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Wine entrepreneur Mitchell Soffer spends a lot of time in clandestine spy mode.
The owner of Sarasota-based thewinetobuy.com, Soffer says he spends seven days a week checking prices, inventories and products at his competitors. That goes from websites to brick and mortar mom-and-pops to big stores such as Costco and Total Wine & More. Prices at his store range from $15 a bottle to more than $2,000, for something like a bottle of Screaming Eagle.
“I go out snooping,” says Soffer. “I leave no stone unturned.”
Soffer then uses the reconnaissance to make pricing and inventory decisions, both for his website and storefront in the Gulf Gate neighborhood in Sarasota, near Siesta Key. While a relentless competitive analysis tactic isn't necessarily novel, for Soffer, a 30-year wine industry veteran, it's produced some delectable results: Annual revenues have exploded, from $100,000 when he bought the business in 2006 to more than $1 million in 2013.
“To me this is like playing a game, a sporting event,” says Soffer. “It's nice to have a passion for wine, but it's really about I don't like to lose.”
That competitive spirit will only grow with news that wine industry experts project a rosy industry recovery. The 2014 Silicon Valley Bank Wine Report, for instance, says wine sales should rise 6% to 10% this year over 2013. That would come after three straight years of declines in total industry sales. The report also predicts a demand surge in 2014 for both luxury wines and lower-end bottles priced from $10 to $18.
Soffer saw one side of that projection play out last year. For example, thewinetobuy.com revenues were up 20% in 2013 over 2012, he says, but the volume of total cases sold dropped, especially in November and December. So customers spend more money, but buy less wine. Says Soffer: “People are upgrading.”
Soffer's strategy to keep on winning goes beyond competition price checks. One goal is to increase the amount of wine tastings he holds in the store and through partnerships with Sarasota restaurants like Libby's, in Southside Village and Chianti, on Clark Road. Not that the wine tastings and restaurant partnerships are profit machines. “It's not something you make money off,” he says, “but it's something where you can build camaraderie.”
Soffer also hopes the increased marketing presence from the tastings will drive in-sale stores, which are more profitable than online sales. About 50% of Soffer's sales are home deliveries from direct email blasts, while 30% come through in-store purchases and 20% from Internet searches.
An obstacle to increasing in-store sales lies in national chains like Potomac, Md.-based Total Wine & More, which operates a busy east Manatee County location. Soffer attacks that challenge much like a community banker fights Bank of America: through local decisions and down-home, friendly customer service. Says Soffer: “People don't know the flavor profile of their customers like I do.”
Soffer got into the wine business in the 1980s, when he managed a wine store in his native north New Jersey. He later ran wholesale accounts for American BD, a New Jersey-based wine distributor. Soffer and his wife moved to Florida in December 2005, and soon after that he bought the wine business. He's since moved it twice to bigger locations.
Soffer's biggest fear, even amid the success of the past year, remains the big industry giants that can dictate price wars. That's one of the reasons he's so vigilant about price checks. “This is really a dirty business,” Soffer says. “The big guys, if they want to destroy you, they can destroy you.”
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