Scaling Up

How Did Valkyrie Selections Scale Up?

By leveraging relationships, relying on instinct, and relentlessly seeking value, Valkyrie has become a serious player in the import game

Photos courtesy of Valkyrie Selections.

Steve Graf and Baron Ziegler’s motivation to open an import shop in 2011 sounds familiar. They founded Valkyrie Selections with the simple goal of selling enough wine from their favorite producers to bankroll their personal consumption and to bring a few new wines to market—essentially a side project.

Fast forward to now. Valkyrie has a presence in 42 states and is projected to move 200,000 cases in 2018, and 500,000 in another five years, Graf tells SevenFifty Daily.

Valkyrie’s success is remarkable but not shocking, considering the precedent Graf and Ziegler set with Banshee Wines. With little more than an impressive Rolodex, funds borrowed from friends, and prescience, they turned Banshee Wines into a multimillion-dollar juggernaut in just a few years.

“We started Banshee in 2009, when we still had day jobs,” Graf recalls. “I met Baron the day I graduated from college. He was my sister’s boyfriend, so at first I was cautious about becoming too close for obvious reasons, but we were all living in California, and Baron and I were working in wine. All three of us starting spending a lot of time together, and we realized we could work together.”

When Ziegler and Graf’s sister, Catherine, got married, it was clear he was a keeper. Graf was working for the importer Martine’s Wines at the time, and Baron was working for European Cellars. Against the backdrop of the financial crisis, the market for premium wine dried up, and Graf and Ziegler saw an opportunity.

“Winemakers couldn’t afford to turn their juice into wine, and they were willing to sell it at a steep discount,” Graf recalls. The pair decided to launch a pocket label, specializing in Sonoma County Pinot Noirs, that offered premium wines at historically low prices.  

“The first year or two we were just buying juice from growers who had all of these expensive Pinot Noirs in barrels,” Graf says. “The first year, we did 450 cases, but we hit a sweet spot at the lower end of luxury retail, about $20 to $25, and consumers responded.”

Banshee Wines now produces upwards of 45,000 cases a year. For five years, Banshee grew roughly 30 percent a year, and it’s now leveling off at 15 to 20 percent growth, with only a five-acre vineyard (that they recently bought “for fun”) to their name, Graf explains. The continued growth is impressive, especially considering that Graf and Ziegler have so few grapes under vine. Graf explains that they’re able to continue to grow because they source grapes from all over California, with a focus on Sonoma County, through an expanding “spiderweb of short-to-midterm contracts.”

Their goal to make about $10 million in the first few years was met, so Graf and Ziegler used the cash flow from Banshee, got some additional investment capital from friends and family, and created a DBA under the Banshee LLC umbrella.

As mentioned above, their stated goal for Valkyrie was humble. But by using the blueprint they created while building Banshee, the results have been extraordinary. SevenFifty Daily sat down with Graf, Ziegler, and a few of their partners to deconstruct and examine the building blocks of their amazing success.

Seeking Value

“I spent almost a decade working in the import business before I became an importer,” Zeigler says, acknowledging the circular difficulty in becoming an importer without already working as one. “I spent years going over to Spain, talking to producers, working with growers, and developing real relationships. When I told them I was launching Valkyrie, a few came aboard immediately, but that wasn’t actually the goal.”

What he had in mind, and what ended up happening, is that many of his trusted contacts would stay with his previous employer, European Cellars, but start telling new producers about Valkyrie, giving him an opportunity to bring young labels to the U.S. market for the first time.

Victor Charcán, of Roda Winery, explains that it was the combination of his relationship with Ziegler and their shared philosophical vision that drove him to work with Valkyrie and to encourage like-minded wineries in Rioja and Ribera del Duero to do the same.

“I met Baron some 10 years ago, and I liked the guy,” Charcán explains. “He and Steve Graf, whom I met years later, have the knowledge, the intelligence, the passion, the hard-work attitude, and the charisma needed for success. I can honestly say these people are passionate about what they do, they are fun to work with, reasonable, business-driven, and they breathe wine, just like we do. They have built an amazing portfolio, with a strong Spanish presence, that fits perfectly all together—there is good strategic thinking behind it. They come over to Spain every year, and they are genuinely good people—and beyond, they are family.”

