“If you do business because of price, someone will come along with a better price and steal your business.” – Tony Terlato
Tony Terlato is, and has been for some time, one of the most important people in the wine business. It seems to come to him naturally.
In 1955 Tony worked for his father, Salvatore Terlato, in his wine shop, Leading Liquor Marts, on the north side of Chicago. It was a successful operation selling imported wines and spirits to the luxury wine consumers. A year later, Tony’s future father-in-law, Anthony Paterno, encouraged him to join his wine bottling and distribution company, the Pacific Wine Company. Terlato worked to grow PWC into a highly-respected distributor of fine wines, and in 1963 at the age of 29, he became president of the company.
Tony’s appreciation for food and wine led him to have a kitchen installed on the second floor of Pacific’s wine warehouse. It was there he would invite key restaurateurs and retailers to pair his fine wines with the appropriate cuisine, just as they would serve in their restaurants.The practice became a tradition and it became a sought-after invitation. He also started a practice that is standard today: He would offer free wine list printing in support of his wines. It was very successful and helped him gain distribution on a number of his premium brands and drew him even closer to the restaurateur.
As they grew, Pacific Wine Company started introducing imported wines to their portfolio and grew them to staggering heights. The lineup included what would become some of the most important wines of the time, such as Bolla Veronese wines, Lancers, Mateus, Blue Nun and Mouton Cadet. The game was on.
In 1959, Tony had a chance meeting with Alexis Lichine, author of “The Wines of France” at a dinner in New York. Alexis was one of the most respected négociants and exporters in France, and he took an almost immediate liking to Tony. The evening resulted in an agreement to have Pacific Wine Company import his magnificent portfolio, which included super-premium Burgundies and classified French Bordeaux wines. This was a huge boost to PWC’s portfolio and allowed them to be immersed in the fine French wine business. The association with Alexis Lichine led to the association with Frank Schoonmaker Selections. Schoonmaker was the author of “Wines of Germany” and “The Encyclopedia of Wine.” PWC now had the two most important wine authorities in the portfolio. These opportunities led to the closing of the bottling operation so they could concentrate on importing and distribution.
‘60s – The stage was now set for national importing. In 1961, Terlato discovered a dessert wine with an almond flavor, the precursor to Amaretto. He named it Sicilian Gold. In order to nationally distribute the product, Paterno Imports was created to handle this and other new import business, which included Vittorio Gancia’s famous Asti Spumante. Then in 1969, Pacific Wine Company was appointed the distributor for Robert Mondavi’s new winery. Pacific Wine Company, by the end of the ‘60s, was an established star in the wine distribution business.
‘70s – With the new import company up and running, Tony always had his eye out for new and exciting brands to import into the States. One night in 1972, while dining in a restaurant in Rome, he noticed a particular wine with a distinct label that seemed to be selling like crazy, so he asked to try it. He loved it. The wine was called Corvo. He went to Sicily that week to visit Corvo and arrange an import agreement. At the time, Corvo was only selling around 1,000 cases a year in the United States. Within years, Paterno Imports got the brand to 300,000 cases a year in the United States. If by chance you were selling wine in the ‘80s and Corvo was in your portfolio, as was the case with me, you will certainly remember how much money you made selling this monster of a brand!
Anthony Paterno, Tony’s father-in-law and grandfather to his boys, Bill and John, passed away in 1977, leaving Terlato in control of both Pacific Wine Company and Paterno Imports.
‘80s- In the years that followed, it was a trip to Italy that would give Tony probably his greatest find—Santa Margherita Pinot Grigio. On a quest to find the next great white varietal wine to import, he discovered and tasted every one he could find; Santa Margherita was his outright favorite. So, as usual, he made the necessary arrangements to import and introduce this new wine to America. Most of you know the rest of the story: Not only did it turn out to be the most successful imported wine priced over $15 in U.S. history, but it also created a love affair between Americans and this new varietal darling on the market.
The ‘80s also marked the entrance of his two sons, Bill and John, into the company. Both would be presidents of Paterno Imports and Pacific Wine, respectively, by the age of 35, the same as their dad. They would play a major part in the growth of the company.
‘90s – In 1995, the parent company, International Products, purchased Tangley Oaks, a Tudor Gothic mansion in Lake Bluff, Illinois, to serve as its corporate headquarters. It was custom-built, started in 1916 by meat-packing heir Philip D. Armour and his wife, Gwendolin; it took 16 years to complete. Upon the purchase, John Terlato commissioned a two-year restoration of the estate in order to make it their own, adding a restaurant-style kitchen designed by Chef Jean Joho to provide meals for the many industry guests, as well as to continue the fine dining tradition Tony established in the early days.
