There's a lot to keep your watchful eye on when you're running your own business. But something to not overlook is your competition -- it can blindside you or even lead to unexpected collaborations or partnerships. You never know. And you especially never know if you're not watching. So, yes, you should.
Things are slightly different in the wine business, but Bill Terlato, CEO and president of Terlato Wines International, has his own approaches to this. The Lake Bluff-based company has been making a big splash this year, with Terlato himself being named the Businessman of the Year by the Italian Chamber of Commerce. Anyway, I gave Bill a call to discuss how he minds his grapes.
What is the best approach for keeping an eye on your competition?
Bill Terlato: I'm hoping that our approach is a good approach. So, I can tell you what I do. There's a couple of things. We want to understand who our customer is. We want to know as much about our customer as we can. The other important thing for us to understand is how does our product fit into their life. How do they use it, does it reflect what they want, does it reflect their personality, does it reflect their taste? And then you have to look at the competitors and understand where the competitive pressures are coming from with other products that might be a better fit. In our case, a lot of what we do is tied to wine and food and this growing food culture. Wines that are sold for over $15 at retail in the United States represent only five percent of the overall business. For us, we've come to learn that Millenials, which there will be 85 million of them eventually, is the high quality consumer for us. Ten percent of their purchases are over $15 a bottle.
What we came to learn is that generation of people is a generation that grew up with brands and brands are important to them. It says something about who they are. It says something about their personality. And, as they've embraced the food culture, along the way, wine has been pulled along with that.
How does that apply to tracking your competition?
Bill Terlato: The other thing that we do constantly is blind tasting. We identify what the competitive sets are for an individual brand or an individual wine within a brand. And then we go out and we purchase all of those products and then we have someone that sets up for us and we do this about three or four days a week. They set up a tasting where we go into the room and all there is is wines in glasses on sheets with numbers. If ours aren't scoring in the top two or three wines, we go back to the drawing boards with the winemaker.
Are there any approaches you would not recommend?
Bill Terlato: In our business, it's kinda different. There is no secret sauce. What we're dealing with is consumable. Something that people drink. What we have to know is what I explained there. Our job is to bring those products out to the market and to tell that story. So, we go out and see what's in the marketplace. If you're going in and you're calling in a buyer, it's pretty evident to him where we stand.
The other thing is we don't really do anything. Other than understanding who the competition is, we really don't focus on what they're doing. I think it's more that we understand what they're developing, what their business looks like and trying to find out what the opportunity for us that we can come up with a product that's very good.
David Wolinsky is a freelance writer and a lifelong Chicagoan. In addition to currently serving as an interviewer-writer for Adult Swim, he's also a comedy-writing instructor for Second City. He was the Chicago city editor for The Onion A.V. Club where he provided in-depth daily coverage of this city's bustling arts/entertainment scene for half a decade. When not playing video games for work he's thinking of dashing out to Chicago Diner, Pizano's, or Yummy Yummy. His first career aspirations were to be a game-show host.