dry farmed organic vineyard where the average vine age is like 60 years. And they’re just gorgeous, incredible vines.

We get Carignan and Grenache from there. And that’s actually where the Charbono we make comes from, which is again, pretty rare grape here in California anymore. So you find them and then you build great relationships. Don’t mess with your growers. Be good to them. It’s that easy.

[00:18:29] Drew Thomas Hendricks: Absolutely. Talk about, so how many, so you founded this, it was 10 years ago? Kivelstadt Cellars.

[00:18:35] Jordan Kivelstadt: It was founded in 07 actually.

[00:18:39] Drew Thomas Hendricks: Oh yeah, my math. So yeah, 15 years ago. Yeah. Time time’s flying. So over the last 15 years, talk to me about scaling and where are you at right now production-wise?

[00:18:49] Jordan Kivelstadt: So with Free Flow, it stayed very small for a long time.

It was very small, 07, 08, 09. We grew a little bit in 2010, we actually rebranded two Kivelstadt Cellars in 2012. And then I sort of had one of those moments where I was like, “Okay, either I need to make this a commercially viable business or keep it as a hobby.” But I’m sort of stuck in no man’s land.

[00:19:11] Drew Thomas Hendricks: Wow.

[00:19:11] Jordan Kivelstadt: And so in 2015 we opened our first tasting room up in Glen Ellen. So just north of the town of Sonoma. And just sort of dipped our toe in the direct consumer water and understanding what we wanted to be when we grew up. We were all wholesale prior to that. That was great. We learned a lot. We did that for five years and then my wife and I purchased the property where the wine garden is. And here we are now where we see 600 to a thousand people every week, which is amazing.

[00:19:41] Drew Thomas Hendricks: That is amazing. That is amazing. Talk to me about no, so no man’s land. That’s a curious place where a lot of people find themselves when they start making wine and start trying to scale.

What was your key to getting outta no man’s land and kind of the challenges you faced?

[00:19:54] Jordan Kivelstadt: So what I talk to people about now is I say, “Okay if you make less than 200 cases you’re doing as a hobby. Sell it to your friends, pour it places. It’s a hobby, it’s not a business.” The awkward no man’s land is sort of 200 to a thousand or 1500 cases.

Where you don’t really have enough wine to be commercially viable, but you also have too much wine for all your friends to buy. And that’s a terrible place to be. And then you have to make a really big decision. Is this a lifestyle business for let’s say a husband and wife or two partners, right?

Where they’re both gonna work in the business, they’re gonna do all the jobs and, you know, make an okay living and that’s all they wanna do? Or are you gonna try to actually build a scaled-up wine business? Because then you have to hire a bunch of people and open a direct, open a tasting room that is large and sees a lot of people and build out a wholesale business.

And so it, it really becomes that critical decision point of how big do you wanna be when you grow up? And you know, I have lots of friends that run nice 1500 to 3000 case wineries where they’re a hundred percent direct and they do it with their partners and they have a great life. And they love it.

I made the decision that it was really important to me that this be multi-generational. That my kids could be in the business that they wanted to be. But if they didn’t wanna be, they could hire someone to have enough money and a big enough business to actually be able to hire professional management.

Or follow that all the way through. If my kids want absolutely nothing to do with this business, there’s actually something of value here that someone else would acquire and that’s just me speaking from my experience of running other businesses was just. You know I, that’s what I wanted. And so we’re building it.

We make about 8,000 cases a year now. We’re trying to get to 20,000 the next three years. We’re building out our wholesale nationally, with some new partnerships. We are obviously, this place has driven our, sorry, this place, the wine garden. You’re not sitting here with me. Yeah. Unfortunately, has really helped our direct consumer business and the amount of traffic that we’re doing that way.

So, you know, for me this is all about that vision. I want to bring what we’re doing to more people and to do that requires investment.

[00:22:16] Drew Thomas Hendricks: Yeah, for sure. Talking about, well investing, I don’t want to talk about how you’re plan to grow from eight to 20,000, but current landscape, what percentage are you direct to consumer right now versus three-tier wholesale?

[00:22:27] Jordan Kivelstadt: We’re about 35% direct and 65% wholesale.

