From Bankruptcy to Barefoot: A Journey Through Wine Industry Hard Knocks

I got $300,000 worth of wine and bottling services. How do you want it done? And he goes, wow, he says, nobody ever asked me what I wanted. You come in here, you ask me what I want. I'll tell you what I want. He says, take this down. So I'm writing. And he says, he says, give me a salt and pepper act. He says, make it better than Bob, cheaper than Bob, and put it in a pig. You got that? I'm writing it down, salt, pepper, Bob. I'm looking at it, I'm thinking what language is this. He says, can you do that? I said, yeah, I can do that. I had no idea. I know what you're talking about. Sit back and grab a glass. It's wine talks with all K. Hey, welcome to Wine Talks with Paul K, available on your favorite podcast, Hangout, Google Play, Ivesock, Radio, Pandora, and you name it. We're on the road today. We are up in the Appa Valley, Sonoma Valley. It's 105 degrees, and we are outside today, but it's beautiful, beautiful, wind blown through. But more importantly is the guest list today, and we are with Mike Hula-Hannand, Bonnie Harvey, who established the largest, isn't the largest wine brand in America? Is that what ended up happening? We built it to be one of the largest wine brands in America, and we had it in 28 states, but when we sold it to E&J Gallo, they made it the largest wine brand of all time. Amazing. In the world. Yeah, in the world. So this is Mike Hula-Hannand and Bonnie Harvey. Now, my first question is, how many podcasts have you guys been on lately? Since September, we've been on 75. Save it. And how many of these podcasts-- I'm setting you up by the way, just so you know-- how many of these podcasts are from a gentleman that Mike actually made a sales call on in 1989? Absolutely zero, Paul, except for this wine. Yeah, wait a minute. That's the first one in Australia, right? Yeah. So I want to talk about those days and what you thought you were doing, and then we're going to talk about the contemporary things that are happening at the Barefoot Spirit, which is a fascinating story as well. But I remember, and I had a small office in Lomita, California, just inside the beach cities of Torrance. I was upstairs in this rickety warehouse. The guy was selling, I think, nor Swiss dried cereal out of there, Swiss soups or things. And my dad had run out of the small part, and I get this call from a Michael Hand who has this idea of Barefoot sellers. Right. Do you remember this? Yes, I do. I do, Paul. I've been telling Bonnie all along. I said, I know this guy. I know this guy. So yes, I remember it was rickety. It was rickety. Tiny. And here they are. And they have this wine of the month club. And I don't know how old that was at the time. Well, we started 72. But what was different then? And we're going to talk about what happened in the world of wine because you saw it all. We used to be-- like, for instance, UPS would pull up, and you would hand right 15 on a page, boxes. You could throw 100 boxes on there, or 200. They never counted who cared. You just shipped it out of there. But you came to me with this idea. It's called Barefoot Sellers. Right. About how long had you been doing this already? Well, we started it three years. We started in '86. We actually had the concept in '85. And we put it in the bottle in '86. And in '87 and '88, we sold it mostly out of the Tasty Room at Davis-Binem winery. And we had a deal with him. And we had a few brokers around the country. But we hadn't really expanded. When you met me, we had two distributors in California, one in the north and one in the south. Really? Yeah. OK. Go back. You got to go back a little further. We started in '86. What were you thinking? Is the question in how did you guys meet? Well, OK. So Bonnie and I, why don't you tell the story, Bonnie? Sure, sure. So Michael and I had moved to Sonoma County independently. And we were both business consultants. But neither of us were really wine drinkers, strangely enough. I had clients in the wine industry and so did Michael, because that's the major business here. I had a great grower who hadn't been paid for his grapes in three years, I discovered. And so I sent my new boyfriend here, Mr. Michael Hula-Han, out to collect the funds, which were $300,000. So you're the strong man in this job? Well, you know what's like. He's the Muslim man. Like, did I marry the mob or what? Yeah, right. I just met this guy, and she's gotten me out collecting $300 large. OK, that's funny. Well-- That's a lot of money, though, back then, particularly for-- Oh, gosh. It's huge. It still is a lot of money. But yes, it was even more in 1985 when this took place. So Michael went to the winery. It was super-enwinery at the time. And they had, coincidentally, just declared bankruptcy that morning. Just filed for-- So there was no money to be paid to anybody. But Michael being the clever business man that he is-- Clever, clever. Clever. He was looking around for an opportunity. He was looking for some kind of resources, something that he could come home with. He had to bring home the bacon, right? So he saw that they had a bottling machine. He asked him if it worked, yet it works. And they had tanks that were full of wine. Cabernet, Sauvignon, and Sauvignon Blanc. So he was able to turn that $300,000 worth of debt that was owed to my client, the grape prer, into a trade at bulk wine and bottling services. So-- So it's saying "super-en," or saying "super-en"? "Souver-en." Oh, "super-en." Yeah. It was before it was shout-toe "super-en." It was just-- "Souver-en winery" at the time. The farmer was owed the money, or was it the "super-en" both? The farmer was owed the money, and the money worked for the farmer. I see, OK. She was doing-- Now you find this juice, and all this equipment. Well, I wind up getting a trade out of them, and I come home, and I'm thinking, well, it's better than a poke in the eye. And what we come up with-- Come on, boys. We learn the distribution system. We learn all the laws in the state. Yeah, sure. We get alcohol and beverage license. How hard could it be? Yeah, how long could that take? Right. So, Bonnie and I go to work. Let me just interrupt you for a moment. The grape grower, after we'd done all the research, developed the label, and gotten all the licenses for the grape grower, who was owed the money, he said, "You know, I'm a full-time winemaker, as well as a grape grower, and I can't take on another business." And we said, "Now, wait a minute. We've just spent five months putting all this together. And now you