Banking on Bordeaux

Three years ago at a Christmas party, Jim Francisco saw an old friend and the two started chatting about their mutual fondness for fine wines.

What a fortuitous conversation that turned out to be.

“He mentioned that his son, who happens to be an importer, was very disappointed with the distributors representing his wines in Ohio,” says Francisco, who was at that time director of practice management systems for National Data Corp. “My entrepreneurial light bulb went off, and I said I’d be very interested in talking with his son.”

Of course he would be, as a self-described “obsessed collector of wines for 20 years.” But during each of the four meetings that followed, his friend’s son tried to dissuade him, explaining that the business was highly competitive and one must work extremely hard — especially as a start-up — to move his wines in this state.

“His specialty is French wines, and Ohio retailers and restaurants lean toward California wines,” Francisco says. “But I was persistent and he finally invited me to visit his offices in Virginia to see how he runs his operation.”

After determining Francisco’s palate for wines through several blind tastings and acknowledging that his passion was a prerequisite to selling the product, he agreed to advise Francisco in launching a new venture — Euro Vin Importers Inc.

Francisco, as president and 100 percent owner, incorporated his company in May 1999, and during his first year of business, exceeded his projections with $276,000 in sales. He closed 2001 with $786,000 in gross revenue.

Currently, Francisco employs six people at his 3,500 square foot warehouse and office space at Enterprise Place, off Route 91 and Interstate 480 in Twinsburg.

As for his product, Francisco now carries more than 300 labels of French, Italian, Spanish, Australian, Chilean, New Zealand and Portuguese wines, and to compete with California wines, he’s bringing in product from the Pacific Northwest. More than 85 retail stores across Northeast Ohio feature Francisco’s wines, including local quality outlets such as West Point Market, Heinen’s grocery store chain and Mustard Seed Market.

Without the advice and guidance of his friend’s son, says Francisco, his success wouldn’t have come so soon.

“But if I didn’t have a passion for the product and what it represents, and if I weren’t so persistent,” Francisco says, “we wouldn’t be having this conversation.”

Uncorking growth

In laying the foundation for his business, one of the first major hurdles Francisco faced was one he didn’t expect: an unwieldy roll of red tape.

Between June and September 1999, he laid out his business plan projections and pro formas, putting to use his MBA and 18 years business experience — “everything from sales and marketing to general business management,” he says. After acquiring financing, he resigned from his full-time position in early October. But he couldn’t officially conduct business until the federal and state governments sanctioned his status as an importer and distributor of wine.

It only took about six weeks for the federal Bureau of Alcohol, Tobacco and Firearms to approve his application. But it took the state of Ohio from November until February — and the OK didn’t happen without Francisco’s intervention.

“Typically, the state government process takes about two months, but by mid-January, they still hadn’t approved me,” Francisco says. “Not only was I already paying rent on a space, I was scheduled for a wine tour of France in January. So, I started getting antsy and I called the Department of Commerce, which oversees Department of Liquor Control. I had my license three weeks later.”

Francisco thought the real fun would start with his 13-day tour covering 2,300 miles of winemaking regions in France — from Champagne, the Eaub and Alsace to Burgundy, Rhone, Languedoc, Bordeaux and the Loire. But the trip was grueling.

“There were 16 of us sharing two vans, it was cold and rainy the whole time, and half the group got sick with the flu — including me, ” he says. “But there’s nothing like actually visiting the locations of the places that you’re representing, and that did set the groundwork for the first set of wines I brought.”

Francisco sold his first order of French wine during the last week in February 2000. From then, he says, things got very busy.

“To build my business, it was a matter of getting out and meeting as many retailers as possible to introduce my product,” he says.

Initially, Francisco concentrated on retail settings and eventually ventured into on-premise settings, that is, restaurants. But getting the wine to the retailer was slowing him down.

“I was scrambling around, doing deliveries myself. So in August 2000, I hired someone full time to handle deliveries and warehousing,” he says. “That full-time person freed me up for sales, then I hired another salesperson and started expanding through the state to other market areas.”