[00:22:32] Drew Thomas Hendricks: Okay. And is the goal to expand both equally or do you like that ratio?

[00:22:38] Jordan Kivelstadt: I think we wanna land around 75, 25, 70% wholesale, 25% direct. It’s hard to, it’s hard to get huge direct consumer going unless you are either very focused on scores in that top 1% of wine consumers.

And you hit it, right? Or you have a pretty winery on a hill and it’s what everybody wants. And you know, we’re not, we’re not either of those. I, unfortunately, don’t have an extra 10 or 20 million lying around you go buy a pretty winery on a hill. But I also believe everyone says, “Oh, direct consumer direct consumer.” I’m like, “I like wholesale.” I think it’s super important for a couple of reasons. One, I think diversification of your business is really important. I think sampling is hugely important. If you’re a small brand, how are people gonna find you? So the way they find you is you get out in wholesale and they have a bottle.

They love a bottle. They find you on the web or on Instagram. They come out to visit whatever it is, and that they’re symbiotic. And so to me, a really healthy wine business has a solid direct consumer business and a solid wholesale business.

[00:23:56] Drew Thomas Hendricks: That’s very sound. What advice would you give a winery that is primarily direct-to-consumer that wants to expand into wholesale?

[00:24:03] Jordan Kivelstadt: Don’t tiptoe into it. So if you’re going to commit to wholesale, commit to it. First, really understand your COGS. Like understand what it costs you to make a bottle of wine. And understand how wine flows through that channel so you make sure that you can afford it. You can’t sell into wholesale and making 10 points a gross margin.

It doesn’t work. You need to be clearing 40 points. Wholesale, or in that case FOB. If you can’t do that, don’t go in that market. So that’s sort of lesson number one is basic economics. And then number two is, as I said don’t think of it as sort of the place to slot off extra wine.

What it needs to be is a concerted strategy. So, we differentiate, we offer. Some wines in all channels, but we have core wines in wholesale and then we have some differentiated wines in our direct-to-consumer that’s common among most wineries. In addition to that, we have a dedicated team building wholesale with us.

[00:25:06] Drew Thomas Hendricks: That’s key.

[00:25:07] Jordan Kivelstadt: We ended up hiring a third party, because we thought that was a better use of our dollars and time than hiring our own salespeople. They do a great job. We actually just launched with them 45 days ago cuz we really get behind our wholesale business. And they were super excited.

We are super excited. And that’s we asked how we get from, you know, 4,000 cases wholesale a year to15. It’s gonna be good partnerships and thoughtful relationships and growing into some regional chains and just, you know.

[00:25:41] Drew Thomas Hendricks: I think that’s the key that a lot of people forget when they wholesale.

They think they can just slough off their wines or give it to the distributor or give it to the broker and it’s off their hands. They’re gonna go sell it. But I think they forget that it’s a full sales cycle of selling to wholesale, just like you sell to the consumers. Keeping a CRM, keeping the database up knowing who’s out there and actually courting them there. It takes effort to sell to it.

I’m curious, who did you go with for your wholesale side to help sell?

[00:26:11] Jordan Kivelstadt: A company called Spotlight Brands.

[00:26:13] Drew Thomas Hendricks: Spotlight Brands, okay.

[00:26:15] Jordan Kivelstadt: Yeah, they’re great. So it’s a four-person team. They’re based out here on the West Coast, but they’ve got person on the East Coast as well. And they represent brands like ours, which are smaller with scalability, generally driven by a you know, principal. And they have great relationships. They’ve been in the business a long time. And it was one of those things where we interviewed a bunch of different people, but it’s all about finding the right fit both culturally and in their book.

[00:26:45] Drew Thomas Hendricks: Absolutely. That is so key to have somebody that you trust that it is gonna kind of be a good custodian of what you’re doing and actually market it correctly. I know, I spent a lot of time talking with Ben Salisbury at Salisbury Creative.

[00:26:56] Jordan Kivelstadt: Oh yeah, I know Ben very well.

[00:26:58] Drew Thomas Hendricks: So Ben’s very focused in helping wineries navigate that three tier market into it. I had him on the podcast a few, few months ago. And we were talking about exactly what we’re talking about right now.