say you can't handle it." So, Michael quickly said, "Tell you what? We'll do it." The grape grower says, "I guess I'll just have to take the loss." And that was not acceptable to us. Yeah. So, we said-- You're going to wait a minute. Yeah. I thought we got ourselves into this already. Yeah. So, we took advantage of a $300,000 opportunity, and with no other money, and no knowledge of the industry, we jumped out there, and we decided we'd take it over. We'd pay him a hundred cents on the dollar, and we'd bottle it all up and sell it to a chain, and, you know, paying back how hard could that be? Yeah. How long could that take? That was plan A. Yeah, that was plan A. So, the name at that point, I kind of remembered that this-- the name was out there already, it had already been used somewhere. There's a story behind it. When we got started, we went to Don Brown, who was the buyer for Lucky Stores at the time, and then the California was quite a character. In fact, in our audiobook, it's played by-- Ed Asley. The Ed Asley. Really? And he's just as snarky as Don Brown was. So, Don, you know, I went into him, and I said, "Look, you know, I mean, I'm hatin' hand here, and I'm sayin'. How do you want it, Don?" And he goes, "Wow." He says, "Nobody ever asked me what I wanted. Everybody comes in here, you know. They've got their logo design. They've got their name. You know, they've got their prices. They're giving me benefits. They're giving me features, you know. They've got pricing programs. You come in here. You ask me what I want. I'll tell you what I want." He says, "Take this down." So, I'm writing. He says, "Give me a salt and pepper act." He says, "Make it better than Bob, cheaper than Bob, and put it in a pit." You got that? And I'm writing it down, salt, pepper, Bob. I'm lookin' at it. I'm thinking what language is this? Sounds like an actual bar. And I'm curious. So, I, he says, "Can you do that?" I said, "Yeah, I can do that." I had no idea what to talk about. So, I went to my friend who'd been in the industry. He's a couple of generations. And I said, "Tell me something." I said, "What's a salt and pepper act?" He says, "Oh, he says, that's like Cabernet Sauvignon, you know, a pepper and salt like Sauvignon Blanc." I said, "Oh, that's interesting." A red and white. You know, red and white, for right under the same. 30 years, I've never heard that comment. You got to get beyond the warehouse. This is the way they talk up in the buyer's office. I see. And so. So, that's the salt and pepper. I said, so, so, so tell me. I said, "Who's Bob anyway?" He said, "Oh Bob, you know, that's like Robert Mondeauvi, you know Bob Red Bob White." I said, "Oh Robert Mondeauvi, make it cheaper than Robert and better." And better. I said, "That's a tall order." I said, "Pretty tell me one last thing." I said, "What is a pig?" He says, "Oh a pig." He says, "That's the big fat bottle of wine. That's the 1.5 Magnum. That's not the 750 that everybody thinks of as a fifth." Wow. It's twice the size. I said, "Oh, I get it salt and pepper act, better than Bob, cheaper than Bob and put it in a pig." That's where this buyer had room on his shelf. So he had 1.5's of an inexpensive wine, and he didn't care what he called it. No. Well, he did. He said, "The name has to be the same as the logo, the image." Really? He had that opinion about it. Well, he said, "Make it in plain English. I don't want any French. Don't give me any shout toes." And he started getting a little upset about that. He said, "No bridges, no hills. No ridges, no." I've got enough of those. He says, "I got enough of those." Yeah. He says, "Oh, and make it visible from four feet away so she can see it while she's pushing her cart down the aisle." And I thought, "This is one merchandise of this guy." In 37 seconds, this guy's giving me the equivalent of a master's degree in wine merchandise. Totally. And I mean, he's been in the business for about 25 years at this point. This is one of the guys who put together a bottle barn. That was his business point. I remember that. Yeah. So, I had a lot of respect for Don, even though he was rather snarky and cranky. But he was giving me the straight skinny. And so we went back and we were thinking, now, the name, the same as the logo. And then we thought, you know, Davis Pineham used to have a wine years ago called Barefoot Pineham. A screwdriver, he sold it to the hippies back in Berkeley days. I said, "I wonder if he would part with that." So we went to Davis and-- He hadn't produced it in 12 years. Yeah. And he says, "I want a big number for that." You know, I said, "But Davis, I said, "It's sitting there. You haven't used it in 12." He goes, "It's worth it because you want it." And so I said, "Okay, I'll tell you what. We'll buy it from you, but you know, I don't have any money. So, you know, we'll have to work it out some way. So we figured out a way to work it out." And that's how Barefoot gets started. And that's where the label comes from. Well, that's the story. Yeah. I remember Barefoot buying them. Now, it might have predated me as a functional thing, but I was working my dad's store in the '70s, you know, through '82. So-- Yeah, '72. I remember that brand. So now it connects. This is really fascinating. All right. So you got a bunch of juice. You know how to bottle it. You have a-- you think you came up with a name and an image. You haven't sold anything yet. No. No. So one of the deals that I cut with Davis was that I could pay him by paying him a dollar a case for every case that sold through his tasting room. And I would sell it to him so he was making like 50% margin, you know. And he started selling it. And he sold it so well that after about a year and a half, you know, he decided to GC it out of the tasting room. And that forced us to get serious about distribution. So how long it take to go through that first bunch of, you know, where they 50 hundred gallon tanks? Or, I mean, how much did you have? Well, we got 18,000 cases worth. Oh, wow. That's-- We started-- We started-- We started off as the medium sized winery. Yeah, yeah. Like everybody does, right? We get right. But the irony of it is is when you're selling wine for $4.99, $5.99, you better sell 18,000 cases just to keep the lights on because the cost of the glass and the foils and the corks is the same for a $90 bottle of wine as it is for a $5 bottle of wine. That's true. David's buying him used to say, "Yeah, we're losing money on every case, but we're making it up and falling." Yeah. Well, I know that. Yeah. Yeah. That's a good business