Celebrating Ten Years
When brothers Ed and Rob Gillooly received the license for their newly minted Baystate Wine & Spirits on St. Patrick’s Day in 2OO5 they figured it must be a good sign. As a small company looking to break into the predominantly big business of wholesale wine and liquor distribution, the Irish-American siblings hoped a bit of the luck of the green was on their side. That was an understatement. In the 1O years since their launch, the company has doubled three times, outgrown two warehouses, expanded from one state to three, and from two employees to seventy . . . all this amidst the challenges of the 2OO8 financial crisis and a subsequently flagging economy.
Good fortune does indeed seem to shine upon the efforts at Baystate Wine & Spirits.
Baystate Wine & Spirits was the brainchild of Rob Gillooly. “I’ve been in the industry my whole life,” says Rob, who started in a marketing position at Burke Distributing then transitioned to a sales role at Ruby Wines for six and a half years before teaming up with his brother Ed to start Baystate.
Ed’s path to the wine and spirits industry was more circuitous. For twelve years he helmed a business printing company with the similar appellation, Baystate Press. “We had 2O sales reps,” says Ed. “I enjoyed working with each of them and watching them grow.” After selling the business to a Wall Street investment firm Ed entered into semi-retirement and ventured into real estate. It wasn’t as satisfying however, and he quickly learned that he “really liked running companies.” Ed was itching to buy something new when his brother Rob brought him the idea of Baystate Wine & Spirits. His background in management and finance and his entrepreneurial spirit would be a perfect fit for the fledgling venture.
Ed found the wine business to be quite similar to his previous work in printing. “It’s business-to-business sales which is something I really understood – it’s just a different product. I enjoyed having the opportunity to get involved with retailers and restaurants. I was a salesperson for a number of years which helped in running the company because I understood that the customer comes first and how to listen to their needs.” This is central to Baystate’s mission: finding a niche and filling it for both customer and supplier.
Rob’s big vision for the company was to focus small: “I saw a need amongst small, up-and-coming winemakers who might have a hard time getting in with bigger companies.” Baystate would be their home. Rob says, “I realized I have all these relationships on the customer level and identified many small winemakers from all over the world who would be interested in being with a small wholesaler.” Rob’s goal was to source wines of quality that would offer value to the customer at every price point. It’s a strategy they hoped would prove refreshing for their customers: “building a company with real brands from real wineries that are as good as the big brands but sell for less.”
While the goal may have been to focus on all things small, Baystate had a big stroke of good fortune their first week in business. “Early on, Rob wanted to invest in Peirano Estates [Lodi, California],” says Ed. “They were to be a mainstay supplier, a brand to start our business with,” he recounts. “It was our only estate property at the time, our foundation.”
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BRIAN CARDOZA
Wine Director, Golden Goose Market in Boston
“WHAT I LIKE ABOUT BAYSTATE is that they have this two-pronged approach to how they work with customers. The first most people know about which is with very brand-oriented wines, items that are featured on the Phantom Gourmet, and that do great work for retailers. There’s very high margin potential on these branded wines. The second approach is a more understated side to their business: if you look carefully at the portfolio they have some great fine wine selections that are often overlooked. I’ve taken advantage of this and even niched-out a couple of customers with specific wines that compete with higher priced brands. This strategy has done a lot of good for me filling a need in the North End of Boston where my store is located. I use Baystate for both reasons as a retailer and it works very well for me as a fine wine shop within a grocery store. I have grocery store customers looking for value wines, but can also achieve destination wine shop style products from Baystate.
They have a knack for identifying wines that brand themselves well. Wild Oats, for example, is a wine that can look gimmicky on its own on the shelf, then you taste it and you have this really put together example of a sub-$15 wine. It brands itself when you put it in front of people. Baystate excels at choosing wines and labels like this: juice, raw materials and brands that work really well.
On the fine wine side we’ve worked with several labels that undercut big names. They do a great job with sparkling and fine Italian wine, as well as in the upper northwest of the US. One example, Sartarelli Winery makes a fantastic Verdicchio. That and Wild Oats Shiraz are good examples of that two-pronged approach they take within the industry. They do well on both sides as a small company. Their portfolio is excellent to cherry pick fine, it’s a real sleeper. You go to their tasting and fine wine events and try this wine and think ‘where did this come from?’ They have a brilliant new mind, Jared Marcus, who was just promoted to fine wine manager. He has a plethora of experience in the business. He’s a young guy representing a new breed of wholesale fine wine management. He’s the perfect person Baystate needed to start exploiting the fact that they can grow with their fine wines.”[/quote]
On April 1, 2OO5, Baystate’s first official day in business, the Wall Street Journal published a piece on the small Peirano Estates’ Cabernet Sauvignon, calling it “exciting”, “effortlessly lovely”, “earthy and real”, and “for about $18 [retail] – truly a steal”. The timing seemed unreal. “That first month in business we thought we’d sell 1OO cases,” says Ed. “We sold 5OO.” And that flagship wine couldn’t have been a better representation of Baystate’s goal: real, high quality and a great value.