That helped Francisco make another milestone.

“The growth started to occur, and in summer 2001, the business started to break even,” he says.

Now, he does in perhaps three days what he did in sales during his first two months in business. Still, he says he’s “dinky” compared to the fiver major players in the market. And he’s a wholesale distributor the customer never sees.

“We’re a middleman to the retailers, the retailers are the direct contact to the customer, and never the twain shall meet,” he laughs, explaining that state law is set up in a three-tired system in which you’re a wholesaler, a retailer or a supplier.

Message in a bottle

Every entrepreneur has a mission statement to coax the company’s success. Francisco says his commitment to his company and the quality of his product spirited his company’s growth.

“In the beginning, I decided my company strategy would be to represent the highest quality wines for the lowest cost,” he says. “I’ve got a vision for what a wine should be, from where it comes in the world to its flavor profile. So what I try to bring in are things that represent the greatest possible value.”

As key wholesaler for his company, Francisco works closely with his salespeople to ensure they possess all the necessary information to sell the wine

“Many of the wines have good quality ratings to them, and I provide them with ‘shelf-talkers,’ or information, to help the retailers sell the wine,” he says.

Francisco also eyeballs distribution, to keep delivery mistakes to a minimum. And as the owner of a small company, he juggles details from sales and order entry to invoicing, warehousing and delivery.

“I’m trying to make the transition in which I don’t have to be running back here to do all the administrative work,” he says. “Ultimately, I’d like somebody full time for that, but dollars just don’t support that yet.”

In the scheme of a five-year plan, Francisco initially envisioned reaching $3 million to $4 million in revenue. But growth in the higher-priced wines occurred before 2001; last year, people started spending between $10 and $15 per bottle and he’s had to adjust his expectations.

“Now it’s more reasonable to think I can do $2 million to $2.5 million,” he says.

Even in its short existence, says Francisco, Euro Vin is outgrowing its environment.

“My lease runs out at the end of this year and I’m already talking to the landlord about expansion and more floor space,” he says.

As Euro Vin grows on the vine, Francisco says he’ll monitor his cash flow but focus on the people aspect of the business.

“If you express that you’re committed to your customers and you follow that up with action, they are committed to you as well,” he says. “In this business, it’s very partnership-oriented, and I have clients who go out of their way to help me. In turn, I go out of my way for them.”

The toughest part of the business, he says, is educating his public about the products he represents.

“The most fulfilling thing to me,” he says, “is when people tell me they appreciate my palate in wine, the quality I’m presenting and the knowledge that I bring to them.”

But as much as he enjoys his business, Francisco says he’s consumed less wine since starting his company than he did before.

“I have to taste wine all the time, but I’m just looking for the flavor, so I have to discharge the wine after I taste it,” he says. “If you start swallowing everything, you can’t be coherent enough to know your wine. So if wine didn’t have alcohol, I’d like that even better.” How to reach: Euro Vin Importers Inc., (330) 963-4900

Eat, drink, and be savvy

Wine has been an integral part of European and Mediterranean cultures for more than 8,000 years, but most Americans are still uncertain about selecting the right wine when dining with friends or business associates.

“Like any food, wine is very personal. Some people like strongly flavored foods, while others enjoy more mild flavors,” says Francisco, who teaches a course in wine at the Hudson Community Education and Recreation Program. “Food and wine matching is mostly about the acid levels that are present in the wine, and every wine has some level of acidity.”

For example, full-bodied, deep, rich reds, like Cabernet Sauvignon, tend to have higher acid levels and fuller flavors that pair well with red meats and roasts. Lighter, lemon and grapefruit flavored wines pair better with shellfish and white fish.

In both instances, the acid levels present in the wines will either enhance or detract from the flavors of the food.

“I happen to favor European wines since the acid levels tend to be much higher, and therefore are better matches to most foods,” Francisco says.

Whatever your preference, eat, drink and be savvy, he says.

“Wine can enhance almost any meal, providing for pleasurable tasting and social enjoyment with friends and business associates.”