lesson for sure. He said, he said, you know, he said, any fool can go into the wine business, but they have to be a tireless fool. Yes. Well, I'm going to tell you my impressions. This is-- Especially seeing you guys on the different podcasts you've been on in the YouTube's. And I-- I was told to Sandra. I said, he came in and he was enthusiastic. Maybe that's not the right word. Maybe it was aggressive. What's the word I'm looking for? But you came up more convinced-- You were convinced you had this product. And I don't remember you since it was '89, you know, where you were in the sales volume. I had never heard of it at that point. But this idea for you was going to be-- this was a serious idea. I didn't know if you were still trying to figure it out at that point like three years into this. Well, we were very sure that we had discovered a market that was unrecognized, unattended. You see, in 1986, 75% of the wine in California was purchased by women. Not men, but 100% of the wine buyers were men. And the men were interested in the vintage date, the appellation, you know, the pedigree and the heritage of the wine. The women were interested in consistent flavor. They wanted a Tuesday night wine that didn't taste funny next year. And they wanted it to be on the shelf when they came back to buy it a second. That's important. I think that's the thing. I think the thing is, you know, the way you're going to buy it, you know, is that you're going to buy it a second. You're going to buy it a second. I think that's a good idea. The best thing about this is that you have to have a good idea. The best thing about this is that juggling, payables, and receivables. And believe me, that was challenging. - Yeah, receivable. - Is this business? - Yeah, okay. - I was also on the bottling line. I had to learn everything about glass, corks, foils, labels. And then I had to make sure that the right product, the right supplies came in for the right varietal on bottling day. Big surprise to find out that, you know, it was the wrong labels. Yeah, because of clear glasses that have all agreed deadly great - Exactly. - So I discovered that they were different sized bottles and different shapes and different colors. - This is a shocking. - Wow. And I discovered that you had to coach the paper on the label for this particular bottle - While they were on. - Sheen because it was a wet line. Oh, you find out what happens if you don't coat your label on a wet line real quick. Boy, I had a huge amount of lessons to learn, yes. - So that's fast-forward to look. This is, those lessons are invaluable and they can be very expensive. So now you've got the brand. When did you think that maybe there was some traction in this idea? - Well, we really thought it was gonna sell like hot cakes before it ever went in the bottle. When we were still thinking about the label, I came up with what the label looks like one night. And I knew it was gonna be a very big seller, a very hot seller immediately. - Just like that was, that was it. - So let me filter that question. When did sales look like? - That's a good idea. - You're looking for proof, are you? - Wait a minute. - Wait a minute. - When you woke up one morning, you looked at each other, wait a minute. This is like, maybe we have something. - Okay, I think it was because I was in Los Angeles and I was out there in the Pasadena area. And the salesperson I was with said, there's a wacky person out here that I want you to meet. He's got a little shop. Everybody thinks he's crazy. He calls the manager a captain. He calls the clerk's mates. He's got nets on the wall. He's got, you know, Baluga, whatever from Russia. - Hawaiian shirts. - Hawaiian shirts. I said, really, I said, that sounds like a lot of fun. He said, yeah, he says, your wacky label is perfect for him. So we went in there and we made the presentation to him. And he agreed to buy it and put it in two of his stores. He was building his third store. That was Trader Joe's. - Joe Cologne. - And so here we are. - Was it Bob Bernie? You were talking about Bob Bernie's. - Yeah, wow. - And so Bob takes barefoot. And he laughs it out with Trader Joe's all over the country. - As they grew. So there's people who live in places like Des Moines, Iowa. Hey, honey, let's go down to the mall. They're opening a Trader Joe's. We'll see what they're doing in California, you know, and the world is coming to us right here. So we would have big stacks, you know, in the Des Moines Trader Joe's. - That's phenomenal. - Yeah. And so that's how we led out into the United States was by having a strategic alliance with another wacky person. - Well, Bob was not an easy buyer. He was a great guy, he passed away years ago, as you know. - Oh yeah. - His daughter, Christina Calaritas, is still selling to Trader Joe's. I did not know that that's what happened. So that's what they had to be the trigger for. - When that happened, we said, okay. - Like, wow. I mean, we were faced with an awesome reality, which is, wow, if Trader Joe's is gonna be in Des Moines, Iowa, who's gonna go into the stores, who's gonna check the pricing, who's gonna make sure it's on the shelf, who's gonna pick up the spoils, and who's gonna be there, you know, to police it. And you know, how are we gonna get people into the Des Moines, Iowa store to buy those products? And what other stores are in Des Moines, Iowa, that we could sell? And so that led to Kroger's. - Another huge installation. - Exactly. So here we are, and Kroger's, Kroger's goes like this. All right, we're gonna authorize you guys for five states, and we're gonna put you on sale for $5.99. Can you meet that price in all five states? We said, yes, of course. Of course you can. Then we go find out what the taxes are in the five states, and in some of those states, - Aspercation. - We're losing a dollar of bottles. - Oh, no. - Yeah. (laughing) But it sounded good when he asked to get asked the question, because Santa here's a charge of all the excise taxes now. - Well, you know exactly what I'm talking about. - And it's ridiculous, right? - Oh yeah. Well, the cost of doing business, I would say the biggest mistake that people make is they understand the cost of goods, but they don't understand the cost of sales, because the cost of sales are different in every state. And for instance, if you do business in South Carolina, your cost of sales are way less than if you did business in New York. Way less like half. - Way less. - So we wound up expanding barefoot in the South Eastern United States first. - So you had to find a