In the beginning Baystate Wines was a two-man operation. Rob sold and delivered everything, building the business on customer relationships he’d cultivated since his early days in the business. “I experienced more enthusiasm than I ever imagined,” says Rob of the response he got from retailers when he announced the new venture.
Growth came quickly for the company and has continued at a rapid clip since the first month in business. In April 2OO5 they hired their first rep, the second month brought another new hire, and by month three their third rep was on board. “Our first rep covered half of Massachusetts,” says Ed. “It was a lot of driving for him in the beginning. He jokes that with each promotion he receives his territory becomes smaller and smaller.”
One of the first reps to come on board, Eric Spitz, is still with the company today. In the beginning “the portfolio really boiled down to about five items that would be desirable. Those brands took hold and we were off and running right out of the gate,” says Spitz. “Everything kept growing really fast, quicker than the Gilloolys anticipated I think. One day I was sitting in the office waiting to be interviewed by Ed, feeling nervous . . . then came the Wall Street Journal story.” Within months the company was moving to a new space, adding trucks and growing quickly. The job was Spitz’s first in the industry. Ten years later he is a District Manager.
“We doubled our business that first year,” says Ed. “We’ve doubled sales every 3 years since we started. We thought that would slow down as we got bigger, but it seems to be continuing.” The first space Rob sublet was intended to last several years. “We outgrew it in 2 months,” says Ed. Just two years later they outgrew their warehouse again.
Rick Curtis, owner of Curtis Liquors in Weymouth and Cohasset, was an early and important customer for Baystate Wine & Spirits and calls the company a “shining example that diversity still lives in our industry.” Baystate has proven to him that “companies of all sizes can thrive and succeed. Curtis notes many barriers to entry in the industry: “What [Baystate] did wasn’t easy, but then again, if it was easy, everyone would be doing it.”
In 2OO9 Peter Lucas joined as Vice President diversifying the senior management team with a background in the technology industry. Lucas spent 25 years at IBM and in financial services. “My background is with big companies,” says Peter. “I spent my time traveling all over the world selling in the US and in Europe and found that I became detached from my local community. To be able to come here and work within communities, to get to know the businesses inside out and have mutual interests with our community members and suppliers has led to a much higher quality of life.”
“The beauty of Baystate, and what is so important to us is that in everything we do we are regional business people, we represent family estates, all the groups we work with are like us as opposed to large corporations,” continues Lucas.
LEFT TO RIGHT
ROB GILLOOLY
VICE PRESIDENT
ED GILLOOLY
PRESIDENT
PETER LUCAS
VICE PRESIDENT
That Peirano Estates Cabernet is a perfect example of the brands Baystate seeks to champion. “We have a picky portfolio,” says Rob. “We’ve been fortunate to attract experienced winemakers along the way. Some of these brands have turned into the bestselling wines we have in market now.” Working with smaller suppliers was the initial intent and despite the company’s growth and successes, remains their choice and priority. “We’ve had opportunities to do business with large international suppliers,” says Rob, “but we always want to stay focused.”
Jim Hodgon of EatWell Corporation and Entitled Brewing Company has been working with Baystate since the beginning and cites the family aspect of the company as a plus when doing business. “I’ve had a relationship with the Gilloolys for a long time and I was thrilled when they opened up their own distribution company,” says Hodgon. “EatWell has been in business for a long time. We’re a family run company as well and that’s what we saw in Baystate. They’re really personable. I appreciate that I can call Ed or Rob at any time and they are going to pick up.” The high quality of customer service is consistent from the top down. “All their other people, from their reps down to their drivers, are great.”