It’s like you got to treat it as a sales channel that you’re selling into not so much a channel that’s selling for you.

[00:27:15] Jordan Kivelstadt: Correct. Correct. And I, it’s funny because Ben gets the unique privilege now of helping small brands try to figure it out when he was running one of the largest brands that dictate what the wholesalers did.

[00:27:27] Drew Thomas Hendricks: That is funny. Yeah.

[00:27:30] Jordan Kivelstadt: But yeah. But I think it, it’s just back to this concept of balance. It’s just so important that you figure out what your brand, what you, you principle want your brand to be both to the consumer and how big what lifestyle and business you wanna run. I think for a lot of people, they don’t think through all of that.

They just sort of, it’s like next foot in front of the other. And so having that clarity of knowing what you want to be when you grow up, I think is super important.

[00:27:58] Drew Thomas Hendricks: Yeah. So you’ve got a clear idea where you’re going. You’re at eight to 10,000 and you want to grow to 20,000 in three years.

That’s a tremendous leap.

[00:28:06] Jordan Kivelstadt: Yeah.

[00:28:07] Drew Thomas Hendricks: Well then some of the wines probably are in barrels, so you already have the wine cuz it needs to sit for a little bit. But what’s your game plan for growing and the challenges you anticipate facing?

[00:28:15] Jordan Kivelstadt: I think the game plan is finding the vineyards beforehand that we have the ability to scale with.

That was a big issue for us. There are certain wines we can’t grow. I take as much fruit from the vineyard as I can get, either because the vineyard is not any bigger or because other contracts prohibit them from selling me any more fruit. So for us, because everything we do starts in the vineyard, that was the first and most important step was, okay hey, vineyard y. We took 10 tons this year. Can we take 15 next year? Can we take 20 the year after that? And that comes back to building those really great relationships with the growers. So that’s really important. Two then, is lining up partners that can help you access and manage your wholesales more effectively.

Like it is wholesale management is a challenge. It just is. Think about it. I always tell people, I say, so there’s two things you gotta remember for consumers I say, “Every time you walk into the grocery store, look down that wine aisle. How many wines there are, right? How do I, my little brand, jump out across all those brands with their salespeople and their teams and their, just think about how hard it is in this specific industry to brand differentiate and actually break through.”

Ok. If you’re in the wine industry, I think everybody who owns their own winery, who’s like I don’t understand why more people know my brand should go to ProWein once in their life. Have you ever been to ProWein Germany?

[00:29:46] Drew Thomas Hendricks: ProWein? No, I haven’t. No. In Germany? No. Absolutely no.

[00:29:49] Jordan Kivelstadt: Germany. It is the largest wine sales show in the world.

[00:29:52] Drew Thomas Hendricks: Wow.

[00:29:52] Jordan Kivelstadt: There are eight 60,000-square-foot buildings full of wine.

[00:29:58] Drew Thomas Hendricks: Holy moly.

[00:30:01] Jordan Kivelstadt: There are two, two full buildings just of German wine. It’s humbling cuz the US has like one, maybe one 10th of one building.

[00:30:10] Drew Thomas Hendricks: Yeah. I guess Unified is the one that I. It’s like a 10, it’s like 10 times larger than Unified and

[00:30:16] Jordan Kivelstadt: Yes. And it’s all producers. It’s all producers trying to sell their products. And so what’s so humbling about it is you realize just the immense scope of this industry and why it’s so hard to build a brand in this industry. And so I, I just, it was one of the most humbling experiences. And it makes you then realize why you have to think so carefully about your brand and where you want to be and where you wanna play and what your message is.

All of those kind of core brand differentiators, become front of mind.

[00:30:47] Drew Thomas Hendricks: It’s almost a little disheartening. We were, we had someone on the show, I’m gonna kick myself for not remembering the conversation or who it was, but they were talking about that marketing wine is actually the hardest thing to do in the world, cuz one people don’t really need to be drinking it anyways. Two,

[00:31:01] Jordan Kivelstadt: Yes, they do.