distributor? - Found distributors down there. - 'Cause how did Bob do it to those stores? Did he ship it himself? - No, no. He bought it through distributors in those states. - I see, okay. - So at that point, you've got sort of a distributor and that we're going on and you're sort of - Sorting it out. - And it feels like. - Yeah. - If you sold through those first 18 days, in case it's 1,000 cases yet. - We sold through it. Yeah. We sold through it in the first year. - Less than a year. - Less than a year. And we did it with Mama Poppas, mostly in San Francisco and in Santa Barbara, we went to Santa Barbara because, you know, I had gone to college down there and I knew that it was a recreational beach town and I knew that Los Angeles people went there and we thought, well, they could, you know, play on the beach and discover barefoot on the beach and then they would take a taste for it back to LA and when we introduced it in LA, they would know it. And so that was the strategy. - Yeah. - 'Cause you had the socks there? 'Cause I think you walked in with socks or something or some kind of, you know, sales things. - We had a holiday, a back card, yeah, that was a stalking with the foot coming out of it. Yes. - Not for your socks off. We had it in the store at some point. - Yeah. - So we had the socks. - I always got a good memory. I was forgot about the socks. - I want to spend some time on the barefoot spirit. So, but this, I had to uncover the wine part just 'cause we had history together, sort of speaking. Now that I know that you had Bob Burnan your side and you and I were good friends when he was alive. So I just found that, I find that really fascinating. And this is a very difficult business. It's no, it's no easier today. It's probably even harder. - Hard to say, yeah. - With the types of things that you can do and I can't imagine what's gonna happen to the winery business during COVID here 'cause so many people are gonna find themselves with no cash. And maybe, you know, maybe there's a, hey, wait a minute. Maybe there's a $300,000 debt on some juice out there but yeah. - You started the sole project over again. - No, no, no. - So, once is enough. - Did you decide at some point that this was too big, too hard, too busy that you sought gallows involvement or this, that kind of happened on its own? - Well, the profit margin was so low in the first place that we knew that we had to bottle and sell 500,000 cases a year in order to get the attention of a buyer. - Yes, it's just way ahead. - No profit until you've got that volume there. So, we admired Gallo because they had merchandisers out there that were working their tails off in the stores and their products were selling faster and had more shelf space than anybody else. So, we were watching what they were doing from the beginning and trying to copy them by putting our own sales people out there in the stores to merchandise the shelves 'cause we found out pretty quickly, the bottle that wouldn't sell was the one that never made it to the shelves. - Yeah, huh. - Yeah. And our biggest problem was being a fast seller because when we were, we'd empty the shelf. And then again, you can't sell if there's no product there. We had to have our sales people in the stores, like Gallo did, to be replacing the product. - Basically, merchandisers who are, who are fronting the merchandise, which is my job at the liquor store. - Exactly, you know, so, Bunny and I, we were outsiders as we say. So, we're learning every day. And so, when we see how Gallo is operating, we say, "Oh, there's a lesson." Now, people in the industry would kind of reject that idea. They'd say, "Oh, no, the distributor's gonna take care "of that, don't worry." - The retailer will take care of it. - Don't worry. - And the retailer will take care of it, they would say. - We worried. (laughing) - Yeah, we, we, 'cause we had 500,000 keys to the sale. - We used to give a course up at UC Davis and it was called, "Don't be the wine maker "from the bankrupt winery, they'll blame you." And we gave it at the OIV, which is the organization, international, viticultural, - Wow. - French, or international organization. We have about 150 people. - It was four wine makers. - Yeah, in the class. And so, we come in there and, and we tell them about wine merchandising. Now, if you ask a wine maker, what the label should look like, they'll step right up to the plate and tell you. - Yeah, sure. - See, but they have never really dealt with merchandising. And will it be visible from four feet away? And will it stand out from the other 1,000 labels? So, that's the kind of stuff you learn hard knocks. Like you make friends with, with the people that have dirt under their fingernails. We say make friends with people in low places, we mean that people that stock the shelf. - Sure. - People doing the work. - People doing the actual work, truck drivers, forklift operators. They were telling us stuff that was real insightful. And we were going, oh yeah, you know, that's right. But Gallo, what they were showing us was, "He who merchandise his wins." - Well, that's what I think they're, guerrilla marketing was known for was bumping, I think. 'Cause I was the other day, I was in the market. She's like, "Oh, yeah." like, what are you doing? And so I took my phone, I put it on selfie mode, and I'm looking over my shoulder, I'm telling my customers, look, the reason these wines are at eye height is because of the merchandising. They're, it's like salad dressing and toothpaste, you're not gonna get in the way of proctering gamble, trying to sell crest, right? So there's a reason why all of a sudden, Snoop Dogg's, you know, criminal wine is right of your eye. He's not in the wine business, who cares what Snoop Dogg drinks, but he's got the best next to a Pothic Red. It doesn't happen by accident, right? You learn this part. - Oh yeah. - So you're out there now trying to, like you're colliding with Galloway almost in the sense of you're trying to-- - But with a great deal of respect, I remember this is a true story. I was up in Minnesota, and I was in a store up there, I think it's called MGM, and it was in St. Paul. And there was this guy in a suit and tie, he was walking down the aisle, and he had two other guys walking with him, and they were in suits and ties, and I saw him, and he was pointing things out, and going like this with his finger, and he was very concerned about, you know, what was next to the products that he was selling and whatnot, and I could see that they were Galloway products, but I didn't know who it was. - He