Together, Terlato and his sons worked the company’s impressive portfolio, which would include expanding into the domestic market and becoming owners and producers. They bought their first winery, Merlot specialist Rutherford Hill, in 1996. They followed that with the acquisition of the iconic Stags Leap District winery, Chimney Rock, and later, majority share purchases of Alderbrook in Dry Creek Valley, Sonoma and then the Sanford Winery in Santa Rita Hills.
‘2000s – In 2000, the company officially changed its name to Terlato Wine Group. The business had grown consistently, doubling annual sales every five years for the past three decades.”The change to Terlato Wines International highlights our family’s ongoing dedication to the wine business and recognizes our father as an industry icon,” said William Terlato.
The family joined with friend, business partner and renowned Rhone winemaker Michel Chapoutier, to create an Australian winery, Domaine Terlato & Chapoutier. In 2004, they released their first wine, Terlato & Chapoutier Shiraz, Malakoff Vineyard. Robert Parker gave it a 90-92 – not a bad start. (See ITM summer 2013 for more on this.)
Today, Terlato Wines International has more 90+ rated wines than any other wine company in the world. With a global portfolio of more than 60 brands from a host of world-class wine producers, TWI has a 20 percent market share of wines $20 and over. TWG holds family investments in vineyards, wine production joint ventures and wineries in some of the world’s most esteemed wine regions, including Napa Valley, Sonoma County, and Santa Barbara County in California; Victoria, Australia; Italy and the Rhone Valley.
Braced for the future, Anthony J. Terlato, Chairman of Terlato Wines International, guides his two sons William A. Terlato, CEO, and John A. Terlato, Vice Chairman, into the next generation. What surprises will they give us in the future? Is there another Corvo or Santa Margarita out there?
“We’re working on it,” says Tony, patriarch of the family.
“Consider quality as a way of life. We do.” – Tony Terlato
Interview with Tony Terlato
We started in his elegant yet very personalized second story office at Tangley Oaks, the majestic mansion that holds the headquarters of Terlato International in Lake Bluff, Ill. I could view the expansive manicured wooded lawn through the lead pane windows behind him. His desk was covered in bottles, literally twenty or more. He talked about them — the labels, their shape and size — and commented on what he wanted to do to change or update them. As the interview progressed throughout the day, we moved from his office to the dining room for lunch with his sons, Bill and John, and the entire staff, and ended up in the living room for a cigar.
“Would you like me to cut your cigar for you?” he asked.
“Please,” I said, as he precisely cut away the end of a Cuban Romeo y Julieta Churchill. It, like the lunch was superb. Quality seemed to be in everything as we continued with the interview.
You have lots of new products in the portfolio, as usual, from all corners of the world. There are so many, but let’s talk about a few of them. Let’s start with some sparklers, always a good way to get a party started: Berlucchi 61, seriously good Italian brut and rose sparkling wines made for the United States market. I understand they are made similar to the wines of Champagne; can you give us some insight on these?
The Berlucchi Cuvee 61 Brut and Rose, both sparkling wines, are marketed and sold exclusively in the United States. The Rose is produced 50 percent Chardonnay and 50 percent Pinot Noir and the blend of the Brut is 75 percent Chardonnay and 25 percent Pinot Noir. They are fashioned from Chardonnay and Pinot Noir, the same grapes the French use to produce their Champagne.
Can you tell us a little about Santa Margherita Sparkling Rose?
The Santa Margherita Sparkling Rose is a blend of 50 percent Chardonnay, 45 percent Prosecco and 5 percent Malbec, with 5 percent of a pink wine obtained from a brief maceration of Malbec grapes with the skins.
Also on the subject of sparkling wines, Fizz 56 is a wine from Piedmonte that may be overlooked by on-premise buyers. Don’t you think this would make a fun by-the-glass feature?
Fizz56 comes from the heart of Piedmonte, known for its outstanding Brachetto. Brachetto is a light-bodied red grape native to Italy, highly aromatic and naturally effervescent. Consequently, Fizz56 Brachetto Spumante is a red, sweeter Italian sparkling wine made of 100 percent Brachetto, which we are very proud to introduce in the United States. More than just a wine, Fizz56 is a personality. A brand designed with Millennials in mind, it begs to be talked about and tasted; it is a showstopper that is irresistibly delicious and fits into a nightclub scene with ease. It is fun, fresh and whimsical. This Italian sparkling wine not only has a beautiful red color, but it also tantalizes the taste buds with red berry flavors and sweetness. Pop the cork and savor the 56 million bubbles in every bottle. I must say the initial sales, especially by the glass in fine restaurants, are as exciting as the wine.
Lapostolle from Chile is a great brand. How long have you had that and what’s the message on that brand?