[00:31:02] Drew Thomas Hendricks: If they really wanted to drink alcohol, they could drink beer, they could drink spirits. They go through that. Then once you go into the actual level of wine, you got 10,000 skews on the shelf to the average consumer they’re all the same.

[00:31:16] Jordan Kivelstadt: Yeah.

[00:31:16] Drew Thomas Hendricks: Even though they aren’t, but that’s one of the big challenges.

They’ve got the label, you’ve got the story behind them, but so many different stories. How do you keep your story? How does, how do you make, so I wanna get into story and authenticity cuz that’s one of the things that helps you build your brand. How do you convey that story in the general market?

[00:31:35] Jordan Kivelstadt: Well, so that’s actually a great question and one of the big challenges that we’re coming up against right now.

So let me back up a little bit. When we were just a winery it was very easy. We were a winery with a tasting room and we looked and talked like most other wineries. And so I think it actually hurt us in the wholesale market because we didn’t really have brand differentiated content. We were like everybody else,

[00:32:00] Drew Thomas Hendricks: Small family.

[00:32:02] Jordan Kivelstadt: Huh?

[00:32:02] Drew Thomas Hendricks: You’re a small family owned winery.

[00:32:04] Jordan Kivelstadt: Great. Yeah. How many of those have you heard of? Yeah. When we opened the wine garden, all of a sudden we have this intense brand differentiator. We have this unique hospitality space. We own our own restaurant. We are putting our money where our mouth is about food and wine.

Okay. That was powerful. But then what happened was we didn’t know what message we were speaking. Are we talking about a restaurant? Are we talking about a winery? Is it food? Is this lifestyle is where, and what happens is then what made the wines really special? The sourcing. The minimally intervened.

The style of wine that we’re making got kind of lost in the shuffle. And then at the same time, the restaurant didn’t really get focused on, because we couldn’t go deep on food because we’re trying to mix in talking about wine and everything else. And so now Covid threw, we were supposed to open April 4th of 2020, so Covid definitely threw some curve balls at me.

But one of the things we’re doing this year, to answer that question really directly is we’re separating the brands. So the restaurant will have its own brand and its own identity, its own social. The winery goes back to talking about wine. Why we make wine, why our wines are special, why you should care.

And then you have to make sure that everybody you interact with on the wholesale side is parroting the same thing. And those kind of key talking points. And with where the wine industry is today, I think the Kivelstadt is super well positioned to give the consumer what they want with the authenticity they’re looking for.

From the natural wine movement. We are, we’re that wine that everybody wants. It’s honest, it’s straightforward. The wines are delicious, they’re low alcohol. But there’s the consistency there that consumers really are looking for.

[00:33:50] Drew Thomas Hendricks: That makes a lot of sense. How did you go about finding that brand differentiation?

Just sit down and brainstorm with the team. Did you go through a brand workshop? Or did it just

[00:34:00] Jordan Kivelstadt: I do have my team just sat down and we all realized this was happening. We all realized that it was a problem. And what’s nice in my organization is I have someone running the hospitality side of the organization.

I have someone running the winery side of the organization. And they’re both in parallel and in conflict, and that’s great. That’s healthy. So they both said, “Hey, look, my voice isn’t loud enough.” And what we realized was it’s not that either one of your voices aren’t loud enough, it’s that you’re talking over each other because we’re jamming all through one channel.

Right? All that messaging and trying to clear it through one channel. And that just doesn’t work if they’re too different.

[00:34:38] Drew Thomas Hendricks: Oh yeah. Talking about channels, what’s your most important channel for getting your story out?

[00:34:45] Jordan Kivelstadt: I would say it, it is a combination of Instagram and email. We use email a lot.

The wine taste still relies very heavily on it. But Instagram is a very powerful tool for us, as far as brand reinforcement and engagement with our consumers. And then actually the cool one we just started messing around with is text message marketing and really starting to get into text marketing.

[00:35:11] Drew Thomas Hendricks: Yeah, that’s been the trend at the different symposiums. And I mean, it’s been the trend for a while, but it makes so much more sense, especially with the way that people have evolved and the way they’re starting to look at text messaging. It’s really replaced, email isn’t going away, and it’s super important for your long form messaging, but for in the moment and for interaction, I see it as one of the best mediums.