was asking a lot of questions. - About two weeks later, I'm in Tallahassee, Florida, in a public's store down there, and I'm pricing items, right? Taking my own wine out of the box, I'm the president and CEO of this company, and you can throw in Chairman. - Yes, I'm a man, I'm a man, I'm a merchandiser. - I'm merchandising, you know, I'm pricing items, right? So I'm pricing my own items, 'cause I know if I don't price them, and won't get in the shelf, they don't get in the shelf, they don't sell. They don't sell, it's scandhas and show. They don't sell us and show that-- - That's how you get to see-- - You're out of there. So I see the same guy walking down the aisle, and so I say to the salesman that I was, I said, "Who is that guy anywhere?" I think I just saw him up in Minnesota a couple weeks ago. - Wow. - He goes, "Oh, that's Joe Gallow." I said, "You gotta be kidding me, not the Joe Gallow." He says, "Yeah." He says, "He likes to get information on the street. He likes to stay on top of the market." - Wow. (sighs) - I went home and I said, "Bonnie, you know, all this work we're doing out in the marketplace, I guess we're not crazy, you know, because I just saw Joe doing this." And Bonnie says, "What part of this don't you think is crazy?" (laughs) - You guys are both crazy. - You're both crazy. - That is really fascinating. So a model that you adopted, that you're starting to adopt, and then the Joe approach, Gallow is saying, "Look, we're out there on the street together. We're competing for the shelf space. I've got this brand, or in however many states you're in. Are you interested in us?" - We went to a broker. - You never go to the buyer directly. - No, you went to a broker. - Absolutely. - Maybe had connections with Gallow prior? - Well, they had sold in a product that they are a business that they were happy with. Yes. - So they already had a good relationship. - Yeah, that's important. - But fast backwards, long before that, we placed our item in several distributors across the United States, where they were selling. - Where they were the primary product. - And we really pressed the pedal to the metal in those distributors. - Oh, yeah, yeah. - So the distributors sales people would say to their reps, "Look, this barefoot is really selling. You gotta check this out." - They sort of a grassroots response to Gallow's hearing about you guys through non-normal channels, not through a broker. - That's right, back channels. - Right. - You know, hallway, water cools. - But you know, we couldn't have sold to a better company. I mean, they are family owned. They're five-year plan. I mean, I know the industry has some issues, but their five-year plan lasts five years. You know, you go to these publicly traded wine companies, their five-year plan is three months long. - Who knows? - You know, the industry's rife with all kinds of craziness right now. And we'll just left, we'll be the exact opposite of what barefoot might've been at the time. We just left Trumbetta and Nice Family, just up the road here. - Oh, yeah, the Trumbetta. - She makes a beautiful PN the Wars, they make 12-hour cases. And it's a similar conversation in that what's happening today in the marketplace is very difficult to understand. There's a billion labels now. Your idea, which I love this concept center, but like you'll see it from four feet away, but it's a tough place right now. So after you sold, because we don't need those details are important. You created this, I mean, the persistence and let's use the book, the hardship, the hustle and the heart to do that is a marketable product in itself. You had to say, all right, I'm gonna focus on this thing and really explain this, and I'm gonna say it this way, the position you took when you called on me is in this book. Because I remembered this, telling my dad, 'cause he was still hanging around now and he's still alive, he was working with me. I said, "This guy came in today and he wanted to sail." And I hadn't seen that before. And you were anxious to get going, to get working. Look at this idea, what are we doing? And that's what this book's about, I think. - That's the spirit. - Yeah. - Yeah. - Yes. - And so for, it's a business book. - It is a business book, but it's kind of an expose of the bottles of the wine industry. It's an outsider's inside view of the wine industry. So the average person can really pick up on what's involved. I mean, you see those 18 wheelers going down the freeway and you don't realize that inside of it could be 22 pallets, five layers high, each one of them with 56 cases of 750s, 12 to a box, on its way to a Ralph's store or, you know, Kroger's or a public store. And so you go, "Oh my God, you know, this is commerce, right?" And just to get to that scale. - So what the book is about, I guess, Bonnie, why don't you tell him how we got into writing the book and what promoted us to write the book? - We wrote the book after we had sold the business and our staff and people that we'd done business with, they were coming to us independently, many of them and saying, "Your business philosophies, the way you ran the business and the way you promoted the product were so unique that you've really got to tell other people about it." We had no turnover for the last five years of our business. - Really? That's a lot. - Building that kind of loyalty and team players, you know, that spirit, team spirit that these people had, we had to share it, we couldn't just keep it within ourselves. There's so many people out there starting businesses and we all start with popularly held misconceptions. And there's a lot of those in the book. The book is all story form. So we give people the lessons we learned as we learned them. Not here's the lesson, but you pull out the lesson from the story that we tell you. - That's an interesting approach. - People learn better, they're more interested in learning because it's in story form. Now we've been telling stories since, you know, the caveman days, right? That's how people learn. - It's about the story anyway, right? - It's about the story. - This industry, and I've said this a few times with on this podcast, it's changed considerably. And I'm up against, in the retail side of things, one year old per liter wines coming in 20,000 gallon tetra tank containers, driving up New Jersey's coast in the New York, getting bottled into a bunch of brands, getting shipped out on a group on for three bucks a bottle. And it's bad, it's just not good wine. And it's not an experience that I think wine drinkers would say. Like, oh, I got