Geerlings & Wade - Cutting Through the Vines (2,787 words)
By Scott Shrake
Facing restrictive state laws, this wine cataloger uses direct marketing expertise and a smart software system to reach an increasing number of customers
Catalog marketing reaches people you wouldn't reach otherwise because of geography or other reasons. But imagine if the goal of reaching customers were complicated by a vast tangle of laws that divided the country into a zigzag of possible/ impossible transactions.
This is the challenge faced by Geerlings & Wade of Canton, MA, one of the nation's largest direct merchants of wine. Through ingenuity and a wonderfully robust computer infrastructure, the company has grown its business exponentially—despite the complex circumstances surrounding the sale of alcoholic beverages.
Huib Geerlings and Phil Wade founded the company in 1986. The two accountants saw a strong need to supply European wines to the American market through a direct channel that hardly existed then. Not until 1989 did the company reach $500,000 in sales. The cataloger now can sell that much in three strong days.
Geerlings & Wade, which went public in 1994, measures its growth in part by the size of its last-12-month buyer base: In 1991, the company had 10,000 last-12-month buyers; at the end of 1999, it had 135,000. Furthermore, the annual number of cases sold has risen from 31,000 cases in 1991 to 365,000 cases in 1999. CEO David Pearce attributes the company's growth to both the expansion into new states by opening licensed retail facilities, and strong direct mail and catalog efforts.
Geerlings & Wade specializes in privately sourced rather than brand wines, with a buyer in California and one in Europe. These buyers, wine experts themselves, deliver as many as 100 samples to Francis Sanders, the company buyer, so he may choose one wine to offer as a "feature" to the customers.