We’ve had the Lapostolle brand for 12 months. The message I suppose can be capsulized by the fact that the 2005 Clos Apalta was chosen as the number one wine in the top 100 by the Wine Spectator in 2008. And in 2012, the Lapostolle’s 2009 Clos Apalta received a 96-point rating from the Wine Spectator. The blend of the 2009 was Carmenere (78 percent), Cabernet Sauvignon (19 percent) and Petite Verdot (3 percent). There is consistency of quality at Lapostolle.
Chateau Sancerre, one of your brands, is still owned by the Lapostolle family, correct?
In regards to Chateau de Sancerre, both the on- and off-premise it seems were looking for a Sauvignon Blanc from the Loire of this quality. As you know, it’s seldom that we refer to a wine as an easy sell and I’m not going to lead you to believe it is, so I suppose the timing was just right and we were lucky. There is nothing wrong with being lucky — it usually is the result of intelligent hard work.
Yes, you’re right. It’s more than just a pretty bottle. First, I must identify who created Protea winery in 2012. It was Johan Rupert, who is the wealthiest South African and has a net worth of over $8 billion dollars. I mention this for an important reason: He is not just another guy; he is the owner of Cartier, Alfred Dunhill, Piaget and Mont Blanc, as well as Baume & Mercier. That will tell you a lot about his expectations for what will be the quality standard for the Protea wine brand. The white is produced from 100 percent Chenin Blanc and the red is a blend of Cabernet Sauvignon, Merlot and Shiraz. Our first allocation was sold out in the first 10 states where it was offered. Our allocation for this coming year has been tripled.
Kracher wines from Austria are known by many for their Trockenbeeren Auslese wines, but my question lies with their Gruner Veltliner wines. These wines are phenomenal. Do you think this varietal could explode if given a little more attention?
Yes, I agree the wines are phenomenal and we need to introduce this varietal state by state and restaurant by restaurant each year, to get this wonderful varietal into distribution. The grape is not well known at the moment but neither was Pinot Grigio or the wines of Brunello, or the Corvo brand from Sicily when we started. No one that tastes Kracher’s Gruner Veltliner doesn’t like it – that’s a big plus.
Michael Twelftree has his hands in a few projects, with Two Hands, The Lucky Country and Twelftree wines. We did a write up on his Two Hands wines in the last issue. Are you looking for this to be the major on-premise brand of the group?
It’s a pleasure to work with Michael Twelftree – he’s a bright winemaker as well as a very savvy marketing person. He understands it takes discipline and patience to build brands in the United States. Two Hands, of course, is flying. But Lucky Country and Twelftree brands, though being very good wines, still need continuing tastings and introduction work and we are confident for their success.
Speaking of Australia, how is the Domaine Terlato & Chapoutier wine project doing?
Terlato & Chapoutier is growing every year, doing extremely well. We have gotten very good press and a number of 90+ ratings from the Wine Spectator, the Wine Advocate, and the Wine Enthusiast. The Shiraz Viognier made the top 100 in the Wine Spectator with its inaugural vintage. It’s a pleasure to partner with Michel Chapoutier. He is a brilliant young winemaker and we enjoy our relationship, which began in 1987 when Michel was just 25 years old. The brand this year is up 36.7 percent versus last year in depletions.
The Nonino family, famous for their wonderful Grappas, makes an outstanding Amaro. Besides the traditional use as a digestif, are you seeing any additional use in today’s trendy mixology cocktails?
Nonino right now is enjoying double-digit growth in depletions for the past five years. The Amaro is a perfect finish to a meal, having nice flavors and not very sweet. We have experimented internally with making some mixed drinks but based on its good depletions, decided to continue with our marketing plan of introducing Nonino’s Grappa and Amaro in fine restaurants. I guess I’m a traditionalist. When a cocktail dies, usually the brand dies with it.
Are you and your sons looking forward to the new partnership with the new Colavita Wines?
Yes, my sons and I are looking forward to this new partnership. We bonded well with the Colavita family and John Profaci − we view quality in the same way. It’s the first consideration in creating a global brand. Quality first. It has been received very well in its first offering. The taste profile in blind tastings of the wines surpassed our expectations, which are high.
You seem to attract the wine-loving golfers. Jack Nicklaus (pictured above with Bill Terlato), Luke Donald and Ernie Els all have their wines with you, as well as football great Mike Ditka. Are these golfing buddies of yours or your sons?
These are golfing buddies of my son, Billy, who carries a two handicap and is very competitive. So they have a good time playing together. And as far as the wines are concerned, they are all wine savvy. Ernie Els owns his winery in South Africa and we are his marketer in the United States. For Nicklaus, Donald and Ditka, we produce the wines and they are involved in choosing the final blend of each wine. We don’t make a wine and slap their label on it – they don’t crush the grapes but they are involved in the process of what goes to the table.
Let’s talk about some of the wineries you own. Rutherford Hill seems to be doing well. I just visited there recently, and thank you for your hospitality. You have owned it for 17 years now and you’ve done a lot since you bought it in ‘96. What would you like to say to the restaurateurs reading this about why it is a good investment for their wine list?