Charcán adds that his wines “need to be explained” to buyers who may not be familiar with their origin, quality, and history, and that “in the book of a big importer,” they would be “lost.”

While Valkyrie’s portfolio represents more than 30 growers, including benchmark appellations like Burgundy, Bordeaux, and Rioja, it skews Spanish, a fact that comes down to economics and availability as much as it does to personal taste.

“There is just so much opportunity in Spain right now,” Ziegler explains. “The country is still finding its way in wine. Until the 1970s, Spain had a Fascist economy and government. Now winemakers who have been using organic, sustainable growing methods and working with 70-year-old vines all along are able to bring these incredible wines to market at relatively low prices.”

Valkyrie specializes in leveraging nascent and financially strapped markets, and sniffing out up-and-coming regions before the rest of the industry. Much of its Spanish portfolio hovers around $12 to $18; Ziegler argues that equivalent organically produced, carefully made wines from France or Italy retail for a lot more.

Take English sparkling wine, a sector that struggled for several years because of terrible crops and, frankly, a bad reputation. Valkyrie invested in relationships with two English producers, Hattingley Valley and Nyetimber, and in the past few years, their harvests have been extraordinary, just as a newfound critical and popular fixation with English wine has developed. (Hattingley Valley and Nyetimber have both been particularly lauded.)

But Ziegler is the first to admit that a single-minded focus on purely economic value isn’t the only thing shaping Valkyrie’s book.

Logical Considerations

“Steve and I love sparkling wine,” Ziegler says. “So we have built a portfolio of some of the best sparkling wines and Champagnes in the world that typically go for less than $100 a bottle.”

Graf concurs, explaining that he and Ziegler build out their portfolio with both value-driven business decisions and their own palates in mind.

“It’s the $12 Cava that’s keeping the lights on,” Graf says, “and the grower Champagne that serves as the star attraction that signifies our overall philosophy.”

Valkyrie’s philosophy has not gone unnoticed in the industry. Whole Foods named Banshee Wines and Valkyrie Selections the Outstanding Wine & Beer Supplier of the year in 2016, an honor the luxury grocer bequeaths on partners it believes embody its own sustainably minded mission and values.

Whole Foods has also partnered with Valkyrie on an exclusive line of organically farmed wines from El Terrano and Calixo Cava for the grocer’s shelves. The wines—Tempranillo, Garnacha, Monastrell, Garnacha Rosado, Albarino, and Verdejo from El Terrano, and sparkling wine from Calixo Cava—are all priced at $15 or less.

Ziegler and Graf have been able to balance their passion for delicious wines and great deals with pure practicality.

“There’s a romantic idea of importers driving through the countryside in the Loire Valley, looking at farmland, and tasting amazing wines,” says Graf. “But we really have to be much more practical about it if we want to build a great portfolio.”

So instead of gassing up a Citroën Traction Avant and exploring the chalkstone villages and fragrant vineyards of the Loire Valley, Graf and Zeigler report to industry trade shows—namely, Vinitaly in Verona, and ProWein in Düsseldorf—with lengthy and precise shopping lists.

“There are thousands of exhibitors, and they are all very clear about what they’re looking for,” Graf says. “We might see a need for a Sauvignon Blanc from the Loire Valley, and in one day we’ll go to the tables of 100 producers who are looking for a U.S. importer and taste our way through until we find the best one in the price point we’re looking for.”

While Valkyrie’s portfolio ranges from $12 Cava to the much more dear grower Champagne, most of it resides comfortably in the $18 to $25 high-end “good deal,” low-end “luxury” range. Most of their labels also produce between 10,000 to 40,000 cases per year, though they do have a Grenache-maker who cranks out millions of bottles, says Graf, and a “gem” from the Loire Valley that hovers around 1,200 cases annually.

And just as the $12 Cavas keep the lights on, they also pay for the small-batch, costly wines that Graf and Ziegler see as Valkyrie’s banner products.

“It’s just as much paperwork getting one case shipped from Europe as it is getting 10 pallets,” Graf points out. “So we coordinate and make sure there’s space in those 10 pallets for a few cases of expensive Champagne or Rioja.”