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TIM PAULUS
Wine Director, Fruit Center Marketplace in Milton and Hingham
“I’VE BEEN WORKING WITH BAYSTATE since they started in 2OO5 and they’ve been wonderful. This was around the same time we opened the wine shop at Fruit Center and it’s been a lot of fun helping each other out as we’ve grown. To me those guys have some of the best values on the market. They can do wines in smaller drops which have been very profitable for us. The other thing I really like is that they literally bend over backwards for their customers. I’ve been caught in some situations where I need something on a Friday, or even on a Monday and they can get a truck out on the same day which is nearly unheard of in this industry. It’s some of the best customer service I’ve seen. I’m a big fan of their whole portfolio. Three out of top five selling wines we have are theirs, and they’re not huge commodity brands that you see everywhere.”[/quote]
As managing partner of EatWell, whose properties include Tosca, Caffe Tosca and Stars in Hingham, and founder of Entitled Brewing Company, Hodgon’s relationship to Baystate is unique. At his restaurants he is their customer, but Baystate also distributes products from his recently founded brewery. “I have a perspective not a lot of people have. I see them working hard to get my product out there. I see both sides of their business and I have nothing but great things to say. We have one beer right now and they’re killing it for us. The sales reps are doing great. We just launched last July and we’re in 5O restaurants already.”
In 2OO9, the same year Peter Lucas joined the team, Baystate expanded their operations into Rhode Island with Ocean State Wine & Spirits. Four years later they founded Baystate Wine & Spirits in New Hampshire. Opening other markets has only fed the growth of the company. When they started in April 2OO5 Baystate had just two employees. Ten years later they have 7O, with two warehouses and fifteen delivery vehicles.
If the working style is collaborative at Baystate, so too is the growth. “We’ve grown along with our suppliers,” says Ed. “We started 1O years ago with winemakers who had just one or two people on staff, who have now moved on to 4O different markets.” Baystate is also keen on offering employees opportunities to grow within the company. “Watching our employees expand professionally with us has been awesome,” says Ed. “Our first delivery driver is now our warehouse manager. Our very first sales rep was recently promoted to district sales manager. Our sales manager, who started as a sales rep, is now our sales director. Our marketing coordinator started out with the company with a part-time position in accounting.”
“When you go into bigger companies you have to wait for someone to retire to advance,” says Ed. “we have several people on staff who have been here from day one. We’ve created opportunities for people, and it’s been a big part of how we do business.” When hiring, Baystate looks for people who are looking to move up from careers in restaurants or on the retail side.
A notable example is the accounting staff at Baystate. Several years ago the company automated their IT platform obviating the need for the numerous customer service positions they once required. Rather than laying the whole staff off, a number of these employees were promoted and trained in accounting, where they continue to work for the company in a whole new role. “We promote from within whenever possible,” says Ed.
Baystate has also created unique opportunities for their brands. “We have an exclusive contract with Phantom Gourmet,” says Ed. “We are the only wine distributor allowed to advertise on the show. Our suppliers pay for that, it’s a local way for us to advertise all our brands – it gives the suppliers an opportunity to support retailers. It helps suppliers and helps customers,” says Ed, “a multi-faceted win-win.”
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JOHN HAFFERTY
Owner, Bin Ends Wine in Braintree and Needham
“IT WAS EVIDENT TO ME right from the very beginning that they had a really good understanding of where the market is at today and where it is going. I say that in terms of decisions they’ve made putting together their portfolio. They have been one my top suppliers at both locations since day one. I’ve always been able to rely on them for good quality, moderately priced wines where the consumer didn’t have to pay an arm and a leg. In the early days it was along the lines of Pierano Estates. Sean Miner out of California has been an anchor producer. These are interesting products. None of them are big commercial commodity brands, they’re all smaller family run operations working really hard to compete in what is becoming a very consolidated marketplace.
Baystate is great to work with. They’ve always been very attentive – with good quality sales people and flexible delivery schedules. What they’ve done in a relatively short period of time is, I think, now unprecedented; going from a start-up to a mid-tier wholesaler won the way to becoming a very large wholesaler . . . I don’t think it’s been done before.”[/quote]
So what lies ahead for Baystate?
“There is a lot of change going on in the industry,” says Ed. “We’ll keep listening closely to our customers to understand what we need to do to be successful in the next ten years. We’ll continue to seek great value propositions.
“We’ve built everything we have,” says Rob. “We’ve had nothing handed to us.” The portfolio was built mainly with labels that had never before been in Baystate’s markets. “Over the years we’ve been fortunate to turn a few of these into best sellers – the result of finding great quality brands that showed their true value. That, combined with our hardworking sales team, built each and every one these.”
“Our team is extremely focused and our customers enjoy seeing our new offerings because they are not brands from “Wall Street”,” says Ed. Staying focused on these core competencies – great wine, value at every price and attention to customer needs – has been the key to Baystate’s phenomenal growth and success. And of course, there’s always the fact that they were founded and licensed on St. Patrick’s Day: “We’ve always felt we had a bit of luck on our side as well,” says Ed.
Either way, Baystate Wine & Spirits’ inaugural decade has been a phenomenal run