The good news is Rutherford Hill (right) in the last five years has produced the best wines that have ever been made on the property. Nine years ago, when my sons and I hired Marisa Taylor, the winemaker, a few of the questions I asked her were, “Do you want to make world class wines?” She said, “Yes.” Then I asked her, “Do you know what the world class wines are?” She said, “Yes.” Then finally I asked her, “Are you capable of making world class wines?” She said, “Yes.” So I said, “If you want to, know how and are capable, then I expect that you will.” She showed she could when the 2009 Rutherford Hill Merlot Reserve achieved a 91 rating in the Wine Enthusiast and all the vintages following since then have been well rated. To show our appreciation, we have just engaged the brilliant Michel Rolland as consultant winemaker at Rutherford Hill. The goal of course, and I say it humbly, is we are looking for greatness at Rutherford Hill. Marisa Taylor with Michel Rolland will be the architects of that goal.
The wines of Chimney Rock are superb. Can you give us a quick overview of why you would like restaurateurs to consider this brand if they have not carried it in the past?
Here again in Stags Leap District, arguably the most celebrated Cabernet Sauvignon vineyards in Napa Valley, Chimney Rock under the guidance of Doug Fletcher was regarded as a very good wine from a small winery. Since Doug’s promotion to vice president of winemaking for the Terlato Wine Group in 2005, Elizabeth Vianna, who did her apprenticeship at Chimney Rock, has been the winemaker. Since 2011, she has held the title of winemaker and general manager and has continued the upward spiral. We planted an additional 60 acres on the golf course property. Today Chimney Rock is highly prized by the cognoscenti (those who know) as the jewel of Stags Leap District, with the current ratings that may justify it. Elizabeth is looking to establish greatness at Chimney Rock. Now when we talk about achieving greatness, I don’t precisely pick the year − what we look for is a continued appreciation for the wines we make for generations to come. What I want to do is set the expectations now so no one is surprised by what we want to achieve on our properties.
Moving on to your family wine, Terlato Vineyards, you obviously don’t hold back on this wine. Every one I’ve tried is superb. Also the best domestic Pinot Grigio I’ve had, period. Are these readily available for our clientele?
Thank you. I, of course, appreciate your evaluation of our Terlato Family Pinot Grigio produced in Russian River soil. Pinot Grigio and Pinot Noir are related. In fact, until veraison, it’s difficult to recognize which is which. There is not much Pinot Grigio planted in Russian River and chances are, the landowners prefer to plant the Pinot Noir, which is a significantly better return on investment. We are at about 11,000 cases simply because of a shortage of Russian River fruit but in any case, I am very proud of the Pinot Grigio we produced. We could sell a lot more if the same quality of fruit was available.
The red blends seem to be your babies. Are the three blends available outside of California?
Yes, the three blends are available in 24 states and this again has to do with the quality of the fruit available outside of what we produce, that we’re looking for. The Angels’ Peak is primarily Merlot, the Devils’ Peak is primarily Cabernet Franc, and the Cardinals’ Peak is Cabernet Sauvignon. I suppose many will realize the wines of my friends to whom I am paying homage. There is one more Peak wine in the making – perhaps being released in a year or two – that will be a blend of Cabernet Sauvignon and Merlot.
I’ve read you would like to leave behind a significant American wine, one that stands shoulder to shoulder with wines of your old friend Robert Mondavi, the Gajas, and even the Rothschilds and Contis. Is Episode that wine?
I did an interview in which I commented that when my sons and I purchased our first winery, we had to commit to not embarrassing ourselves as winery owners among the illustrious world class group of brands we market, by producing something ordinary. We considered it necessary to produce wines every bit as good as the wines we were privileged to market.
Yes, I have some thoughts. Antinori, Frescobaldi, Ricasoli began producing wine in the 1200s, some 800 years ago and approximately 35 generations. I have the benefit of both my sons being with me with the same plan. We have just entered our fourth generation. My granddaughter, Jo, Billy’s daughter, joined the company in July after a three-year apprenticeship with Southern Wines & Spirits. Billy’s son, Tony, will be joining Southern Wine & Spirits mid-August for his apprenticeship.
I have six grandchildren and hopefully my great-grandchildren will find our work inspiring and make it their life’s work. We have 31 generations to go. The goal is set so they can make decisions for the long term, not simply for next year.
The next hour was spent in gracious conversation that was off the record. This was the time I really realized the depth of the four-generational family of which he is the patriarch, and how the future will be waiting for them with open arms. Discussions of new ideas came and went. Tony Terlato very rarely talked about the “old days” the whole day. Even at the age of 80, he is always looking into the future. He thinks and moves with a certain confident fluidity and his refined energy is contagious and inspiring.