Offering Value

Expertly managing logistics is one thing. Persuading a client to completely revamp their label and marketing strategy is another. But Graf and Ziegler were moved to take decisive action when they saw the potential for wild success (taste plus price point) and failure (an old-fashioned label) in one winemaker in particular.

Azul y Garanza Tempranillo was farmed organically, it was priced very moderately, and it was delicious,” Graf says. “But the label said ‘Fiesta,’ with each letter a different size and font—honestly, it looked kind of like a ransom note. When we discussed the possibility of changing it, [the producer] was extremely receptive. We now sell 10 times as much and have extended the line to include a white and a rosé.”

The winemakers at Azul y Garanza, Dani Sánchez and María Barrena, view their relationship with Valkyrie as more of a partnership than a business transaction.

“Since the very beginning we had a very special personal connection with Baron and Steve,” Sánchez says. “They have the same spirit as us. They are a young, fresh company, caring for organic winemaking. We have not only a business but friendship and fellowship.”

Not everyone is open to Valkyrie’s marketing advice, though.

“Winemakers in Spain simply want to make a great product and sell it,” Ziegler says. “There is no ego or deep sense of tradition to offend. So if we make a suggestion, we’ve found they are a lot more likely to listen to us than typical winemakers in Italy and France.”

Graf and Ziegler explain that they’ve learned to whom and how to pitch marketing advice, and so far, the handful of labels that have agreed to take their advice have seen a significant uptick in sales.

As for wine buyers, they depend less on Valkyrie’s polished presentation, and more on their palate. As Graf points out, this is especially important with the Spanish market.

“There are so many wineries in Spain trying to get into the U.S. market,” he says. “That has resulted in a lot of $12 Spanish wines. But a lot of them are really, really bad. One of our most important roles, as I see it, is to make sure we bring only truly excellent wines to market, at various price points.”

Brent Karlicek, the beverage director at Upwards Projects, says he “can’t imagine another portfolio that could hit so many notes, especially within a value-driven perspective.” He adds that all of their wines are “honest wines, expressing an acute sense of place, and delivering a high pleasure factor. Whether Raventós from Conca del Riu Anoia, Larmandier in the Côtes des Blancs, or Nyetimber from Sussex, Valkyrie crushes it with their sparkling wine portfolio.”

Challenges Behind and Ahead

Valkyrie’s rise, while stratospheric, has not been without challenges.

“For years, banks wouldn’t lend us money, and that really hampered our growth,” Graf says. “Even though we had a wine label, we didn’t have a real vineyard to use for collateral until recently, when we bought a five-acre plot. We didn’t even have a tasting room at Banshee until 2013. Banks saw us as a virtual company, even though we had inventories and warehouses with $2 million worth of wine to point to, and a track record.”

With capital secured, a partnership with Whole Foods in place, and several dozen well-regarded wines in their portfolio, Graf and Ziegler see Valkyrie as another full-time job. In the past few years, they’ve hired about six salespeople and back-office staffers to keep up with and increase the demand, and they plan to hire a few more people down the line.

So what’s next?

“We’re in a defining moment as an industry,” Graf says. “There has been a generational shift in the importers and their approach. The older generation, like Kermit Lynch and Neal Rosenthal—they were really traveling the countryside and knocking on doors around France and Spain several decades ago. They laid the groundwork for wine as we know it here. Now importers like us, in our 30s and 40s, are tapped into the market in a different way. We make many of our decisions based on the relationships we have with sommeliers who tell us what they see happening, and established winemakers who can’t wait to tell us about the new kid on the block.”

What will be the next interesting wine region offering great wine at a reasonable price? Check with Valkyrie. Graf and Ziegler are securing a few promising new offerings right now.

Kathleen Willcox is a journalist who writes about food, wine, beer, and popular culture; her work has appeared in VinePair, Edible Capital District, Bust magazine, and Gastronomica, and on United Stations Radio Networks, among other venues. She recently coauthored, with Tessa Edick, “Hudson Valley Wine: A History of Taste & Terroir.” She lives in Saratoga Springs, New York.

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