As former top marketing executives at Bacardi U.S.A., Raul Marmol and John Gomez were used to launching new products with multimillion dollar national advertising campaigns, slick television commercials and a staff of more than 50 people.
But when they launched Eppa Sangria in October 2011 at Whole Foods stores in Florida, it was a grass-roots effort, and a low-budget venture with no advertising.
Both Gomez and Marmol were regularly working at tastings at the Coral Gables Whole Foods near their house, helping pour the product for consumers and fetching more cases of their wine from the shelves. Partner Britt West was doing the same thing at Whole Foods in Miami Beach, while partner Gonzalo de la Pezuela was running tastings himself at stores from Key Biscayne to New York.
The entrepreneurs wanted to see first-hand how consumers would react to the sangria they had been creating for about 2 ½ years. The result was better than anyone could have anticipated: Between 50 and 60 percent of the consumers who tasted a glass walked away with at least one bottle. The record was a tasting at the Coral Gables Whole Foods, where they sold 106 bottles. Normally a good tasting is about two dozen bottles, they say.
The Whole Foods performance was in essence the test market for Eppa Wine Company, and the first indication they had a winning formula.
“If the Whole Foods customer in Florida wasn’t going to be purchasing the product, we didn’t have a business,” de la Pezuela said. “It was a way to validate the concept.”
That success has continued. During its first calendar year on the market, Eppa is on track to sell about 40,000 cases for 2012 – about 40 percent higher than expectations. The company expects revenues of $2.7 million for the year.
“We blew away our model,” Marmol said. “This has been a remarkable consumer success from the day we put it on the stores. The feedback has remained consistent – it’s all about the taste.”
The key to Eppa’s success has also been its focus on creating a new market niche – billed as the first premium sangria.
Eppa Sangria is far different from the typical $5 bottle of sangria or jug wine that consumers dress up with some brandy and sliced citrus fruit. Eppa is made from organically grown grapes and crafted with a blend of Mendocino cabernet and syrah. The sangria also contains a blend of organic fruit juices rich in antioxidants, including pomegranate, blueberry, blood orange and acai juices. Eppa is designed to be poured straight over ice, though adding fruit is certainly an option.
Coming next spring is a white version made with Mendocino County chardonnay mixed with mangosteen, peach, mango and blood orange juices.
The suggested retail price for both is $11.99, although you’ll find Eppa priced as low as $9.99 on promotional specials. While it’s about twice the price of the typical sangria, customers are still buying.
At Whole Foods in Pembroke Pines, Eppa is consistently one of its top three wines in the store, which has an inventory of about 800 wines, said Alex Mendoza, the store’s wine specialist.
“Usually after they taste it they buy a bottle, then they come back for more,” Mendoza said. “It’s very easy drinking, not too sweet and not too tart.”
During a tasting this month at a Publix in Plantation, Susan Reynolds stopped to taste a cup of Eppa and was impressed with the flavor.
“It’s marvelous,” said Reynolds, who lives in Pembroke Pines and normally favors dry red wines like malbec or pinot noir, but bought a bottle of Eppa. “It has such of punch of fruit, you think the antioxidants are real. It’s something different. I thought it might be healthy for me, too.”
Eppa has ignited the entrepreneurial spirit of the four partners. They had worked together in the Bacardi U.S.A. marketing department, with Marmol as their boss. By 2008, all of them had left the company. Initially they did consulting work, but their real dream was to develop a beverage brand of their own -- the question was what? While most of their experience was in spirits, Marmol had a non-compete agreement so he would have to stay out of that realm for several years.
“We did an awful lot of looking at the playing field to see what potential space would be available,” Marmol said.
During their research, the partners hit on three trends that can help further their success:
• Wellness/Organic: This market has gone mainstream. The organic food and beverage category is a $27 billion industry, according to the Organic Trade Association. “Super” fruits are more in demand as consumers learn about the benefits of antioxidants.
• Sangria: The category is experiencing double digit growth, according to Impact Databank. But while experiencing a surge in popularity in bars and restaurants, the fruity wine has not seen the same growth in retail store sales.
• Wine: The entire wine category in the U.S. has been on a continued growth trend with the amount of product consumed reaching more than a $30 billion retail value. The $10-$12 price point is a growing segment for entry-level premium wine.
“This is not your abuela’s sangria,” Gomez said. “We tried to tap into the mega trends taking place in order to justify a premium price point for sangria that didn’t exist.”
It was Gomez’s then high school-aged daughter who created the name Eppa, which is a Spanish colloquialism for “Hooray” or “How exciting,” similar to the Greek version of “Opa.”
“It was a perfect name for sangria because we’re all about partying and good times,” said Gomez, who in college was nicknamed the Sangria King because of the batches he would concoct in his Igloo cooler. “It was also something with Hispanic roots and easy to say.”
The Eppa formula was created by another former Bacardi executive Jim Goodwin, who was a partner in the venture but died of cancer in summer 2010 and didn’t see the vision come to fruition.
The partners funded the start-up costs for the brand themselves, with some personal bank loans. Marmol estimates that start-up working capital to carry the company through the end of 2013, at which point they hope to break even. The goal is to start generating profits by 2014, Marmol said.
In the first year of sales, Eppa has accomplished what’s often most difficult for a new product: getting shelf space in major retailers.
Eppa is now available in more than 35 states, including Whole Foods and BJ’s stores across the country, at all Publix stores in the Southeast, Fresh Market stores in South Florida and throughout select stores in Florida for Total Wine, ABC Fine Wine & Spirits, Walgreens and Winn-Dixie.
Although it’s only been available in Publix since late July, Eppa is already delivering impressive sales numbers. More than half of Eppa’s Florida business is now generated at Publix. Nielsen data show that Eppa was the top selling sangria at Publix stores in Florida for the four weeks that ended Dec. 8 with a volume of $282,149 and 27,742 bottles. Compared with all still wines at Publix, Eppa ranks 12th in dollar value of sales volumes for wines sold in Florida during the same period, according to Nielsen data.
Publix spokeswoman Brenda Reid would not confirm those numbers, but said that for the year, Eppa ranks within the top 500 wines throughout the company and the top 300 in the Miami area. Publix sells over 5,000 wines.
Eppa’s founders have focused on building distribution in grocery store chains, so the number of restaurants and bars where you’ll find Eppa is limited. But that list includes some high profile locations like SoHo House in Miami Beach and Walt Disney properties in Florida and California. At Disney, Eppa consistently ranks as one of the top two cocktails on the drink menu, said Bradd Levitan, owner of Five Star Wine & Spirits, which serves as a consultant and broker to Eppa
The brand’s core audience is 70 percent female, from single urban professionals to soccer moms between the ages of 25 and 55. Eppa also has a core group of followers among young men in their 20s.
“I think we’ve broken through in the sangria category,” de la Pezuela said. “At least half of the people buying Eppa probably haven’t purchased sangria in bottles before. Eppa is becoming part of the regular rotation for people who drink red blend wines.”
Eppa’s founders believe a better comparison for their sangria would be wines in the $10-$12 price range, like the labels Cupcake and Menage a Trois.
The focus of their success has been about getting consumers to try the product and see the difference first-hand. While Eppa has had no traditional advertising, the founders have invested heavily in a tasting program that has included over 2,000 tastings during the last year.
“They want as many people to taste the product as possible,” Levitan said. “They understand that the pot of gold is down the road and you have to invest in the brand to get it to consumers. I’ve never seen a product take off like this. In my 22 years in the industry, it’s been the most successful brand launch I’ve ever been a part of.”