Provost targeted Asia. Japanese travellers to Canada had already become entranced with icewine—tens of thousands of them visited Inniskillin every year. More important, high taxes in Japan had entrenched a duty-free shopping culture. Thanks to his Courvoisier experience, Provost knew that only a luxury product could produce the margins necessary to succeed. So he pushed Inniskillin to produce a rarer brand of icewine purely for the duty-free market. This “Gold Label” brand, aged in oak and some years reaching 46 Brix, was made from grapes harvested at the lowest possible temperatures, between -12 and -14.
The first order from DFS was disappointing: a grand total of 48 bottles. But soon, Inniskillin icewine was being rolled out in stores across the Asia-Pacific region. Within a few years, it was DFS’s top-selling wine. And in 2004 came Provost’s biggest coup, when Inniskillin’s Gold Label won the Star Product of the Year distinction at the Frontier Awards, the duty-free industry’s big event in Cannes. “I was just stunned,” remembers Provost. He was shaking so much, “I couldn’t even text.”
Today, Vincor is owned by the massive U.S. company Constellation Brands, and while it is increasing its efforts in the traditional “duty-paid” market, the travel retail sector is, if anything, even more important. For premium spirits, it’s the second-largest market in the world after the United States. Duty-free sales at South Korea’s Incheon Airport alone total $1.6 billion (U.S.) a year (duty-free sales in Canada come to just $396 million). The average Chinese traveller spends $490 (U.S.) in duty-free shops per trip. And icewine—positioned by Vincor as “the Rolex of wines”—is the ideal duty-free product. It’s luxurious. It’s small: Four bottles take up the same space in your luggage as one bottle of cognac. And it’s the perfect gift. No wonder Vincor now exports 60% of the icewine it makes.
No export market has seen more explosive growth than China—a nearly 15-fold increase in icewine sales from 2004 to 2011. And with Vincor having locked up the duty-free market for icewine, where does that leave other wineries? It leaves them following the path of Charlie Pillitteri.
Since 1995, when then-Liquor Control Board of Ontario chairman Andy Brandt told him there was no room for his wines on LCBO shelves, Pillitteri has made it his mission to expand the horizons of Canadian icewine throughout Asia. Because the duty-free channel was closed to him, he had to find another way in.
Working through Canadian embassies and trade offices, travelling up to 200 days a year, he found and developed agent reps in each market. One brand per distributor, in each region. (The family-run winery, founded by Charlie’s father, Gary, a onetime Liberal MP, sells eight icewine brands in all.) In China, he says, “if you don’t give them exclusivity, they won’t partner with you. If you overload them, they get scared away.”
He learned by hard lesson always to ship “FOB” (freight on board), which meant as soon as the shipment left the driveway, it was the distributor’s problem. He tried selling “CIF” (taking responsibility for customs, insurance and freight), and DPD (duty paid and delivered), but no more. “You know how many Chinese guys you have to grease to get that wine all the way through the system?”
As he met potential new reps or retailers, he controlled every moment. He made sure he always carried the box of product, fending off any offers to help. “Nobody touched the box.” He referred to the bottles as his “babies.” And when his potential customers asked for samples, Pillitteri delayed the moment as long as possible—usually until after dinner. “I made it into a show.”
He was building up the preciousness of the product, and he wanted to make sure he was there when they brought the glasses to their lips, to see their reaction. “I could gauge my opportunity from that.”
Pillitteri (who, incidentally, pleaded guilty to tax evasion last year and had to pay $122,031 in fines) travels less frequently for the winery now, but he’s still a salesman. He likes to do something many winemakers attempt to do, and that is to tell you what you think their wine tastes like. He’s better at it than most. The second after his Sauvignon Blanc icewine hits your tongue, he says with a knowing smile, “Lemon drops.” Okay, sure. Try a sip of his Sangiovese icewine and he offers, “Cherry bonbons.” Why, yes.
Follow us on Twitter: