Pillitteri Estates Winery is a fifth-generation business and one of Canada’s biggest producers of icewine. It’s also the toast of China.
Richard Slingerland, the company’s Vice-President of Sales, travels to China four or five times a year, spending two to three months, visiting import agents and expanding his business there. The Chinese, it seems, have a taste for rare Canadian icewine and they’re willing to pay for it. Slingerland can charge three times more for a bottle in China.
“We export about a third of our entire wine production,” Slingerland said. “It may even be a bit more than a third now. It’s quite the thing.”
The company hit the Chinese market with its icewine in the late 1990s, but now, after building its brand, sales are 50 per cent icewine and 50 per cent high-end red table wine.
“Pillitteri Reserve wines are getting such high recognition, the Chinese want those, too,” Slingerland said. “Last year and in 2013, we won best red wine for Ontario. We have high-end packaging and it’s taking off in China. The red wines we export are sold for $50-$78 per bottle in our retail store here and in China, they’re going for triple that. We’re still Pillitteri, the largest producer of icewine in the world, but it’s great that it’s opened us up to bringing in high-end red wines as well.”
Slingerland’s maternal grandparents opened the winery in Canada, but it was his great-great grandparents who began the original Pillitteri wine operations in their native Sicily. For the Canadian branch, icewine was their original claim to fame, and that’s what many Canadians still know them for.
“Winemakers often knock on our door and ask if they can join us for icewine harvest,” Slingerland said. “They want it on their resumé that they’ve made the most difficult wine in the world.”
The Canadian operations were founded in 1965 when Gary and Lena Pillitteri purchased a small fruit farm in Niagara. They opened Gary’s Fruit Market in 1973, which still operates on the east wing of the winery. Soon, Pillitteri started growing grapes and selling them to local wine producers. In 1988, he won gold in an icewine competition with a bottle from his first small batch. The win solidified his idea of opening a winery. In 1993, the winery’s capacity was 16,000 cases. Today, it’s 100,000. In addition to China, Pillitteri exports its wine to Japan, Korea, Singapore, UAE, Thailand, Russia, the U.S., Mexico, the Caribbean, Australia and across Europe.
“I think we were the 15th winery in Ontario and now there are more than 200,” Slingerland said.
The relationship with China began in 1995. Gary Pillitteri had just been elected an MP for Niagara Falls.
“My grandfather went on a trade mission throughout Asia with Prime Minister Chretien,” Slingerland said. “He would mention he was a grape farmer and a lot of people asked about wine.”
When he returned home, he dispatched daughter Connie Slingerland and son Charlie Pillitteri to knock on doors in Asia. Their first export was to Taiwan and they attended trade shows and knocked on doors in Taiwan, China and Korea.
“We started to focus on China because our retail business here was seeing a lot of interest from Chinese tourists,” he said.
Their first Chinese importer bought only 400 cases and is still a customer today. But now, he’s joined by Pillitteri’s agents in 13 different provinces in China, with six in Beijing alone.
“Customers are starting to recognize Pillitteri as the most famous icewine producer,” Slingerland said. “We put in the ground work over 16 years to establish ourselves that way. We’ve built that image and priced ourselves very high in the market.”
So why will Chinese consumers pay so much? Many are naturally sceptical, whether about milk, baby food or clothing because counterfeiting is big business.
“There are a number of wineries that entered the China market years ago,” Slingerland said. “Instead of selling for $150 or $200 per bottle, they’d sell for $60 or $70. People believed those bottles were fake. At $150, our bottle seems authentic so they buy it. It’s a very funny situation and I wonder if it will slowly adjust itself with e-commerce.”
For now, however, he’ll toast the status quo.
1) What was your first export sale?
Wanshang International Co. Ltd. in Taipei, Taiwan. My uncle [Charlie Pillitteri] and my mother [Connie Slingerland] travelled there in 1995 and went to a trade show and from that, we got our first importer in Taiwan.
2) How did that first export opportunity arise?
When he was on a trade mission to Asia as an MP, my grandfather, Gary Pillitteri, found a lot of people asking about wine. He returned and said we should go check it out. My uncle and mother went and knocked on as many doors as they could and that’s when we started exporting. We were into China in 1999.
3) When it comes to exports, what do you know now that you wish you knew then?
We would meet with customers and we’d get excited once we had the first sale, we’d almost assume it would repeat again next time. We’d get ahead of ourselves because they’d make promises, but then they wouldn’t order as much as they promised. Customers like older vintages, of course, but it’s a lot of money we were tying up in inventory that we could have used in a better way. I wish I’d known how to properly project future sales.
4) ow has the trading world changed since you started in business?
In the early days, we’d meet customers and they’d make deals seem so attractive. They’d say ‘I want to buy $250,000 in icewine, but I can only pay half now. I can pay the other half in 100 days. It’s a real gamble when you do that, especially in the ’90s, because we didn’t have the same resources to stay connected. To call over the phone was a big hassle. Now, I have WeChat on my phone and I can connect in real time. Even at 2 a.m., they’ll get back right away. I don’t have to learn Mandarin because it translates for me. Technology is working for us now. In the ’90s, if customers decided to disappear, we might never find them again. That happened a couple of times. Today, I can research the company, look at their website. I can call the Canadian embassy and have them research companies for me. Today, international laws are a lot tighter and there are repercussions for bailing on your bill and leaving town. It’s a headache to collect sometimes but at least I can now.
5) What is the #1 thing new SMEs need to know about export and trade?
Know your own product’s positioning. For example, we priced our wines in the high-end and super-premium category because we know we can’t compete with the entry-level price points. Also, listen to your importers on the ground. They know the market. Charging three times as much for our icewine, instead of twice as much, translates for more items sold. Our importers taught us that.