[00:35:32] Jordan Kivelstadt: Yeah. Someone just needs to create a, an app that allows you to save, flag, and organize your text messages so that, I ref, I don’t refuse, I hate text for work related things because I can’t organize it. It drives me crazy.

[00:35:48] Drew Thomas Hendricks: Yeah. WellI kinda like it because I get so many emails with work and text that the squeaky wheel always rises to the top of the text message.

[00:35:57] Jordan Kivelstadt: Yep. Fair enough.

[00:35:58] Drew Thomas Hendricks: So I don’t need to go back and say, now who haven’t I texted in a long time? It’s a front and center for me.

[00:36:06] Jordan Kivelstadt: True, true, true, true. So yeah. I mean, it’s been fun for us to explore those different avenues and outlets. The other one that I shouldn’t discount is when you run a physical hospitality venue the power of Google and not just SEO but Google Ads and they’ve really. The new performance ads that they’ve got now give you a tremendous amount control, and targeting over who you want to see you and come in. So I mean, I’d say that the number of people that walk in the door and say, “Oh, how’d you hear about it? Saw on Google.

[00:36:41] Drew Thomas Hendricks: It’s super important, making sure for wine, especially wineries in a physical location, making sure that your maps is all Google my business, your maps, everything’s set up straight so that people can find you.

[00:36:53] Jordan Kivelstadt: And it’s accurate. Nothing makes people more frustrated than showing up.

And you’re closed on a day. You said you were open or you’re not offering a thing that says you’re offering it is making sure that’s clean and accurate all the time is really important.

[00:37:05] Drew Thomas Hendricks: Yeah, so Instagram. Instagram and email. And I think we could talk about email for a long time. That’s a whole different subject about how wineries are not fully utilizing it and just using the default messaging that their e-commerce system has set up that.

Yeah. I think the biggest thing you can do is actually personalize those messages and instill your kind of brand story into the, into the transactional ones. Like not just your generic abandoned cart message that the e-commerce system sets up, but instill some of your personality.

[00:37:39] Jordan Kivelstadt: And the other thing I think that people don’t take advantage of is segmentation.

Right? Is recognizing that you can’t treat all of your customers the same. So sending the same email to everybody isn’t effective, right? Because certain things don’t matter to certain people. So who are your customer segments? What are you communicating to them? Frequency, right? I mean, we send two to three emails a week, a lot of weeks.

So if I hit the same 20,000 people, three times a week every week. I mean, we would’ve an unsubscribed rate that was unsustainable. So it’s like, okay, let’s use geolocation to target the people that wanna hear about what’s happening this weekend at the wine garden. My wine club member in Missouri doesn’t care. Missouri’s a terrible example, but in Michigan, doesn’t care who’s playing music at the wine garden this weekend because they can’t come anyway. So it’s just starting to

[00:38:37] Drew Thomas Hendricks: Unless they visited and they did enjoy the music and getting that email kind of gives them a fond memory of the time they were there.

[00:38:45] Jordan Kivelstadt: Correct. But if they’re getting that email every week

[00:38:47] Drew Thomas Hendricks: Oh yeah. That, that one

[00:38:48] Jordan Kivelstadt: Then it just reminds them that they aren’t here anymore.

[00:38:51] Drew Thomas Hendricks: Yeah. Time to plan your next trip email.

[00:38:53] Jordan Kivelstadt: Correct. So just being thoughtful about that segmentation has been really helpful for us. Our open rates have almost doubled. As we started thinking intelligently about segmentation of our email database.

[00:39:05] Drew Thomas Hendricks: Yeah. What tools are you using for your email database and segmenting?

[00:39:08] Jordan Kivelstadt: MailChimp and then the segmentation is self-created and then implement.

[00:39:13] Drew Thomas Hendricks: I think some of that self-created one is really important kind of intelligently thinking about how you want to dice up the list.

[00:39:19] Jordan Kivelstadt: Correct.

[00:39:20] Drew Thomas Hendricks: Not so much just these automatic se segmentations.

