Q&A: Sam Tannahill, Co-Founder
A to Z Wineworks
Tell us about A to Z Wineworks. What do you do?
A to Z Wineworks is a wine label that purchases grapes from vineyards all over Oregon to produce and bottle our own wine. In 2007 we purchased Rex Hill Winery, making it our luxury boutique brand while having a base operation for A to Z. We sell our wine in all 50 states and eight international markets.
How did A to Z Wineworks get started?
We started in 2002 when my wife Cheryl and I partnered with our friends Bill and Deb Hatcher. Before we joined forces, all of us had been working in the Oregon wine industry and established ourselves in the community and independently decided it was time to go out on our own. Each of us had the idea of becoming a négociant – we would buy excess bulk wine, blend it, and sell it under a label. We all borrowed money to purchase the excess wine and ended up making enough for 2,500 cases. The idea was to make a high-quality wine for under $20 that was mostly sold outside of Oregon. Then, we would split the profit and walk away to create our own wineries. After the first wine was released and we started selling, it won all these awards and sold out rapidly! So, we all sat down at Christmastime and decided to actually make a run at this wine label together. Since that moment we have continuously grown and expanded our operations and bought Rex Hill in 2007 for a permanent home.
Tell us about your employees. Who works here?
We are a majority woman-managed company with 75 employees from all over the world. With the exception of this year due to COVID-19, every harvest we have interns from all over the world come to work for us; China, the Philippines, England, Chile, India, Spain, Australia and others. A lot of our permanent employees on the production side come from this program. We have an incredibly diverse employee group which includes a significant number of Latinx community members who contribute to the rich culture at A to Z.
What makes you unique?
What continues to make us unique is our company culture. In 2014 we became the first certified B Corporation winery in the world. We keep that certificate annual and are consistently in the top 10% of companies in the world. This is a commitment to our employees and company culture to be held accountable at the highest level.
What is the biggest challenge you are facing today?
On the production side, our biggest challenge is the cost of fuel and especially the cost of labor. It’s been difficult to overcome. Labor is becoming more expensive at a rapid pace through regulations and state laws. This unfortunately is causing a shift to mechanization in the vineyard and the winery. Labor has just become too expensive to produce the quality of wine that we want at the price we want. Our industry is highly competitive, and we must absorb the cost –we can’t pass on the cost of new laws and regulations to our consumers.
On the sales side, consolidation of distributors is our largest challenge. Ten years ago there were two thousand distributors in the U.S. Now, there are less than 200 and the majority of wine is sold by only four. The other piece is the consolidation of stores like Albertsons and Safeway or Wholefoods and Amazon; how we sell through these channels is rapidly evolving and changing.
What does the future look like for A to Z Wineworks?
The future of A to Z looks great right now and I am super excited. Our growth continues and we have tremendous upside, especially in the U.S. market. Right now, there is an incredible amount of attention on Oregon wine and with a lot of new infrastructure coming in from outside the state there is even more ability to grow from the supply side. Most of our sales right now are from the grocery stores as more people are staying home and discovering the pleasure of cooking with wine. Once we get over the COVID bump we are looking forward to continued growth.
How do you view the future of manufacturing in Oregon?
The word is out on food and beverage manufacturing in Oregon. We have solidified ourselves as one of the premier food and beverage states in the U.S. Reputationally, Oregon is incredibly strong and there are a lot of tailwinds propelling us. However, there are a lot of headwinds in the state too. Costs are going up, taxes are going up and it is becoming a really difficult state to do business in. It is also becoming more difficult to attract the employees we need. The pace of these changes and regulations is rapid and we need to make sure we understand how important manufacturing and natural resource-based manufacturing is to our state’s economy and continue to nurture them to make sure they survive.
What makes you proudest about A to Z Wineworks?
I am most proud of our company culture. We have people who have been with us since the beginning, people who have started their careers with us and even couples and families who work for us. I am proud that we have a high-quality wine at a great price, but mostly that we are a great company that truly is a family.