this for three bucks. Does it make a rate? No, it's bad, right? - Not right. - Or the other day I tasted some wine. And I just said this to the Trombetta family with a blogger called Cunstring.com. It's a very famous, just still in wine spirit site. And she did a story on us. She sat with me and tasted it. And I tasted this bogeylaes. She was, this is really bad. I said, yeah, and it came from one of my competitors. They sent me samples. Imagine that a competitor sending another competitor samples to taste to sell. What's this world come to, right? So I tasted it with issues. This is really bad. I said, yeah, it's, it guess what it is? It's saturday and alive, bogeylae, named after the TV show. - Oh yeah. - Is that, now so what kind of experience is that for a buyer to say, oh, I got this saturday and alive and they put it in front of their friends and they open it and it's bad, right? This is a story to tell. The barefoot story is a story. The inspiration you guys must be putting on the street with this book, having this conversation today, to get people to think outside the box a little bit. - Yeah. - To understand that it doesn't just get handed to you. - Amen. - You know, you have to. - You know, it's hard work, but it's doable. And I think what scares a lot of people is, they don't know what the process is. They don't know what's foot to put in front of the other one. This book really lays out a process. Yes, it's in the wine business, but it's a very fungible process that can be applied to any business. And the thinking and the reasoning and the spirit is the same. You know, since we wrote the book, Bonnie and I become speakers. We spoke all over the world. We've been in Tronheim, Norway. We've had the-- students from Nanyang University in Singapore all over the United States, probably 60 schools in the United States, they all teach entrepreneurship. They all got barefoot in their fridge. So the brand has, you know, opened the door for us. There's no question. Thanks to E and J. But here we are talking about entrepreneurship. And the questions they always ask is, you know, just tell me two things. Number one, how do you keep going when you run into that wall? And the other one is, what's the other one? How do you prepare for the unexpected? That's it. Oh, great. They're for the unexpected. What a question. So those are the two most popular questions. And the answer is the same. You prepare for the unexpected and you handle the walls by actually having a mental attitude about mistakes by having a mental attitude about your customer, about your employees, about your vendors. You know, we have a talk we give called, you know, how soft skills earn hard cash. And we've forgotten soft skills. We've got so carried away with technology in the last 25 years that we forgot that if you treat your vendor right, he's liable to give you $300,000 up front with no interest for four months. Yeah, all right. And he's liable to warehouse it for you for free just because he likes you and wants to do business with you. So you think that the, I think this, particularly with texting. And I just, I had a little gym. I used to lease it to young men that wanted to get their little sort of personal training business going. Okay. And I consulted many of them. What they couldn't understand was texting was not a methodology of doing business. I still don't believe it is because you can't have this conversation. You can't see my face. You can't see my sincerity in the business we're doing. Right. You would just get this raw text. Right. And it can be misinterpreted so many ways that the value of the content is gone. And I said in their millennials, no, it's absolutely Mr. Calum carrying away to do business. I don't know the reason is because they want to believe that it is because it does provide them with the screen. They don't have to take a person or rejection. It's a good point. It just goes out. Yeah. And so the thing with texting is it sets up this layer of separation between you and the person that you're communicating with. Right. You know, so there's, there's no, there's, you don't have any real skin in the game. But now if you were to physically go talk to that person, you're showing up. Right. You're not doing anything else. Right. You're giving them your undivided attention. That's it. Boy, that's the number one thing that people want. You're demonstrating sincerity. And that's the key. Yeah. This is a charity in the administration of sincerity is the key to reducing your costs in business. What you see Silicon Valley has an answer for that. Barrow more. Yeah. You know, just go into further debt or give up more, you know, equity in your company. So I owe my business failed because I didn't get funded or my business failed because my second round of financing didn't go through. Well, I'm sorry. That's true. When you ever, you know, resourceful. When did you think? You know, it's funny. You said that because this is my side of the Internet side of sales, wink, naked wines, even wine.com just went to the street for $50 million. They had already gotten $35 million from Goldman Sachs. I'm like, why? They do the big numbers. And I'm sort of the funny irony of this conversation is, you know, there's a commercial in the radio about, well, two guys started business same time. One still has a, you know, his little business. The other one built a career and moved on. And the bottom up club is still this small business. And that's what I did. And Mike called on me. And I, he built this big business. But, but the point is, I've never borrowed a penny. Okay. And we have been less profitable in some years than others, but we've never leaned on that. And there's companies like wink that have borrowed, have gained $75, $85 million and just turned a profit for the first time, like in 15 years. And so I look at that saying, gee, we're pretty good, you know, in that regard, because I think this lesson that you're talking about here, the sincerity of the humility, we take care of our vendors. We, if I shake somebody's hand on a deal, that's the deal. Except for the small claims courts, I have, Thursday morning. But that was because they defrauded me. But besides that, it, those lessons can't be learned via email and text and a distant relationship. They have to learn the way you did it, which is show up, front the merchandise, talk to the people you're trying to sell to and make those deals and live by the ones that you shook your hand. You probably made some bad deals and there's, oh yeah. Oh yeah. And, but you live through it