[00:39:24] Jordan Kivelstadt: Yeah, the automatic segmentations don’t, they’re segmenting on something that may be irrelevant to your customer.

[00:39:31] Drew Thomas Hendricks: Talking about automatic, what are your thoughts on kind of the automated marketing and some of these automated processes that you,

[00:39:37] Jordan Kivelstadt: I think that they’re. Yeah, they’re great for a process that is well-defined. So whether it’s the way you sign up for the wine club or the series of steps that happen in a transaction, anything like that, automation is wonderful.

Where it falls down is as you are well aware, when the customers been getting what they want from the automation and is therefore getting annoyed. And so we don’t use a lot of it right now. We’re playing with drip campaigns and some other email marketing tools. What we do a lot of is, okay, we know this group is really engaged in whatever the subject matter is.

So we send an email to that group. Okay. Well, 70% of ’em open the email and 5% clicked. Okay, well the 70% that opened the email clearly saw something in there that was interesting to them. So you retarget that group again and you tweak the message slightly. You make sure the call to action is more clear, whatever it is. And it’s those series of actions that you, instead of one time, one touch that might have missed the mark you get to retarget the opportunity two or three times to make sure that you’re catching everybody who is legitimately interested in whatever it’s you’re offering.

[00:40:56] Drew Thomas Hendricks: I think that’s a, that’s a really good tip to kind of emphasize retarget the people that have opened the email. I see too many people, when we do email campaigns, they’re so concerned about the people that didn’t open it.

They’re like, I wanna get, why didn’t they open it? Send, send ’em something else, change the subject line it. And really it’s just, they’re not in the mindset. Stop retargeting them.

[00:41:15] Jordan Kivelstadt: My comment is, if you chronically have an 18% open rate. It means you’ve got a bunch of junk people on your email list, cuz they don’t care.

What we do is we make sure that in each of these sub-segmented groups, we have a 40 or 50% open rate because that means that the content that we’re sending in that group of people they actually want. It’s just that simple. And so if the open rates are high, you know, 30, 40, 50% plus it means that that group wants the content that you’re sending them.

If you’re sub 25%, the chances are that you got a bunch of people on your list who just aren’t engaged with the content you’re sharing.

[00:41:52] Drew Thomas Hendricks: No, that’s too true. And maybe your list is a little too large, cuz everybody’s like bigger, bigger. I need to grow my list, grow my list. But I think you should be equally focused on trimming it down and focusing that list, just like you said, through segmentation.

[00:42:06] Jordan Kivelstadt: Correct, because at the end of the day, sending an email to a hundred thousand people that nobody looks at or reads is no different than sending it to a thousand people than nobody looks at or reads.

[00:42:16] Drew Thomas Hendricks: It feels good to say that you gotta send it out to that many people.

[00:42:20] Jordan Kivelstadt: I guess. I want them to do something.

I want them to care, to engage. So, yeah.

[00:42:26] Drew Thomas Hendricks: Absolutely. Email aside, we’re kind of wrapping down. I want to shift back to your wines. Tell me about, we talked about the,

[00:42:32] Jordan Kivelstadt: We went down rabbit hole.

[00:42:34] Drew Thomas Hendricks: The Zinfandel and the and your carbonic. Tell me about one of the, some of the other wines you’re most excited about right now.

[00:42:40] Jordan Kivelstadt: We did the one of the first wine cider ferments. We call it Grav Blanc. It’s a Gravenstein apple cider. And this year Chardonnay. Huh?

[00:42:50] Drew Thomas Hendricks: That would be right up my alley. That’s so

[00:42:52] Jordan Kivelstadt: It’s so good. It’s insane. So we made 350 cases in 21 for 22 sold out in like a month. We’re making cold hunting cases this year, with some big aspirations and hopes for that wine.

It is so good. It’s 9% alcohol. It’s just delicious. The cider on the nose and the wine on the mouth, it’s like this really cool combination. It’s still, it’s not sparkling. it’s just delicious. So that ones really cool. I’m loving that. I think our Sauvignon Blanc is otherworldly. I’m a huge Sancerre fan, but again amazing vineyard.

