While U.S. Wine Sales Are Expected To Decline, One Brand Is Defying The Trend
Forbes- Mike DeSimone and Jeff Jenssen
While much of the U.S. wine industry contends with lagging growth and competition from beer, spirits, and cannabis, one wine brand, Josh Cellars, continues to defy the trend and exhibit impressive gains year after year. Just ten years ago Josh Cellars founder Joe Carr was personally selling wine out of the back of his truck, but today the brand’s volume is responsible for Cabernet Sauvignon outpacing Chardonnay as the best-selling variety in the United States.
After working as a sommelier and wine industry executive, Joe Carr founded Joseph Carr Cellars in 2005, and then followed that up by establishing Josh Cellars in 2007. Carr named the brand for his father, a craftsman with a passion for details, creating Josh as the ultimate expression of gratitude, grounded in hard work, high standards, and recognition of others.
Josh Cellars has experienced explosive growth over the last several years, surging from 300,000 cases in 2014 to over two million in 2018. Josh Cellars hit the one million case mark in 2016, and it is on track to hit three million cases by the end of 2019, which is faster growth than any other major wine brand over ten dollars. According to Nielson, as of December 30, 2018, Josh was the top dollar sales growth brand in all of table wine, adding more new dollars to the total wine category than any brand in the industry for the third consecutive year. Nielsen results also show that as of December 2018, Josh was purchased by more households that buy wine in the $10 to $15 range than any other brand, surpassing prior industry leader Kendall-Jackson. In addition, Josh has the number one repeat purchase rate and is the only brand in wine that is significantly both recruiting new consumers and building loyalty with existing drinkers.
While Josh’s staggering success has many wine industry insiders scratching their heads, it makes a lot of sense when one takes into account recent research showing that wine lovers crave an authentic story and connection with the wines that they drink. Joe Carr and his partner, Deutsch Family Wine & Spirits, have a commitment to maintaining a connection with the consumers who drink Josh, as evidenced by a history of charitable endeavors.
A new initiative grounded in the Josh spirit of giving thanks is a partnership with Operation Gratitude, a charity that sends care packages and “Thank You” letters to active military service members, veterans, first responders, and military families. In addition to its lineup of regional and reserve Cabernet Sauvignon and other varieties, the brand has launched Josh Cellars Lodi Reserve “Military Salute” Cabernet Sauvignon. One dollar of every distinctive camouflage-labeled bottle sold will go to Operation Gratitude. Donations of $260,000 have already been made to the charity by Josh and Deutsch Family Wine & Spirits, and an additional $240,000 is expected to be raised through the sale of Josh Military Salute.
At a recent event celebrating the release of Josh Military Salute and the partnership with Operation Gratitude, we had the opportunity to speak with Joe Carr, founder of Josh Cellars, and Tom Steffanci, President of Deutsch Family Wine & Spirits, about Josh’s success and this new alliance.
Joe Carr, Founder, Josh Cellars
I always say the two most important words with Josh are “Joy” and “Love,” because at the heart of it that is what it’s all about.”
World Wine Guys: Why do you think consumers connect so strongly with Josh?
Joe Carr: The main thing about the brand is the story behind it and the fact that it’s an authentic narrative. It is a brand that I named after my late father as a tribute to him. When you have a foundation like that and people take the time to look at it they know that it is real and that it’s done out of love. I always say the two most important words with Josh are “Joy” and “Love,” because at the heart of it that is what it’s all about. Yes, it starts with making great wine, but I think that’s the reason. We have customers who become very loyal, and I have this theory that in the disposable environment that we live in, especially with consumer goods, where you have this and then you move on to something else, Josh is a person—and people don’t move away from friends so easily. They consider Josh to be someone familiar to them, so why [would they] move away from him?
WWG: Do you have a family history of military service that strengthens your commitment to military charities such as Operation Gratitude?
JC: There is a very long history. My family came to America in the late 1600s and the Carrs and the Greens fought in the Revolutionary War. My great-grandfather fought in the Civil War, and then we had relatives who fought in World War II, Korea and Vietnam. My father was in the military for a couple of years, although he didn’t serve in combat. I am very proud to have that heritage, but the connection that I made was when I was 14 years old. My father had a friend who came back from Vietnam, and unfortunately Vietnam kind of followed him back and he wound up dying. One day members of the American Legion came to our house and they were sitting in the kitchen talking with my father, and they asked me to come in. I played the trumpet in the high school band, and they asked me if I would play taps for my father’s friend. That was a defining moment for me. I wound up playing taps for military funerals from the time I was 14 until I was 31, and the last time I played it was for my father. During that time I came into connection with a lot of military families whose relatives had made the greatest sacrifice, and I got to understand the gratitude on both sides. I have a very organic relationship to the military.