and you live by the handshake. There's a scene in the book where the Michael Hullahan character walks in to John Brown's office who's the buyer for Lucky Stores in California, you know, with like hundreds of stores. And he's got a check in his hand for $5,000 and he lays it down on Don's. Michael Hullahan has the check and he gives it to Don. Yeah, lays it down on Don's desk and Don says, what the hell is that for? I said, we screwed up. We put the 750 labels on the 1.5. You've been scanning them at half price. We did the math. We figured out how much you've lost. Wow. We 5,000 will cover not only your losses, but it will cover, you know, your wear and tear in handling. Our truck is going around to the stores right now and exchanging them all out. And he goes, you did the right thing. He says, who's a charge of labeling them? Then he says, he says, next week you're on the ad with mandatory mandatory stacks. You know what a mandatory stack is? That's when the buyer of the chain says, listen, manager, I'm telling you that you must put a stack of 20 cases of this product on the floor. You don't get to decide it's mandatory. Oh, so this local, the local store manager doesn't get a chance to decide that. No, he doesn't. But you know, that's amazing. Yeah. So then you get 200 stores times 20 cases. That's amazing. Tell me then this story. This is the written form story. There's a podcast of it. There's an audio of it. Audio book. Yes. Yeah. So Bonnie, tell them why we decided to do the audio book. Well, we were going into a university speaking to the students about entrepreneurship and conventions and such. Everybody was wearing their earbuds. Just four years ago. And so we found out that they were listening to podcasts. They were listening to some kind of self-improvement tape. And they said they really liked it because they could walk around and do other things while they were getting this education. And we said, well, our book is extremely educational. And we really want to get the word out to more people. So they don't have to suffer the way we did. Really, if they're going to start a business. So that's when we decided to make it into an audio book. And we have some connections in the Hollywood and you see Irvine and we went down there and met Sherwood players, which is a actors troop. And we worked with them. And they produced a fabulous audio book version of the Barefoot Spirit. Actually, the audio book producers of America Association gave Barefoot Spirit audio book one of the top five business books of 2020. Wow, that's fascinating. Yes, particularly because it was self-published. And that is their business. Their audio book publishes. Yes. I just want to add to that. So I want to add to that and say, this book is not read to you like most business audio books. This book is performed for you. So it's kind of like a 1945 radio show that you're listening to. It has sound effects, it has music, it has characters. What a brilliant idea. Scenes are like two minutes to four minutes. And so then there's like 10 scenes and a segment. Segment is 25 minutes. And so you know, you can binge and listen to the whole book. You know, if you're going to if you're going to drive to Seattle or that's a project. Yeah, it took us over a year. I mean, we got to work with actors and, you know, Hollywood. I mean, they say we got three things in California. We got wine. We got software and we got Hollywood. Yeah. So we put them all together. So, you know, the entire book's there. Yes. Yes. And is it word for word? Is this a script basically or is this script? It's been converted. So instead of a screenplay very much the same very close. There were dialogues, such as he said she said those things were dropped. But no, it is the full story of the barefoot spirit and how we grew the brand. And if we bring in my controller, if we bring in 50 copies, I should come up here, sign them for me for my clients. Absolutely. Because we just did that with Rex Pickett and the sideways movie book. Sold a bunch of those. And then we George Taber with the judgement of Paris book. I'd love to do it with this. We'd be, we'd be honored to for the customers to to cap that because part of this podcast and we're getting on an hour here so I'm gonna take too much of your time but part of this podcast is sort of to do what you're talking about and that's not expose the wine business but have people understand what it's about because making it doable. Yeah there's so much movement about organic and body and having people are confused and I want them to understand what happens a little bit behind the scenes how we negotiate and yesterday you'll find this fascinating I had a conversation with Alex Alexander Remi from Atlas wine and he actually publishes on his website he takes a bottle of shard and a and he draws line across it and he says this is what it cost me to to bottle in ink here. Yeah this is what it cost for the juice inside this is what the margin is for the distributor delivering it to the store you're going to and here's the retail margin and that's what the price comes up and he's been very transparent about that and I'm wondering what I'm wondering if that's not something of the future but with the way business is going in a so the digital track is fast, everybody's online to move and stuff is the transparency of the costs, something you think might be interesting to the consumer or are we sort of dipping our toe into an area of probably shouldn't be doing. You know I think that's a good question. I think yeah it's a great question because I think that people are looking for sincerity these days especially since the COVID crisis they want to buy real things from real people that stand for real you know what do you really stand for you got a great bottle of wine but where do you stand on pollution you know where do you stand on how you treat your workers right where do you stand on women you know where do you stand on all these different issues that are the issues of today at the environment right so I think that it's not just here's my cost of goods and here's how little I make it's also because the wine business is what I stand for if you buy a bottle of wine for me your money is going to a cause that you can identify with I think that's the future not just of the wine business but of all consumer products. I think that's a that's a great answer because that's true you're seeing it more and more and when he showed me in the wine said like wow you know you're really treading water in the wine business for doing that because no one