We have a real defined style the way we do it, but I can’t grow it. I make 800 to a thousand cases a year, and that’s all we can make. And we’re not willing to sacrifice the quality and the style to keep growing. Other cool ones, I’m like looking at my wall of wine goodness. We do a skin fermented white called Wayward Son that I really love.

It has historically been Marsanne and Roussanne. Which has been really cool, but we sort of had the opportunity to rethink it. We’re always constantly challenging ourselves to rethink, and when Sam and I think about my winemaker, I apologize. When we think about the great skin fermented wines we like to drink, a lot of ’em are from Friuli and Pinot Grigio.

So we decided to go for a skin fermented Pinot Grigio this year, for the first time ever. That wine I’ve been making for 12 years from either Marsanne and Roussanne or some combination thereof. So it was a big step for Sam to push me to switch it to Pinot Grigio. And by the way, we are aggressively taking back the o There’s no Pinot Gri.

We are Pinot Grigio all the way. And the wine is spectacular. It is so good. So that’s been really fun too.

[00:44:38] Drew Thomas Hendricks: Yeah. Are you doing more with these orange wines? With the skin fermented ones? So you got, I cannot assume how Marsanne and Roussanne blend would different from a Pinot Grigio blend, but where do you see that category

going?

[00:44:48] Jordan Kivelstadt: This is round two of the growth of skin fermented wines. You know, if you remember right around 2010, 11, 12, they got really popular, a lot of really weird mousey funky ones.

[00:45:00] Drew Thomas Hendricks: Yeah.

[00:45:00] Jordan Kivelstadt: Rose. Rosé wasn’t near as hot as it is now.So the strength of the rosé market allowed for a new skin fermented white market. That probably couldn’t have been 10 years ago. I think there’s still a lot of not good skin fermented wines out there. We think of ours as an entry point into the category. We do 90 days on the skin, so it’s not 30 or 60 or 90. It’s not mousey and weird and funky.

It is a delicious white wine with tannin. It’s balanced. It’s got a nice light layer of tannin to it. It’s got great color. It’s again fun and it shows you what skin contact can do to really make a wine more interesting, more food-friendly, than without you know again, the wine taking over everything.

[00:45:54] Drew Thomas Hendricks: Oh, absolutely. So, Jordan, as we close down here, is there anything we haven’t talked about that you’d like to bring up or discuss?

[00:46:01] Jordan Kivelstadt: I think we still have like two items left on our list.

[00:46:04] Drew Thomas Hendricks: Oh yeah.

[00:46:04] Jordan Kivelstadt: Talking content, but there’s always another conversation another day. No, it’s been really fun. And you know, I love if it doesn’t come through clearly I’m pretty passionate about what we’re doing and about this industry.

I love the wine business and I have the privilege of owning a winery, which is one of the great joys in life. And I have the privilege of working with incredible other people in this industry, to do really unique and cool things. And I just, I really enjoy at a fundamental level what we are as an industry, what we represent.

And I’m excited that we’re entering a phase now where the consumer cares about the story, they care about the authenticity. That’s just really important to me as well.

[00:46:51] Drew Thomas Hendricks: Oh, absolutely. And that’s the story and authenticity that we try to do through the podcast and just hearing it verbally is it’s so powerful.

And your passion definitely comes out.I’m excited. I gotta try this apple. This apple white.

[00:47:03] Jordan Kivelstadt: We can get your bottle not until next year, cause we’re sold out right now. But yeah, the wine’s awesome.

[00:47:07] Drew Thomas Hendricks: That’s where you wanna be.

[00:47:08] Jordan Kivelstadt: Yeah. It’s,

[00:47:10] Drew Thomas Hendricks: Worst thing is I could send it, sell you the last four vintages.

[00:47:14] Jordan Kivelstadt: Yeah, I can do a vertical for you. No problem.

[00:47:18] Drew Thomas Hendricks: No, that’s, congrats on being sold out and I look forward to seeing it. Jordan, thank you so much for joining us today.

[00:47:24] Jordan Kivelstadt: It was a pleasure.

[00:47:26] Drew Thomas Hendricks: You have a great day.

[00:47:27] Jordan Kivelstadt: Same to you.