WWG: With all of the different types of charities that Josh and you personally could help to support, why do you think it is so important to support members of the military through Operation Gratitude?
JC: I don’t think that we as Americans really grasp what the military has and doesn’t have. With the Operation Gratitude initiative, money is going to a fund to send care packages and letters to servicemen and servicewomen in various countries. The USO used to do that, but now we have to supplement that sort of activity. I was just outside a military base in Norfolk, Virginia, doing a wine tasting, and when we mentioned Operation Gratitude to people, you should have seen their eyes light up. They would say things like, “I was in Afghanistan…” or “I was on a ship…” and “…I got a letter,” and it really meant a lot to them. That was a very significant moment for them. When you are in the dessert for months at a time and you get something like that it really means something, and I wanted to be a part of it.
WWG: What type of message do you think is important to convey to our service people when we write letters of gratitude?
JC: You know, I don’t think letters should be political in any way. I think a letter should talk about about who I am and how much I appreciate you and recognize what you are doing and that I don’t ever take what you are doing for granted, ever. The military is a big employer and a big culture, but for a lot of people the military goes unnoticed or is just taken for granted. You don’t hear about it until you need it. It’s a lot like first responders—you’re going along and you think everything is great and then there’s a problem and you realize they are there. I would send a letter showing pictures of my kids and what they are doing and let the service members know how much I appreciate the freedom my family has because of what they have done.
Tom Steffanci, President, Deutsch Family Wine & Spirits
The driver is that this is something that Joe is passionate about.”
World Wine Guys: How can the launch of Josh Military Salute help the brand to continue connecting with consumers?
Tom Steffanci: This initiative is less about helping the brand and is more about the brand helping others. We are blessed to have the hottest wine brand in America and this reserve tier which is doing great. This addition is a lot more about taking the opportunity to give back. I do think we will get a benefit from that for the brand, but the driver is that this is something that Joe is passionate about. Joe shared the story of playing taps at military funerals with me in a three-page letter, and I boiled it down into a one-minute script, which is how we made the commercial spot. It is a very honest telling of Joe’s story, and the proceeds are going to Operation Gratitude.
WWG: Is Josh Military Salute earmarked for particular outlets or certain areas of the country?
TS: We went national, and I think we are learning now that we may not have had enough wine to go national. We are fortunate in that the vineyards that we source the grapes from are part of our Cabernet Sauvignon program, so we really do have access to a bit more of that by “stealing” it from our Josh base program, so we will be able to make a little bit more. It will be seasonal, and we will certainly be out of this wine by Labor Day.
WWG: What does partnering with Operation Gratitude mean to Deutsch Family Wine & Spirits as a whole and to the Josh brand in particular?
TS: This is an opportunity for us to partner with an organization with which we have shared values. We are a family owned company, so our values as a family are important, and Josh and Joseph Carr have a set of values. With his dad having been in the military and teaching Joe respect for the military from a very young age, this is an opportunity to show that respect on a broader scale. We love what Operation Gratitude does; the notion that our military men and women will get a care package, and even more important than that, receive a letter where a stranger says, “Thanks for keeping us safe,” well, I don’t think you can ever do too much of something like that.
I also have to mention that Josh Cellars was born out of a son’s tribute to his dad. Joseph Carr founded it in honor of his father, Josh. The brand is really born out of gratitude. There is a natural evolution to not only show gratitude to the consumers who have made the brand so successful but also work with causes that are close to Joseph Carr’s heart and to things that mattered to his dad. This move to show gratitude to Operation Gratitude and to servicemen and women is such a natural evolution for a brand whose whole purpose of being is to pay tribute and show gratitude.
WWG: In addition to helping our service members, have you seen any additional value in terms of Operation Gratitude helping the larger circle of families?
TS: We have been involved in other military-based operations that do a lot for people, including the Gary Sinise Foundation and Operation Homefront, both of which help service members, veterans, and their families. Even the act of Operation Gratitude getting letters and care packages to servicemen and servicewomen, the impact does reverberate back to the family. Knowing that the person is appreciated affects their attitude and state of mind, and it reverberates back. And in addition to active duty service people, Operation Gratitude also sends care packages and letters to veterans and military families and children.