does it and he's like yeah I don't you know I don't mind being controversial about either I'll I'll tell you I mean we know the margins suck but our daughter came back from was it high school she did a McDonald's report and she said those people are making a profit yeah yeah that's like well wait a minute you know this how she live in is because you know we make a profit so I don't think that's evil in itself but I think you're right I think it's about the humility of the product and what you're prepared how you what you're standing for like the sustainable movement all that stuff. Yes that's why we're so excited about producing an audiobook for other founders we want to help them tell their stories everybody's got a story to tell. Well we have a great story so we're worrying that time. Yeah we're offering the service that we used to produce the audiobook of the barefoot spirit to other founders so they can tell their stories. That's interesting. They're legacy keep engagement of their employees. So production value soup the nuts as far as what you're offering just the know how or the actors and the recording and we have we have the actors we have the producer and it can all be done at a distance with these. The whole thing can be done remotely. Now with COVID yes it can all be done remotely. So here's what I did. My dad started 19's he's a pharmacist by trade he had 70s bought and sold 12 pharmacies. The last pharmacy bought in 1969 he insisted he buy the liquor store and then he started the club out of liquor store in 1972 with Fast Forward. I mean Jim Barrett was our neighbor. We used to come to the store all the time. Patrick Patricia Gallagher who was part of the the state judge with the Paris came in the store. Bruce Nyer was in the store. David Starr was in the store all these famous guys. So I've been taking this story. How do I differentiate the wine of the month club from all these other services. Right. This is our story. We started the industry which I may on self not mean anything but the premise of what the wine of club does which is I still taste everything that sold. So every Tuesday since 1988 since you came to my office I tasted wine probably a hundred thousand wines. So to me that's a story in the history of my father and the judgment of the person. So I'm trying to write a book and she's been she's been saying look why we're going to spend money on a book when you can tell the story other ways and I'm like put the book. It's an interesting book. It's a business book. It's a wine book. It's a it's a immigration. My dad was an immigrant from Cairo came here with nothing you know sort of speak. So I think this is a good story. Well I think stories about businesses are interesting to this new generation. You know a lot of them are unemployed right now and they're considering going into business. So there's a big uptick in entrepreneurial education and all kinds of books that have to do with business. And that's why we're excited about the Barefoot Spirit audio book because it's an opportunity to basically teach some business principles. You know if you if you talk to successful business people long enough you begin to notice that there are these universal values. Yes. You know there's universal truth the same guy you know or a different guy is saying the same thing as the last guy. But in a different way you know maybe in a different vertical a different industry but it's the same message. And so that's why I think that anything you can do like Bonnie says you leave it it's your legacy. See it is. So you don't have to be here once it's written. Right. And that's actually helps you sleep better at night. But getting the best author we interviewed for some time to get Rick Kishman and he worked for the Sacramento Bee for well over a decade being the food and wine writer. And so he knew about wine. He'd written a book and I picked up his book on a flight that we had and I started reading it and I was just in the introduction and I cracked up and Michael's looking at me because I'm laughing too loud in the airplane right. And I said this is our author that's it you know he's got humor he's got you know love and caring for other people he's got so many of the qualities just in the introduction I read that we had when we were starting barefoot and that we hope that we continued to show in the product barefoot wines. And I said this is our author I've got it. But we'd written a book before that Michael had worked with an author and I'd given up on her. Michael went ahead and finished it up and then we threw the whole thing right in the garbage can. It was terrible. So the person that you use the author you've really got to resonate with them they've got to understand your subject matter and they've got to understand your personality and what points you want to get across and who your audience is. That's the key. We lucked out when we found Rick Kishman because he's excellent that's why the book is a New York Times bestseller. There's a book out too it just for your own sake is a very interesting book called Tangled Vines written by Frances DeConspeel it's also a New York Times bestseller but it's the history of wine starting in Grancho Cucamanga in the 1700s but it's really about the title is what Arsene theft and murder on the wine business. So it's sort of this sort of dark side of the wine business but it's fascinating story. I talked to her about writing the book she wasn't interested. A gentleman named Patrick Q who was the LA Times magazine food writer forever and we know him well really good writer and he's just like I don't have time to write a book right now. He wrote the book called The Last Days of Oat Quasine which is about the New York food French food scene. So I'm fascinated by the story and I I have to wrap this up because I don't want you guys to stick around too long. We'll have to do it again because I think there's enough content here to keep talking but I'm fascinated by the idea I get to sell this. We'll send you some copies to autograph. We can't wait to read it and listen to it since I have an hour's flight come home and an hour's drive and just thank you so much for the time and sharing your home with us to come out and have this chat. Well thanks for being with us. This has been too much fun. Yeah it's been great. It's really nice to see you after all these years. Yeah it's good to see again. It's good to see you Paul. You know that would be what 30 years? No 40 years. Well 30 years. Amazing. 30 years. You look great. Thanks. Thanks. So do you. Thank you. All right.