Diamond Estates Wines & Spirits Ltd.

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Diamond Estates Wines & Spirits Ltd. is a consolidator in the Canadian beverage alcohol market. Starting in early 2000, Diamond acquired each of Boka Wines & Spirits Ltd. (a sales agency) and Birchwood Estate Wines and Lakeview Cellars Estate Winery Ltd. Founders Andrew Green and Murray Marshall had known each through youth baseball other for years, and the “diamond” in their company name relates to a baseball diamond. Diamond Estates has grown exponentially, becoming one of the top independent wines and spirits agencies in Canada, as well as a significant winery brand owner and producer.

The Canadian Business Journal spoke with Andrew Green, Vice-President and co-Founder of Diamond Estates about the company’s success and the business of wines and spirits. “We started by combining my agency background and Murray’s experience in domestic wines, because there were not that many companies at that time that did both, and the main idea was to grow our sales force.”

The company owns Niagara Peninsula wineries, Diamond Estates – The Winery (formerly 20 Bees Winery) and De Sousa Wine Cellars, producing some of Ontario’s finest red, white and rose table wines, sparkling wines, ice wine, and other dessert wines, and provides visitors with some of the most unique and enjoyable winery experiences in the fast-growing Niagara wine county. From the VQA wines to the intimate tour experience, Diamond Estates’ wineries have become popular with wine connoisseurs from around the world, connoisseurs who appreciate the bounty of the Niagara wine country.

As to the history of wine in Ontario, Green said, “The Canadian wine industry is fairly young — only about 30 years old, so the vines are getting older, and that continues to drive the quality of vines each year. The ice wine is what brought up the image of the Ontario wines, because it’s really only made in Germany and Canada. This is what started to drive the image of Canadian wines.”

Besides quality wine and wine county experience, the company focuses on building its own brands, as well as brands of its suppliers. Diamond
Estates Wines & Spirits Ltd. distributes and markets a wine and spirits, providing representation to compelling beverage alcohol brands in the Canadian market, delivering superior sales, marketing and distribution of wines and spirits to the LCBO and licensed establishments, and the company represents both imported wines and spirits as well as domestic brands throughout Canada.

Green described how the wine and spirit business works in Canada, where all alcoholic beverages are being sold and distributed through beverage alcohol monopolies, like the LCBO. “The LCBO rarely buys products directly from the producers, so there is a need for agents like us. The first challenge is to convince producers to work with us as their representative, and second convince the LCBO to carry the producers’ goods, because if LCBO does not carry it, there is really no other purchaser… So while we have to figure out what the LCBO wants, at the same time we have to seek out the producers able to produce what the LCBO is interested in carrying in their stores.”

According to Green, there are several corporate-owned agencies that are bigger than Diamond Estates focusing on the Canadian market, however, “Besides these, there is a group of about only six independent agents that are truly national, and Diamond Estates is one of those agencies,” says Green.

Diamond Estates offers LCBO a well balanced portfolio of wines and spirits, wines produced by its winery, and wines and spirits it represents in Canada, and most of these brands will be known to the readers from the shelves of their local LCBO store. Canadian brands such 20 Bees, Dan Aykroyd, De Sousa, Hat Trick, Lakeview Cellars, or Sundance, and from over 50 international brands, wines such as Fat Bastard, Antonin Rodet, Las Moras, Meffre, Casa Girelli, and many more. On the spirits side, Diamond Estates brings in a wide assortment of products, from vodka to whisky, and anything in between; products such as English Harbour Rum, Hpnotiq, Iceberg Vodka, Tito’s Handmade Vodka, Fireball Whiskey Shooter, Buffalo Trace Bourbon, Harmonie, Pama and Copa de Oro liqueur.

“While I would like to have more lower-end wines and spirits in our portfolio to continue to drive volumes, most of our products are mid-premium to premium quality. So we sell many premium items. In regards to product mix, we are about 60 per cent wine, and 40 per cent spirits,” says Green.

According to Green, the market and the consumption in Canada are both on the upswing, with the wine market growing by about four per cent, and the spirits market by about two per cent, while the overall consumption in Canada also continues to increase.

As to the future plans, Diamond Estates wants to increase its market share and raise money for business growth and increase its buying power, and so the company signed letter of intent to become a public company, with a plan to use the reverse merger strategy and merge with a TSX Venture Exchange listed company. While the company’s public offering is in works, the company remains cautious about publicizing information about any future plans at this point. “We have a good growing Canadian wine business and growing agency business, but we plan to continue the organic growth on the winery level, and if we have an opportunity to grow by acquisition to increase the capacity quicker, we might consider it, but that is not something we are contemplating at this point. The agency side does not really open itself to the growth through acquisition, it’s all about doing a good job for our existing partners,” says Green.

Diamond Estates has established itself in the Canadian market as a serious player, providing producers with solid product sales and marketing, and providing LCBO and the Canadian consumer with products for any occasion.

www.diamondestates.ca

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